Using Flat Rate Estimates After Auto Service Operations Training
August 29, 2017
Students taking service operations specialist training develop a range of skills, from management and customer relations, to estimating and data analysis. One of the roles that service operation professionals can perform after graduation is that of an auto service advisor, who is responsible for guiding customers through the repair process by suggesting what repairs are needed and preparing quotes.
If you’re interested in becoming an auto service advisor or operations specialist, knowing about the different types of estimates and quotes is an important part of the job.
Read on for a quick introduction to flat rate estimates.
The Difference Between Quoting Flat Rates and Straight Time
In an auto shop, there are generally two ways to quote prices for repairs: flat rate and straight time. Which one is quoted usually depends on the type of repair being performed. Straight time is based on the actual amount of time a repair took and is calculated by multiplying the shop’s hourly rate by the amount of hours spent on the task, plus parts and any other expenses like recycle fees that are passed onto the customer.
Flat rate, on the other hand, is calculated by multiplying the shop’s hourly rate by the book time for a certain repair. Book time is a predetermined amount of time a repair should take on a certain car. Thus, no matter how long it takes to complete the repair, the customer is quoted the flat rate.
When to Use Flat Rates in Auto Service Operations
As professionals with auto service operations training know, there are certain instances when flat rates are appropriate to use. In general, flat rates should only be used for simple routine maintenance, as it’s fairly well-known how long these repairs typically take. Flat rate repairs could include oil changes, tire rotations, or installing new brakes. For more complicated repairs that will need diagnostic work, using a straight time quote is better, since it’s nearly impossible to predict exactly how much time will be needed to diagnose and perform the repair properly.
What’s Included in a Flat Rate Price You Quote to a Customer
While it may seem confusing at first to charge a flat rate if the repair took shorter than expected, it’s important to consider everything that’s included when you quote a flat rate. Your prices don’t only cover the mechanic or technicians’ labour; they also include the many overhead expenses of running a shop. Any price you quote a customer goes towards covering the building lease, insurance, supplies, electricity, and even employee benefits.
Explaining Flat Rate Estimates to Customers After Auto Service Operations Training
It’s not uncommon for customers to be confused about flat rate quotes, and to be a bit upset if their repair took a shorter amount of time than what was quoted on their invoice. It’s easy to understand why customers may feel this way if they don’t know why the flat rate quote system is used. After automotive service operations courses, you can help ease a customer’s worries by explaining it to them in a way they understand.
First, explain to the customer that for standard repairs, you charge a flat rate cost and that it’s better to look at it as a full price- like the same way you would for a haircut- rather than to break it down by labour hours. The labour hours simply provide a means of calculating a final cost. Second, kindly explain how if the customer’s repair is finished quickly, it’s because they had a skilled and experienced technician working on their car, which they should feel confident in. And finally, you could point out that the flat rate system can benefit a customer if the time it actually took the repair is more than the time they were billed for, which is bound to happen at some point during one of their routine maintenance appointments.
Did you know our automobile repairing services programs prepare students to succeed in a number of interesting automotive careers?
Contact Automotive Training Centres to learn more!
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