do car shops make buttloads of money?

[OBLAMA2009]

they charge a ton to fix cars and have no shortage of business, so i always thought they made loads of bux, but i noticed here recently a lot of car joints here in sf have closed their repair shops and replaced them with snack stores.

is there a cheaper, but reliable way to get your cars fixed, like hiring someone through craigs. how do you know if that person is qualified

 

[pandemonium]

Wait, there are a ton of shops that have closed and you're asking if they make a lot of money? One would think they closed because they weren't making good money and had to cut their losses.

In short, no, they don't make a lot of money. Reason is because they have to compete with dealerships, which generally have a trusted reputation against a singled out local shop.

If you want to fix your car on the cheap, do it yourself. The only expensive part is acquiring all of the necessary tools. Once you start doing it, you'll see how the tool collection can grow out of control. In the long run, it's cheaper and more reliable if you're at least willing to learn and admit when you're wrong. Dig the internet and research any issues. Being knowledgeable about your vehicle goes a very long way.

 

[Doppel]

SHUDDERS at the thought.

Would never hire somebody through craigslist. Do it yourself or bring to a shop. And agree with last no they don't make much money.

 

[Jimzz]

No the HONEST ones do not make "buttloads of money". Many times when I ran my shop I would do work and not charge or just charge a token rate.

That and many times the job took longer, parts were wrong/bad, etc... something that was not the customers fault so I had to eat that.

As far as craigslist its not much differant than the phonebook many times. You may get a great shop/person or a dud. I do a little side work now for extra money and have had to turn people away as word of mouth has given me many busy weekends. I have of course also had to fix other peoples work so it goes both ways.

 

[Zenmervolt]

Depends on the shop.

A good everyday shop will make a decent middle to upper middle class living but nothing huge. The overhead for a shop is huge and even with the high hourly rates they don't have much margin.

Really big, high-end specialty shops can make very good money, but there are not many shops like this and they tend to cater to racers and most people don't know about them.

ZV

 

[pauldun170]

I know quit a few folks who one their own shops.
Getting coprporate\business contracts makes a huge difference...
Every single one of them have two sets of books.
One for so they can plead poverty to the government.
Another with the actual $$$ amounts.

Always great stories hanging out with those guys.

 

[DaTT]

Depends on the shop.

A good everyday shop will make a decent middle to upper middle class living but nothing huge. The overhead for a shop is huge and even with the high hourly rates they don't have much margin.

Really big, high-end specialty shops can make very good money, but there are not many shops like this and they tend to cater to racers and most people don't know about them.

ZV

I now use a high end performance shop for all my difficult jobs. He's not cheap and fast, but the quality is there and I know he won't rip me off.

 

[mmntech]

Garages, no. Body shops? Hell yes.

 

[Wingznut]

I was an auto technician at a couple of independent shops, and then a couple of dealerships (before I found a much better way to make a living...) And no, they don't make a lot of money. As a matter of fact, each of the dealership owners told me that they would drop the entire service department in an instant, if that was an option with the manufacturer.

I know quit a few folks who one their own shops.
Getting coprporate\business contracts makes a huge difference...
Every single one of them have two sets of books.
One for so they can plead poverty to the government.
Another with the actual $$$ amounts.

Always great stories hanging out with those guys.

Yep, this is a common occurrence... One of the shops I worked at had a separate stack of blank invoices. One for the customers who pay with check/card, and another for those who paid with cash.
I didn't realize how dishonest they were, until one day when the manager and owner were hungover and didn't get to work on time. A lady came in to pick up her car, that I had personally worked on the day before. There were items on the invoice that I didn't do (and there's no way anyone else did.) That was my last week at that shop.

 

[mvbighead]

Garages, no. Body shops? Hell yes.

This. The body shop I visit has a very upscale look about it. They also have about 4 guys that just write up service tickets.

Long story short, if insurance is paying the bill, you can make a boat load. If a customer is paying the bill, you have no choice but to try to make your customer happy in terms of cost.

In the end, the car repair industry needs to find a way to get involved with insurance. That'd fatten their paychecks a great deal, I would be willing to bet.

 

[OBLAMA2009]

I was an auto technician at a couple of independent shops, and then a couple of dealerships (before I found a much better way to make a living...) And no, they don't make a lot of money. As a matter of fact, each of the dealership owners told me that they would drop the entire service department in an instant, if that was an option with the manufacturer.

Yep, this is a common occurrence... One of the shops I worked at had a separate stack of blank invoices. One for the customers who pay with check/card, and another for those who paid with cash.
I didn't realize how dishonest they were, until one day when the manager and owner were hungover and didn't get to work on time. A lady came in to pick up her car, that I had personally worked on the day before. There were items on the invoice that I didn't do (and there's no way anyone else did.) That was my last week at that shop.

so what were they doing. were they adding fake schitt to the invoices in order to charge the customer for stuff that hadnt been done

 

[Vdubchaos]

Dealer service departments do VERY well, some say dealer service = 60-70% of dealership revenue (that's right they make more money on service than on selling cars).

Regular shops, no. Very little money and bunch of miserable souls (not that dealership doesn't have that hehe)

 

[SparkyJJO]

This. The body shop I visit has a very upscale look about it. They also have about 4 guys that just write up service tickets.

Long story short, if insurance is paying the bill, you can make a boat load. If a customer is paying the bill, you have no choice but to try to make your customer happy in terms of cost.

In the end, the car repair industry needs to find a way to get involved with insurance. That'd fatten their paychecks a great deal, I would be willing to bet.

How about no.

First off I can't think of any sort of insurance that would want to pay for general repairs to a car. Where's the money in that for them? Besides, even if they did, do you really want your insurance rates to skyrocket?

 

[T2urtle]

just because you charge a lot doesn't exactly mean the SHOP is pocketing everything.

a labor rate of $100+ is nearly average now. So lets us $100 per hour as standard. $20-$45 goes to the tech ( pending his skill level and what not). Shop has rent, insurance, bills and shop tools (wear and tear on the tire machines, torch, brake clean, uniforms). Everything else is profit for the SHOP. On parts they normally mark up 25-100% so they get a little of that.

If they dont have a constant flow of customers they are dead. As stated above, they can make decent money but they are not banking.

 

[Black2na]

Garages, no. Body shops? Hell yes.

oh really.....then why don't we switch income and bills I bet you make more then I do. average profitable body shop will make 20-25% generally as industry standard. most smaller independents make more like 10-12% after the insurance company is done beating them up with there scam known as direct repair. I own my own small body shop I make an ok living nothing to write home about though.

 

[T2urtle]

^ yea seriously, the insurance repair quote i got from a "recommended body shop" their labor rate was like $34/hour or something insane. I guess they have to give a HUGE amount of volume to do that.

My friend who has a body shop, does pretty decent BUT he doesn't do insurance claims and has no idea how to play the back and fourth banter and photos of proof and such. But like Black2na says, its NOTHING to write home about. He makes solid money and has the freedom to do what he wants, thats all he cares about.

I asked him last time i was hit if he would take care of me and he gave me the finger, lol.

 

[Wingznut]

so what were they doing. were they adding fake schitt to the invoices in order to charge the customer for stuff that hadnt been done

Exactly. They sold the service to the lady, didn't tell me. So, since I didn't know about it (and obviously didn't do it), the shop didn't even have to pay my labor on it. Double win for them.

Well, fast forward a few years, and they are out of business. So, maybe not really a "win" for them at all.

 

[Wingznut]

Dealer service departments do VERY well, some say dealer service = 60-70% of dealership revenue (that's right they make more money on service than on selling cars).

Not a chance. The vast majority of work done at a dealership is warranty work, which brings in significantly less than customer pay work. On top of that, parts markup is minimal on warranty work.

 

[mmntech]

This. The body shop I visit has a very upscale look about it. They also have about 4 guys that just write up service tickets.

Long story short, if insurance is paying the bill, you can make a boat load. If a customer is paying the bill, you have no choice but to try to make your customer happy in terms of cost.

In the end, the car repair industry needs to find a way to get involved with insurance. That'd fatten their paychecks a great deal, I would be willing to bet.

Insurance was our bread and butter in the rental industry. I'd say it accounted for about 2/3 of our business.

One shop we used to deal with, family owned. Owner's son who worked there had a brand new Mustang GT (might have even been a Shelby IIRC). For his winter whip, he had a brand new Ford F-150. Wasn't the Raptor but it was a higher end model. Pimped out of course. All chrome, proper off road tires, the works. Young guy in his mid-20s.

Another guy had a huge collection of RC planes and trucks, which he had "just bought". Not the cheap stuff either.

 

[mvbighead]

How about no.

First off I can't think of any sort of insurance that would want to pay for general repairs to a car. Where's the money in that for them? Besides, even if they did, do you really want your insurance rates to skyrocket?

I'm not saying I want it. Quite the opposite actually.

I am simply saying that if they want to make money, they need it. Any time you involve insurance, quote shoot up because the customer isn't directly paying for the bill.

An oil change becomes a $100 job if you have insurance paying for it. IE - It is marked as $99, and insurance pays a fraction so it looks like you are getting a good benefit from insurance.

I dunno, but I have seldom seen a body shop struggling for cash unless they are not getting paid by insurance companies. Mechanics, on the other hand, generally have a relatively cheap work place. They don't usually have a guy dressed in a polo and khakis taking your order. And they usually are writing up tickets themselves.

There is something to be said about companies that get paid by insurance companies. Most of them are not hurting in the slightest.

 

[jlee]

I'm not saying I want it. Quite the opposite actually.

I am simply saying that if they want to make money, they need it. Any time you involve insurance, quote shoot up because the customer isn't directly paying for the bill.

An oil change becomes a $100 job if you have insurance paying for it. IE - It is marked as $99, and insurance pays a fraction so it looks like you are getting a good benefit from insurance.

I dunno, but I have seldom seen a body shop struggling for cash unless they are not getting paid by insurance companies. Mechanics, on the other hand, generally have a relatively cheap work place. They don't usually have a guy dressed in a polo and khakis taking your order. And they usually are writing up tickets themselves.

There is something to be said about companies that get paid by insurance companies. Most of them are not hurting in the slightest.

I had a windshield chip repaired - cash price $20, or billed to insurance (covered under AZ comprehensive coverage with no deductible). Insurance paid $60 or something. Crazy.

 

[Pacfanweb]

Not a chance. The vast majority of work done at a dealership is warranty work, which brings in significantly less than customer pay work. On top of that, parts markup is minimal on warranty work.

Going to have to disagree. I worked at the largest dealership in the Southeast, and the service department carries that place.

It's true that they make less on warranty work, but not that much. Most places around here, the warranty labor rate is 90 or more per hour. Techs are still paid considerably less than 30 per hour.

The place I worked turned out over 2000 hours of labor per week. I, by myself, wrote over 1 million in total sales, and that was back in 1998. And we had 8 more like me, plus the truck shop.
Figure back then the effective labor rate (warranty, customer pay, and maintenance, which is lower) was probably 70 bucks per hour, that's 140,000 in just labor dollars coming in, a WEEK. That's not counting the parts markups, (which are just stupidly high on customer pay) rental money made, (handled through service also) and bonuses and spiffs from Ford and BG, who provided our flushing chemicals.

You also have to remember that parts and service go hand-in-hand. Our parts department was (and still is) so big that they now have a separate building, damn near as big as the entire service/parts dept on the lot, as a parts warehouse.

The body shop is the one that most dealer owners would love to get rid of, and many in fact, have. That's where most of the complaints come from.

I suppose at some smaller dealerships, things could be different, but a well-run service department at a decent-sized dealer is definitely a money maker.

 

[leper84]

Mechanics, on the other hand, generally have a relatively cheap work place. They don't usually have a guy dressed in a polo and khakis taking your order. And they usually are writing up tickets themselves.

Cheap work place? Unless I'm taking that wrong- LOL. I spend 2x as much on tools as I do on food per month. Do you have any idea how much (real) tools cost?

 

[Pacfanweb]

Cheap work place? Unless I'm taking that wrong- LOL. I spend 2x as much on tools as I do on food per month. Do you have any idea how much (real) tools cost?

I know most mechanics pay way more for tools than they need to. The convenience of the Snap On, Mac, Cornwell, etc, tool trucks coming by every week comes at a high cost.

But you don't NEED the majority of that stuff. You WANT it.

No mechanic for sure needs the apartment-sized tool boxes that are becoming common, much less do they need to pay 15 grand or more for one.

As someone who's been in the car business all my life, I can appreciate what good tools, particularly hand tools like wrenches and screwdrivers can do to help make my job easier, but there are lots of tools that come off the truck that would be a much better value if purchased elsewhere.

 

[leper84]

I know most mechanics pay way more for tools than they need to. The convenience of the Snap On, Mac, Cornwell, etc, tool trucks coming by every week comes at a high cost.

But you don't NEED the majority of that stuff. You WANT it.

No mechanic for sure needs the apartment-sized tool boxes that are becoming common, much less do they need to pay 15 grand or more for one.

As someone who's been in the car business all my life, I can appreciate what good tools, particularly hand tools like wrenches and screwdrivers can do to help make my job easier, but there are lots of tools that come off the truck that would be a much better value if purchased elsewhere.

The high cost of Snap on, Mac and Matco (Cornwell I will admit is harbor freight on wheels) brings unparalleled quality. I NEED quality tools to help me make more money. I WANT to make more money. I WANT to accomplish more every second at work, for that goal I NEED better than Craftsman, Kobalt or Pittsburgh tools.

As far as boxes I'd say something like a Classic 78 is the bare minimum amount of space even a b-tech would need. Maybe working at a dealer is different but its rare for an independent or even chain store to have more shop tools than a genisys, tire crap, press and a strut machine. You have to buy a TON of crap to survive. If you don't have the right tool or aren't making an effort to get it, someone else does and they won't mind taking your spot in the shop.

I buy mostly Snap on, and some Mac because I'll never have to buy it again.