How Much Does A Mechanic Mark Up Parts?
Posted April 16, 2014 by Ken Kupchik
A sculpture made entirely of auto parts.
Mechanics make their money by charging for labor, as well as marking up the parts used to repair your car. This combination ensures that a shop is profitable and a mechanic can stay in business and pay his or her employees, rents, utilities, insurance, taxes, overhead and everything else involved in running a legitimate business. Some people are surprised when they learn that parts are more expensive when bought through a mechanic than when they buy them on their own, but this is a completely normal part of mechanics doing business and nothing unusual for the industry.
Here is the way it works: you bring your car to the mechanic for a diagnosis after you start having some sort of problems. The mechanic inspects your car and then determines what parts are needed in order to fix it. He then checks his inventory for said parts, and if they're not available, he will order them from a local parts distributor, or from the manufacturer if that is the only option or if you specify it. The arrangement between the parts distributor and the mechanic can vary, with different incentives available depending on how much business the shop does, what brands are available and other factors. But the customer never has to deal with the parts distributor directly.
The markup occurs when the mechanic charges you more for the parts than he paid to the distributor. Some mechanics may charge a higher markup for parts, with a lower labor rate, while some may charge a lower markup for parts, with higher labor rates, but nearly all mechanics will mark up parts to one degree or another. This markup will vary depending on the type of shop it is, and the job, but an average markup for parts by a mechanic is between 25% to 50%. This means that a part that a mechanic pays $100 for will cost you between $125 and $150 on your bill from the mechanic. Don't forget, this is in addition to the labor charges, which average between $85 to $110 an hour for independent repair shops and between $115 to $135 for dealerships.
Another commonly used mark-up system is on a scale, depending on how cheap or pricey the part is. A cheaper part will be marked up much more significantly than a more expensive part. For example, a $2 to $8 part will be marked up 100%, or will cost you, the consumer between $4 and $16 dollars. A $10 to $30 part will be marked up 50%, or cost you between $15 and $45 dollars. A $30 to a $300 part will get a 30% markup and a part over $300 will get a 10% markup, costing you $330 and so on.
It's important to remember that every shop will have their own system for marking up parts, and if the shop is reputable, the markup and labor rate will end up bringing the total price within an acceptable range for the work performed. Some people purchase their own parts and bring them to shops in order to save on the markup, and many shops will complete the work, but it's important to remember that the warranty for the parts will be void in these cases. There will also be mechanic shops that will not perform work if you are not purchasing the parts from them, and while that can be discouraging for a savvy customer, it's important to respect the shop's decision as for them, marking up their parts is an important source of revenue, without which the business will not function properly.