Flat rate was designed for new never driven vehicles?

[The Critic]

At the end of the day, flat rate can work well if your shop has a decent mix of warranty and customer pay work. You need a repeat customer base who is willing to buy a high percentage of the recommended maintenance and repair items. Certain brands and income brackets will greatly influence this.

Warranty work is not currently as bad as in the old days for many Techs.
Some states have mandated better flat rate pay for warranty work. Example; In Illinois the techs currently receive the specified repair times multiplied 1.5 for warranty, and recalls.

Except alldata and other labor guides have been dropping their customer pay labor times to be barely above warranty.

 

[Mechanician]

At the end of the day, flat rate can work well if your shop has a decent mix of warranty and customer pay work. You need a repeat customer base who is willing to buy a high percentage of the recommended maintenance and repair items. Certain brands and income brackets will greatly influence this.


Except alldata and other labor guides have been dropping their customer pay labor times to be barely above warranty.

Agreed - there are many different mixes of customer pay and warranty work.

Some dealers have decent reputations, and others have been so mismanaged for years, their reputation is terrible.
Also different brands have different customer loyalty.
The original Honda Passport had a much higher quality rating than the Isuzu Rodeo, even though they were the exact same vehicle.

All dealers are often thrown into the same hat, in most discussions here.

 

[Chris142]

Ouch.

Yep. The owner told us that if he's not getting paid why should we.

 

[BMWTurboDzl]

Just watched a video and the issue of flat rate came up.

The video implied flat rate is for new/ never driven vehicles, essentially for repairing a new vehicle that has a defect that is identified at a new car dealership, before the vehicle is delivered to a new car buyer.

The video further suggests that consumers and the tech both end up on the loser end of the flat rate equasion. I would go on to say flat rate can't work as a vehicle in the upper Midwest/ northeast can take considerably more time than doing the same work on the same vehicle in let's say the Southwest.

I suspect flat rate/ book hours are here to stay, but just another reason it is reported technicians are selecting to leave the auto repair industry for other fields.

Some automakers (i.e. Ford) add an adjustment for regions where the work can be impacted by corrosion. Consumers will always lose because they'll pay higher prices to cover the additional warranty expense.

 

[BMWTurboDzl]

Of course Toyota's assets were over 663 BILLION dollars the end of September 2025.
They could afford to pay for diagnostics......

Assets don't mean anything. They're up to their eyeballs in debt.

 

[Dave Hess]

I worked at an independent Goodyear tire store many years ago. They paid flat rate and always found a way to screw us.

One way was anything to do with tires was not paid. If a customer wanted 6 new on his dully pickup we did not get paid for that job.

Another was a free alignment if you bought 4 tires. We did not get paid for that either. Same with flat repairs.

Dang. I alway tip the tire tech cash, they do a great job and appreciate it.

 

[clinebarger]

Some here suggest the flat rate system has changed, but how? To my knowledge, it's the same as always. OEM's spec the hours as if the tech knows the job, so first few times, they overshoot the hours. A good tech will beat flat rate on many jobs, though. It's not easy work.

When I worked for an OEM, we had a repair shop at an assembly plant, and some of the techs were really quality workers. I asked one why they weren't at a dealership where they could make better money, and the tech said "no rust!"

A Mechanic used to be able to negotiate a percentage of the labor rate, We now have to negotiate a dollar amount.

A top tier tech could demand 50% 30 years ago....You'd be extremely lucky to get above $40 on a $250 an hour door rate right now.

 

[Skippy722]

One time he said it’s because they say that it’s a privilege for us to represent the brand so we should do it for free as a courtesy then other times he’s said well you earn the repair so they don’t need to pay you for finding what it is.

"I don't work for free."

 

[The Critic]

"I don't work for free."

Most people in a production role work for free until they make a sale that generates revenue for the organization - conceptually this is no different.

 

[Mechanician]

Most people in a production role work for free until they make a sale that generates revenue for the organization - conceptually this is no different.

Sitting in a chair and flipping cards at a waste can - waiting for the phone to ring, vs. physical labor with tools you paid for?
Not apples to apples for sure.

 

[Paco Pena]

Flat rate at a dealership is known as " flat rape" for a reason. Pay a tech an appropriate hourly rate and have an incentive plan that encourages productivity. Tool boxes have wheels for a reason. Techs leave when they cant make a decent living.

Paco

 

[The Critic]

Sitting in a chair and flipping cards at a waste can - waiting for the phone to ring, vs. physical labor with tools you paid for?
Not apples to apples for sure.

Output is output- whether it’s blue collar or white collar.

 

[Mechanician]

Output is output- whether it’s blue collar or white collar.

Traditionally blue collar workers are paid - regardless of company profit. That's the risk the business owner has taken on themselves.
Auto Repair is one of the rare exceptions, where a blue collar worker is paid for what he/she produces. When an auto repair is performed - the worker has produced something - even if it's just a diagnosis - he/she should be compensated for that production.

 

[Dave Hess]

I liked watching Flat Rate Master on YouTube when he was still working on cars.

 

[MrkofXcellence]

Some here suggest the flat rate system has changed, but how? To my knowledge, it's the same as always. OEM's spec the hours as if the tech knows the job, so first few times, they overshoot the hours. A good tech will beat flat rate on many jobs, though. It's not easy work.

When I worked for an OEM, we had a repair shop at an assembly plant, and some of the techs were really quality workers. I asked one why they weren't at a dealership where they could make better money, and the tech said "no rust!"

I always was amused when taking a tour of the GM Truck Flint, MI assembly plant that some of the vehicles were in an area for repair. I always hoped I’d never get one of those!

 

[MrkofXcellence]

I worked at an independent Goodyear tire store many years ago. They paid flat rate and always found a way to screw us.

One way was anything to do with tires was not paid. If a customer wanted 6 new on his dully pickup we did not get paid for that job.

Another was a free alignment if you bought 4 tires. We did not get paid for that either. Same with flat repairs.

So you were uncompensated for mounting and balancing tires? WTH?

 

[MrkofXcellence]

This generation of workers doesn’t tolerate the old school stuff. If Ford wants more techs in its dealers then they are going to have to supply tools, training, and a decent REGULAR wage. People can’t be having these seasonal waxing and waning of wages and having to sink a major investment from non-existent funds on tools. Its just facts.

 

[skyactiv]

I started out at a Honda dealer and progressed on to being a mechanic at UPS. I'm at $45.89 an hour and will be at $49.14 on 8/01/27.

 

[MrkofXcellence]

I started out at a Honda dealer and progressed on to being a mechanic at UPS. I'm at $45.89 an hour and will be at $49.14 on 8/01/27.

Are the UPS mechanics union? I believe the drivers are if I recall correctly. Good for you man. You have a comfortable spot to spend a career now.

 

[skyactiv]

Are the UPS mechanics union? I believe the drivers are if I recall correctly. Good for you man. You have a comfortable spot to spend a career now.

I'm a Teamster.