Why do Dealerships Charge More for Repairs?

If you have ever taken your car in for service at a dealership, you may have realized that the price tag on your maintenance or repair might have been a little higher than you expected. Maybe you were going crazy and didn’t really understand how much auto service costs. Perhaps you thought the dealership was insane and maybe ripping you off. In both cases, you were probably right. Why do dealerships charge more for repairs? There are many reasons they can be more expensive compared to a regular mechanic.

Today, we’re going to look at the factors that bump up your service price at these dealerships, and understand which ones are fair and which ones are not. At the end, you can choose if the benefits outweigh the costs.

The GOOD Reasons Dealerships Charge More for Repairs

The biggest factor of why dealerships charge more for their services is because of one thing; overhead cost. It’s not too difficult to understand. Compare the size and complexity of the dealership service center versus that of your local mechanic. Dealerships naturally have more expenses when it comes to maintaining and operating within their respective facilities. They generally have more tools and parts on hand as well, which means their cost of inventory takes an important role here too. Larger facilities also mean a large workforce, where there are a diverse pool of employees. They can range from administrators to mechanics themselves.

One large variable within this overhead cost and pertains to the workforce is the specialized and quality skillset of dealership mechanics. To illustrate this important cost, we’ll look at an example:

Let’s say you drive a Mercedes. A Mercedes dealership will employ Mercedes-trained technicians (the mechanics) who spend most of their work time specifically on Mercedes vehicles. Because of this, they are provided with Mercedes tools and resources for their automobiles alone (more overhead costs). These certified technicians also continuously receive training and information from Mercedes on how to maintain and repair all of their vehicles. This quality for maintaining good technicians comes at a price.

All these costs that dealerships charge more for are pretty fair. Chances are, you will be getting a quality, focused repair when going to a dealership. But don’t count them as saints of the auto repair world just yet…

The BAD Reasons Dealerships Charge More for Repairs

With a complex operations management system that incurs a lot of costs, dealerships have some “wiggle room” to conduct some unethical business decisions. While many of the costs you are charged for are honest and true, there are a few of them that are definitely not. Dealerships will sometimes (and often) include things that will pad the bill. When read on paper, they sound important and correct, but really aren’t.

The biggest example of how dealerships unfairly charge you more are through the “shop supplies” costs. One anonymous, former service manager referred to shop supplies as, “similar to being charged for the napkins and silverware at a restaurant”. These include trivial, small expenses for service centers like shop rags and steering fluid. These are simple expenses which end up being greatly exaggerated for consumers to pay. It happens often where someone gets charged $30 because the shop was forced to use 3 rags. With all that money, you can purchase ten times as many rags from a supplier.

Always question “shop supplies” when you see it come up on your statement. They can or cannot be fair expenses on your end. Chances are, they are not.

In Short… It’s Up to You

Now you should have a much better understanding of why dealerships charge more for repairs. Whether you prefer to settle for a focused experience that will probably be safe at a marginally higher price, is up to you. Usually, whatever car you are driving will determine the type of service you are looking for.

Do you drive a higher-end import, that might require trained-service and valuable parts specifically for your vehicle? Then maybe dealerships are the way to go. Do you have a car that is popular and driven by many people, relatively inexpensive, and manufactured locally or in a neighboring country? Then a regular mechanic should serve you just fine.

If you want to learn more about what to expect at the mechanic, check out our tips here for what you should be prepared for on your trip.

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