Flat rate was designed for new never driven vehicles?

[GON]

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.

 

[GW.]

I was a flat rate tech in the northeast. Something to also consider, warranty work pays less than book time. It’s a lose lose situation for everyone.

Flat rate was great when we still had 30k mile services and a 3/36 warranty. After that things really changed in the industry and IMO ruined the flat rate system.

 

[SC Maintenance]

There is a lot of things there to unpack.

On the flat rate - decades ago I worked at a GM dealer in a heavy rust area - and while much of what we brought in were reasonably new - we sometimes ended up working on stuff that wasn't. Typical process was to torch the offending parts off and replace everything - so in the end the quote / repair was more parts and hence more time. I wasn't the tech, but I did occasionally write or bill out the work orders - I did pretty everything there at one point. The owner trusted me for some reason.

Second - and has happened forever - stacking flat rate is common in the industry, or was. You end up gaining time there because there is duplication that you get paid for but only did once.

I can easily beat flat rate for plugs or a rad or a thermostat on my Nissans. There is no rust, but I also don't have a full shop nor do I do this for a living.

I think technicians leaving the industry have way more to do with poorly paying management / corporate shop owners / warranty work who charge an awful lot more than ever but simply don't want to share any with their staff. Its not just the car industry.

There is also a lot of people at retirement age and we never worked at adding staff through the years - so a lot of skilled labor is retiring at the same time.

 

[Mechanician]

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.
The manufacturer does still screw them with most diag. time though. - 1.5 x zero, is still zero.

 

[D60]

I realize this is idealistic, but maybe all techs need to go indy? Flat rate's a suggestion, not law. No different than getting multiple quotes from multiple contractors-- a guy can charge whatever to paint your front porch as long as all parties agree (contract law 101)

If enough techs rebel against flat rate -- assuming this is even the "right" move at all -- the system will change. Slowly -- not overnight

I'm not advocating for a side but rather saying it's still the free market and it'll work out one way or another. As they say, toolboxes have wheels for a reason.

edit: not saying every individual should open their own shop. Just go work for an indy where pay per job is negotiable and/or can be quoted before work begins. And no concerns of warranty work (except bad parts/comebacks)

 

[AutoMechanic]

I make more money being flat rate than I ever did being hourly but that’s because when your flat rate you get the bigger jobs and also a higher rate too. Some days you lose and some days you win. For example as a flat rate guy I don’t want to do a 5K or 10K service or whatever because they suck on pay same with other services too. Also warranty pay sucks too. Toyota will not pay a penny to a tech for warranty diagnosis. You could argue with them all day on it they won’t pay a penny for diagnosis. Never have gotten a straight answer from our rep as to why they won’t pay it. 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. Recalls can also suck too but there are some recalls and some services that pay well. I think the worst warranty job I’ve done is a Tacoma steering rack which pays warranty 3.5 hours but usually takes around 8 hours. Customer pay is 8.5 hours on one. The worst part was the rack they sent me ended up being bad too so had to do it all over again for another 3.5 hours. And spent 4 days total time invested in the labor because it was my first time doing one the first time.

Believe me my first few weeks flat rate I was a nervous wreck and was rushing jobs and doing crap quality work then I finally realized I didn’t have to and could slow down and stay calm. The worst part about it is when you put the nail in your own coffin and undersell a job because something goes wrong or you just didn’t know how long it would take. Or rust or something that will slow you down. It has pros and cons but overall I’ll take my 100+ hours turned check over a 50 hour hourly check any day.

 

[clinebarger]

Flat Rate was good to me for many years...The intensity it takes to make good money at it gets old!!

 

[SC Maintenance]

Toyota will not pay a penny to a tech for warranty diagnosis. You could argue with them all day on it they won’t pay a penny for diagnosis. Never have gotten a straight answer from our rep as to why they won’t pay it. 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.

No OEM wants to pay for warranty. By underpaying on warranty it disincentives the dealers to do warranty, and often the dealer will try to pawn it off on the customer as not being warranty - depends on the shop. It also means they pay less for warranty when they can't avoid it. The only reason for not paying is to save Toyota money. Full stop.

Toyota is right in that the dealer makes a lot of money from the privalege of being a franchisee. When they sell a hot car above MSRP - how much is your commission. .

Same as always - stick it to the lowest guy on the org chart.

I will say - you have clown ceo Farley out saying he can't fill a bunch of six figure mechanic jobs, and now someone pushing that the flat rate system that has worked for decades is the reason techs are leaving. It sure seems like a deflection - don't look at the man behind the curtain event.

 

[Trav]

I can tell you flat rate does not work very for the mechanic in the rust belt. In states where rust is not an issue I can see good money to be made.

 

[Dave Hess]

I make more money being flat rate than I ever did being hourly but that’s because when your flat rate you get the bigger jobs and also a higher rate too. Some days you lose and some days you win. For example as a flat rate guy I don’t want to do a 5K or 10K service or whatever because they suck on pay same with other services too. Also warranty pay sucks too. Toyota will not pay a penny to a tech for warranty diagnosis. You could argue with them all day on it they won’t pay a penny for diagnosis. Never have gotten a straight answer from our rep as to why they won’t pay it. 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. Recalls can also suck too but there are some recalls and some services that pay well. I think the worst warranty job I’ve done is a Tacoma steering rack which pays warranty 3.5 hours but usually takes around 8 hours. Customer pay is 8.5 hours on one. The worst part was the rack they sent me ended up being bad too so had to do it all over again for another 3.5 hours. And spent 4 days total time invested in the labor because it was my first time doing one the first time.

Believe me my first few weeks flat rate I was a nervous wreck and was rushing jobs and doing crap quality work then I finally realized I didn’t have to and could slow down and stay calm. The worst part about it is when you put the nail in your own coffin and undersell a job because something goes wrong or you just didn’t know how long it would take. Or rust or something that will slow you down. It has pros and cons but overall I’ll take my 100+ hours turned check over a 50 hour hourly check any day.

If you really hustle and service writer feeds you constant work you can make good $$$$.

 

[Nessism1]

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!"

 

[Mechanician]

Many dealers do very little customer pay hours, compared to warranty. Management makes money even when the tech doesn't beat the clock. They will take any warranty work they can get.

I've seen many jobs that started out as customer pay, turned into "Goodwill" because the customer wasn't going to buy the repair. Either the manager calls the rep, or they instruct the customer to call the manufacturer's Customer Service department.

That could ruin your day, when suddenly an old rust belt car is getting a repair at warranty time.

 

[Nessism1]

Many dealers do very little customer pay hours, compared to warranty. Management makes money even when the tech doesn't beat the clock. They will take any warranty work they can get.

I've seen many jobs that started out as customer pay, turned into "Goodwill" because the customer wasn't going to buy the repair. Either the manager calls the rep, or they instruct the customer to call the manufacturer's Customer Service department.

That could ruin your day, when suddenly an old rust belt car is getting a repair at warranty time.

When the AC crapped out in my 10th gen Civic, the dealer tried to milk me for a $2200 evaporator replacement job, even though there was no evidence of failure, and the compressor seal, which was under extended warranty, was clearly puking. Took the car to a second dealer, and they fixed the compressor, and replaced the condenser, also under extended warranty. My cost was zero. Said if the evaporator does turn out to be leaking, I'd have to pay for that at some point. So far, the system is fine.

Talking to the service writer, and he said that some dealers don't want to do the warranty work due to low pay. Or that the techs try to pad it with claims of out of warranty part failure, which adds more time to the job. I'm sure the truth is hidden in there somewhere.

 

[Mechanician]

Remember the Dealer makes zero money if a tech is sitting, not booking hours. The dealer still has all the expenses of the infrastructure, they have no incentive to send ANY work away.
The techs do have an incentive - but they have to convince someone that knows the business and wants the money, that something shouldn't be covered by warranty.

Originally Honda denied that the compressor seals were leaking. They would deny claims, and said it was misdiagnosed - even when photos were submitted to document it. Then after a long while they started to cover the repairs. Not sure what was going on in their system with the compressor vendor. The dealer and the tech were made to look the stooge.

 

[goofy]

I prefer hourly, but at a rate that undercuts flat. No rust here, so flat is good money and thus either too competitive or too high of "flow through" for my tastes. A low hourly rate allows me to work at my pace and be picky, I'd rather get paid than get stiffed.

 

[Chris142]

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.

 

[meep]

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.

Ouch.

 

[ElectroMechanoMan]

My son worked at a heavy truck shop and they paid an hourly wage, but at the end of the month, they got a bonus for how many jobs they either met or did better than book rate.

 

[CKN]

I make more money being flat rate than I ever did being hourly but that’s because when your flat rate you get the bigger jobs and also a higher rate too. Some days you lose and some days you win. For example as a flat rate guy I don’t want to do a 5K or 10K service or whatever because they suck on pay same with other services too. Also warranty pay sucks too. Toyota will not pay a penny to a tech for warranty diagnosis. You could argue with them all day on it they won’t pay a penny for diagnosis. Never have gotten a straight answer from our rep as to why they won’t pay it. 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. Recalls can also suck too but there are some recalls and some services that pay well. I think the worst warranty job I’ve done is a Tacoma steering rack which pays warranty 3.5 hours but usually takes around 8 hours. Customer pay is 8.5 hours on one. The worst part was the rack they sent me ended up being bad too so had to do it all over again for another 3.5 hours. And spent 4 days total time invested in the labor because it was my first time doing one the first time.

Believe me my first few weeks flat rate I was a nervous wreck and was rushing jobs and doing crap quality work then I finally realized I didn’t have to and could slow down and stay calm. The worst part about it is when you put the nail in your own coffin and undersell a job because something goes wrong or you just didn’t know how long it would take. Or rust or something that will slow you down. It has pros and cons but overall I’ll take my 100+ hours turned check over a 50 hour hourly check any day.

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

 

[PF52]

... they say that it’s a privilege for us to represent the brand so we should do it for free as a courtesy .

Wow! By that line of reasoning maybe you guys should be paying Toyota for the privilege to wear the Toyota badge on your uniform.