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Hourly rate Lexus

Posted by Derek Warwick on April 3, 2008, 7:20 pm
Derek Warwick

Hi all, Customer of mine today informed me he'd been to Lexus to get 3 keys cut and programmed in - total cost £350!!! including 1 hours labour at £120 plus vat!
I've got to start charging the right price for my labours!!
Regards,
Derek

Re: Hourly rate Lexus

Posted by Tom Williams on April 4, 2008, 8:46 pm, in reply to "Hourly rate Lexus"
Tom Williams

Hi,

Many companies charge what they can get these days, rather than actually making a fair profit. You may well be charging the correct rate to stay in business in the long term. The Lexus dealer principal is almost certainly not. Like much in the modern world, the Lexus dealership (or it's parent company) doesn't expect to be around forever. They are making what they can while the going is good, then move on to the next project.

TW

Re: Hourly rate Lexus

Posted by Colin Hedger on April 4, 2008, 9:44 pm, in reply to "Hourly rate Lexus"
Colin Hedger

That's nothing Derek,my local VW (yes VW) garage 6 months ago were £125 per hour plus vat!
Could be more now!
Colin.

Re: Hourly rate Lexus

Posted by martin young on April 5, 2008, 7:42 am, in reply to "Re: Hourly rate Lexus"
Martin Young

at the other end of the scale our local fiat dealership charges £40 an hour
martin

Re: Hourly rate Lexus

Posted by paul whatmough on April 6, 2008, 4:13 pm, in reply to "Re: Hourly rate Lexus"

I disagree!! Its not the dealers charging to much. Its the independents who don't charge enough. The rates most independents charge (myself included) are to low. If you compare us to the other trades, builders, plumbers, we are under valued and underpaid. The future of car repair will depend on us all being more business like and charging higher rates. These rates needs to be less than the dealer, but a lot more than we currently charge..
Paul...

Re: Hourly rate Lexus

Posted by John Gallagher on April 6, 2008, 6:17 pm, in reply to "Re: Hourly rate Lexus"
John Gallagher

Here, here!
I couldn't agree more, I think we do under value our service, the trick is getting the customer to agree though

Re: Hourly rate Lexus

Posted by Derek Warwick on April 7, 2008, 7:36 am, in reply to "Re: Hourly rate Lexus"
Derek Warwick

Hi all,
Well, this customer of mine with the Lexus, when he told me how much it had cost him to get the keys done, I jokingly said I'd have to put my charges up, to which he replied " Well, you won't get any work then!"
I disagree, if Lexus and other makers are charging this sort of hourly rate, I think there's scope for quite a big increase and I look forward to a lot more work in the future!
Derek

Re: Hourly rate Lexus

Posted by Clive Atthowe on April 7, 2008, 7:59 am, in reply to "Re: Hourly rate Lexus"

I think it is easy to under value the service that most garages \ specialist provide considering the amount of investment in tooling , diagnostics , information and training that is required there doesn't seem to be many industries that have this on going commitment yet their charges are often far greater than the garage trade. Personally i carry out dealer labour rate surveys each year locally and average out the labour rate i try and charge 70% of this as my rate seems to work for my business and is a good marketing tool if customers say that you are expensive.

Re: Hourly rate Lexus

Posted by John Kennard on April 7, 2008, 10:03 am, in reply to "Re: Hourly rate Lexus"
John Kennard

The next most important thing to making a living for one's self is re-investment in your business. For without that you will stagnate & die and not afford money for new equipment & training, the Motor trade is one of the fastest moving trades in the technology stakes and requires a lot of investment.

I can understand the dealer rates because the manufacturers require now days million pound showrooms & workshops before training & equipment. I understand our local BMW dealership pays BMW training costs up to £5000.00 for a weeks training of one technician including wages & accommodation. Most of their trainees are required to sign a contract before any training starts.

However an awful lot of dealerships 1 million on premises is for prestige sake & creating the mystery that surrounds new technology, helping to justify their excessive labour rates. However we as independents must also make ourselves presentable as well as competent as we will be left behind as Freds in Sheds and not be able to charge a fair rate for our services.

I feel that when we look at dealership prices averaging around the £100.00 mark half that still allows independents to make a fair profit & investment in training & equipment. As for making ourselves presentable just keep your premises clean & tidy looking organized and most sensible people realize they are not being ripped off for expensive cappuccino bars on the premises and are getting a fair deal.
John Kennard.

Re: Hourly rate Lexus

Posted by Tom Williams on April 7, 2008, 12:27 pm, in reply to "Re: Hourly rate Lexus"
Tom Williams

Hi,

The problem with comparing ourselves to plumbers and builders is that, to be honest, there is an oversupply of garages and a chronic shortage of skilled workers in the construction industry.
It's difficult to get a decent plumber,electrician or builder in the South East, most need several weeks notice for even the smallest job. Contrast thet with getting your car MOT'd and serviced. There are so many car repairers in this area they are falling over themselves to see who can offer the cheapest MOT test and service. "You need your new clutch today sir, yes no problem". "Mot test special offer this week, it's half-price with a service"

Until there is a major reduction in the number of garages, we will never be able to command a sensible income. Our industry is just too competitive.

TW

Re: Hourly rate Lexus

Posted by paul whatmough on April 7, 2008, 6:45 pm, in reply to "Re: Hourly rate Lexus"
Paul Whatmough

Tom, yes it is competitive, but there is still margin for higher rates. Also hold on to your seat because garages are starting to disappear. Many are struggling to keep up with the technology and pulling out or losing custom. The skills shortage is also just around the corner. The tutor at my sons college says enrollment is down for car repair with less young people willing to put in the effort. When they leave school with no qualifications the careers people direct them toward car repair as an easy option.
My son was one of only a few who had actually passed is exams at school to take on the three year NVQ. All the others in is group split their college time between car repair and key skills i.e. Maths and English. This doesn't make great techs for the future. Understanding the electronic theory will be a prerequisite in the future of car repair...
Paul..

Re: Hourly rate Lexus

Posted by Phil Dunmore on April 7, 2008, 10:11 pm, in reply to "Re: Hourly rate Lexus"
Philip Dunmore

The "easy to fix" cars are also disappearing fast. The garages that can only fix these vehicles will run out of work and die. I know garage owners whose plan is MOT testing only, someone still has to fix them.

Re: Hourly rate Lexus

Posted by Colin Bunn on May 17, 2008, 6:17 pm, in reply to "Re: Hourly rate Lexus"

A marketing chappie came into our garage and said that by selling your services cheaply you were telling customers that you dont value your services highly.Lots of garages are struggling to keep up with the technology changes and just arent servicing cars correctly,if you cant code read memories at a service then you could argue that the service isnt being carried out correctly at all.If you have to borrow to buy new equipment then it is a reduction in labour rates and profits which cant be right.We charge £45 plus vat but its got to go up again very soon!!Good customers wont desert you for a fiver as they know that you have to make investments in new technology and training etc to survive.A lot of customers use independents for a more personal service and not just to save money.

Colin

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