Skip to content
Ralph Nader > In the Public Interest > California Test Case May Have a Bearing on Charges for Auto Repair

Auto repair fraud, gouges or shoddiness are ei­ther number one or very near the top of most con­sumer complaint surveys in this country. Billions of dollars every year are fleeced from motorists, according to the Department of Transportation.

Now comes a lawsuit brought jointly by the San Francisco District Attorney and the Califor­nia Department of Consumer Affairs that might diminish a widespread business practice by auto dealers which these prosecutors believe is re­sponsible for huge overcharges. The practice in­volves using a “flat rate” manual, either issued by the auto manufacturers or independent companies, to determine the charge imposed on the customer.

Here is how the flat rate manual device works. Suppose you take your car to a dealer or garage for a major tune-up and carburetor overhaul. The manual describes this job for a particular model car as taking 5.1 hours of labor. As is most often the case, the mechanic does it in a shorter period of time but the consumer is charged 5.1 hours nevertheless.

San Francisco District Attorney Joseph Freitas, Jr., calls the flat rate system an “ingeni­ous device designed to extract more money from the unsuspecting car owner.” His Deputy, Ray Bonner, adds that “one of the touted justifica­tions for use of the flat rate manuals is that it permits an accurate estimate. And yet here we have a shop (the defendant in the case) that fails to give the customer the one benefit it says the flat rate manual can offer.”

ACCORDING TO FREITAS, mechanics can finish jobs quicker than the flat rate time on 75 per cent of all billings. The source for his state­ment was none other than a study by a subsidiary of the National Automobile Dealers Association.

Where mechanics take longer than the manual’s estimates, the customer is sometimes billed the full mechanic’s time.

The manual is not just an economic gyp as it is used in practice. It can contribute to shoddy work where mechanics are paid on the basis of the number of flat rate hours worked. For the me­chanic will have an incentive to take shortcuts or replace rather than repair parts in order to com­plete more jobs.

Throughout the country there is widespread use of the flat rate system by the auto repair industry. A 1972 study by the Wisconsin attorney general concluded that over a nine month period consumers were charged for 61,887 more hours than were worked. In San Francisco a working man or woman can be relieved of a lot of dollars from his weekly paycheck for these phantom hours. The dealer who was sued charges $37 an hour for repair work!

California auto dealers are girding for a stiff court fight. The rest of the country will be watching, but it would be helpful were similar legal ac­tions brought by the Federal Trade Commission, which has long condemned the practice, and other state and local consumer fraud offices. Why should California carry the nation’s burden when it is a nationwide problem?

SINCE FILING THE suit, the California offi­cials have received many letters from aggrieved motorists. One car owner was billed $130 in labor charges for less than one and a half hours of work. “Isn’t $100 an hour a bit exorbitant?” asked the owner.

Another customer wrote complaining that re­pairs on his car took less than 15 minutes, yet he was charged for a full hour.

While waiting for the courts to decide, there is one thing that motorists can do. Insist beforehand that the garage charge only for the number of hours worked and ask to see the flat rate manual to see if you are ahead.

The Northern California Motor Car Dealers As­sociation defends the flat rate system by assert­ing that it has been around a long time without having been subject to legal action by state or local enforcement officials. Well, times change as new public servants start serving the public for once.