Posted door rates provide a usual, customary, and reasonable range of fees for services and supplies in a given geographical area.
Why is it important that all shops have a posted door rate? Fair compensation starts with industry posting and charging customary and reasonable rates. Posted rates do the following:
- Help consumers understand the cost of repairs.
- Aid consumer perception of industry by providing clarity around fair value for services.
- Help both the industry and its partners understand the current fair market price for services.
- Provide a mechanism to post new service offerings such as ADAS calibration and EV servicing.
The ARA thought it would be helpful to gather the following information to assist members with gaining a better understanding of the industry’s competitive landscape.
In a recent industry survey only 51% (collision) and 31% (glass) of respondents stated that they post a door rate, 16% (collision) and 39% (glass) do not have a posted rate, and 32% just use the ICBC rate.
Running an auto repair/glass shop today is a costly undertaking. In addition to the cost of obtaining and maintaining a building/facility, the high-tech diagnostic tools, equipment, and training needed to service modern vehicles require a significant investment.
Steps toward making a change:
- You have to believe that the industry can overcome the rate challenge. Vehicle repair requires significant investment. Do not shy away from asking for what you need.
- Make pricing transparent—show your posted rate for all categories of work. It’s part of establishing fair market value. The customer is the vehicle owner.
- Customer pay is the best way to measure market price. There is no reason to accept below-market rates or pay someone else’s contracted rate.
- Make the rate visible to everyone, and write an estimate at that rate and enforce it.
Survey Results—Responses from the industry yielded the following results:
- Collision, Paint & Glass Rate [20.4% – $82.68 (ICBC rate) / 33% – $97.89, high $125/hr.]
- Repair Material [28% – $6.53 (ICBC rate) / 36% – $7.82, high $20/hr.]
- Paint Material [24% – $50.81 (ICBC rate) / 34% – $57.79, high $95/hr.]
- Frame [24% – $94.50 (ICBC rate) / 29% – $116.19, high $130.79/hr.]
- Mechanical [19% – $106.31 (ICBC rate) / 29% – $130.79, high $150.00/hr.]
*88% (collision) and 77% (glass) businesses reported they charge these rates where no agreement is in place.
How to establish your door rate:
(Wage + benefits) / 40% (fully loaded labour) = rate required to achieve 60% profit/labour hr