A big expense the shade tree mechanic doesn't have is garage keepers liability insurance. This means that if he makes a mistake and you crash your vehicle, possibly even getting injured as a result you are on your own. Back in the 80's I had a motorcycle shop where I paid about $1,500/yr for the state required minimum coverage. I was just talking to a guy who is also running an independent motorcycle repair shop in my old building. He told me he pays more for his liability insurance each month than I used to pay in a year. The customer eventually must pay for this, along with hazardous waste disposal fees for things like battery, oil and tire disposal, even disposal of parts washer fluid - something that used to be nominal, but now costs a fortune. I used to pay my mechanics between 40-50% of the shop labor rate, depending on their skill level. Now a shop would go broke paying that high of a percentage, as his costs have risen disproportionately.
BTW, when I was just an independent repair shop, (early 80's) my shop rate was $24/hr. After I got my Japanese motorcycle franchise (I won't say which brand, but all were similar) I had to raise my labor rate to $30/hr as the warranty reimbursement rate was so low. For instance, if a warranty job took a skilled mechanic say 1 hour to complete (based on realistic Chilton flat rate repair manual times) you were lucky if the manufacturer reimbursed you for 45 minutes of the mechanics time (with little to no diagnostic time to identify the problem.) Plus it took you a month to get reimbursed, but you had to pay your mechanic at the end of the week, causing a cash flow issue. No one wanted to work on warranty repairs, cause the reimbursement rate was so low, so they would sometimes try to cut corners to get on to more profitable, customer paying jobs. They also made the shop buy lots of expensive special tools (many of which were available on the open market for much less) to make sure you could complete their warranty repairs and properly service their products. This shifts more of a burden on paying customers and explains why dealerships must charge more than an independent repair shop for the same work. Then there is the "normal" shop equipment that needs to be purchased, serviced and repaired, like: air compressor, lifts, boring bars, precision hones, valve seat cutters, hydraulic presses, bead blasters, parts washers, tire changers, computer diagnostic equipment, etc. these costs are also passed along to the customer as higher labor rates too.
Chip
Gotta keep 'em guessing.
