The Mechanic Is Not Ripping You Off By Charging A Markup On Parts

Illustration for article titled The Mechanic Is Not Ripping You Off By Charging A Markup On Parts

Mechanics charge you more for parts than what you can buy those parts for online. People ask me about it from time to time. Is this a ripoff? No, it’s not.

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This question usually pops up in my line of work when someone goes over a work order with a fine-toothed comb and then “checks” the prices they were charged for parts against prices on the internet. $249 for an alternator? You can buy one on Amazon for $86!

A markup on retail items—car parts or otherwise—is part of any business. And comparing Amazon prices to anything retail is misleading. My latest book (sorry not sorry for the plug) has a cover price of $39.95 but Amazon is giving them away for only $30.53.

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Why is this? Among other things, Amazon does not run a local retail location with a person standing at a counter who can answer your questions.

But the parts question has a few more components. The part you get on Amazon might not be the same quality or have the same warranty as one from the local shop. The cheaper alternator cited above from Amazon comes with a one year warranty. The Ford Motorcraft alternator comes with a two year warranty.

And let’s face it: If you want that cheapo price on that car part, you have to buy it and install it yourself. While you might be fine with that, most people aren’t (hence the number of times I get asked this question.) When you pay the expert to install the part in your car, part of what you are compensating them for is what they bring to the transaction. The ease of installation (it doesn’t require you to get your hands dirty!) and the expertise. Most people would rather have the part installed by an expert who has done the installation many times before than try and do it themselves in their driveway.

And that installation quite likely comes with a warranty. The alternator dies the next day? Take it back to the shop if they installed it. You installed it? Pop the hood and start troubleshooting, Chief. Is the part defective or did you install it wrong?

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I posted a question and asked guys in the industry to write and give me the lowdown on markups at dealerships and shops. Parts markups can vary from shop to shop and from dealer to dealer. Generally though, there are industry standards. What you are buying is the expertise of the shop and helping them keep the lights on and the doors open.

Would there be a markup that was too high? Of course: If they charged you $2490 for the $249 alternator, that would be a price “grossly in excess of the value of the goods.” In Michigan, and many other states, that would make it wrong. But notice the phrase “grossly in excess . . .” Simply charging you retail for a part that you can buy for close to wholesale isn’t going to break the law.

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So, before you freak out when you see the price difference between the shop price and Amazon, remember that the comparison is not fair. Mechanics have to feed their kids too. And if you want the cheap price, you’re going to be doing the work yourself.

Photo credit Shutterstock

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Steve Lehto has been practicing law for 24 years, almost exclusively in consumer protection and Michigan lemon law. He wrote The Lemon Law Bible and Chrysler’s Turbine Car: The Rise and Fall of Detroit’s Coolest Creation.

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DISCUSSION

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David Ruddock

I mean, I get the point here, but who takes their car to an indie that doesn’t allow you to supply your own parts? Is this particularly common these days? Genuine question, I don’t know.

For something involving a lot of tiny little extra PNs or that is difficult to source, sure, I was happy to let the shop I went to source it. And their price was never, ever list - it was always substantially less. It may not have been as cheap as online, but it also got there the same or next day. Which is absolutely a value-add.

If your car is towed or otherwise stranded at said shop, sure, you should expect to pay the shop’s prices for parts. If you get a diagnosis and a quote for parts, I have never seen anything morally or ethically dubious about buying your own parts online and coming back with them and paying for labor to have them installed.

I can understand a shop not wanting to use customer parts for someone they don’t have an existing relationship with, but to me, that was half the point of using the same shop for all service on my last vehicle. Why on earth would I have paid anywhere near Mercedes’ list price for for a radiator when I can get a basically as good Behr for about a third as much? I get some customers will bring in cheapo Chinese crap and expect it to install and last like OEM, but those are the customers you probably want to send down the road to the competition anyway.