Flat rate pay is killing this trade, saw it firsthand last Friday

I was at a shop in Phoenix last week helping a buddy with his transmission. A kid rolls in with a 2012 Civic, needs a simple valve cover gasket. Nothing crazy. The shop owner told the kid it would be $500 flat rate or $350 if he waited 4 hours. The kid just walked out. I see this every day now. Shops are scaring off customers with flat rate prices that don't match the actual work time. Has anyone else seen a drop in walk-in customers since shops went heavy on flat rate?

2 comments

2 Comments

verar2121d ago

That flat rate model is a double-edged sword for sure. Shops push it to maximize profit on jobs that go faster than book time, but it backfires hard on simple stuff like that valve cover gasket. The customer sees a number that doesn't match the two hours of actual work, so they leave feeling ripped off. It builds bad trust right from the start, and that kid probably won't come back to any shop that uses flat rate again. They'd rather find a backyard mechanic who gives them a straight hourly deal.

the_lee21d ago

Three years ago @verar21 I watched my buddy Tommy pay $600 for a "4 hour" alternator swap on his Civic. The guy finished it in 90 minutes flat. Tommy was furious because he knew how fast it went and felt like he got scammed for the other 2.5 hours of book time. That kind of thing sticks with people way longer than any shop realizes. It's like the whole system is designed to make customers feel dumb for asking questions.