are dealership repairs more expensive

Are Dealership Repairs More Expensive

When it comes to getting your car serviced or repaired, one of the biggest questions car owners face is whether to take it to the dealership or an independent auto repair shop. Dealerships are seen as the “official” repair centers for specific car brands, but they also have a reputation

for charging more than independent shops. However, is this reputation deserved? In this article, we will explore whether dealership repairs truly are more expensive than alternative options and examine some of the key factors that determine repair costs.

Are Dealership Labor Rates Higher?

One of the main factors that can make dealership repairs appear more expensive is higher labor rates. Labor rates refer to the hourly fee charged by a shop for a technician’s time spent diagnosing issues and performing repairs.

Most independent auto shops have published labor rates between $80-120 per hour depending on location. However, dealerships typically charge labor rates upwards of $125 per hour or more.

For example, here are some common labor rate ranges at major dealerships around the country:

  • Toyota dealers: $125-150/hour
  • Honda dealers: $135-165/hour
  • Ford dealers: $130-160/hour
  • GM dealers (Chevy, Buick, GMC): $125-150/hour

So simply based on labor rates alone, a repair job done at a dealership could cost 20-30% more just for the technician’s time compared to an equivalently skilled independent shop. This higher hourly fee makes the total bill significantly pricier, especially for repairs that require many hours of labor.

Are Dealership Labor Rates Higher?
Are Dealership Labor Rates Higher?

few factors that could potentially offset this higher labor rate:

Dealership technicians may be better trained and able to complete repairs more quickly due to brand-specific expertise. This could balance out the higher labor cost.

  • Some dealers offer discounts on labor for customers who purchase service contracts or routinely service their vehicles there.
  • Independent shops may also charge higher rates in major metro areas where labor costs are higher overall.

So while dealership labor rates present a definite price disadvantage, the expertise and discounts could help level the playing field in some cases. It depends on the specific repair needed and market conditions.

Potentially Offset This Higher Labor Rate:
Potentially Offset This Higher Labor Rate:

Are Dealership Parts Marked Up?

Another factor contributing to the perception that dealership repairs are more pricey is parts pricing. Like labor rates, dealerships are often accused of applying larger markups to genuine brand-name replacement parts compared to aftermarket alternatives.

Most independent shops source parts from various aftermarket suppliers that offer competitive pricing. Dealerships, on the other hand, stock primarily original equipment manufacturer (OEM) parts directly from the automaker.

Dealers’ Varied Markups: Exploring the Truth

Generic “wear items” like brakes, filters, and batteries often have fairly low dealer markups of 10-30% over market cost. More complex components under warranty usually have the markup waived or reduced by the automaker.

Outside of the warranty period, higher-priced engine or transmission components may have 50-100% markups, which seem steep but provide a needed profit margin.

Independent shops also mark up the price of aftermarket parts, anywhere from 15-50%. The difference is usually greater brand recognition and manufacturer warranties with OEM parts.

So while dealership parts will rarely (if ever) be the most affordable option, the markups applied may not always be as exorbitantly higher as claimed, either. As with labor rates, certain brands also offer parts discounts under service agreements.

Dealers' Varied Markups: Exploring The Truth
Dealers’ Varied Markups: Exploring the Truth

Does Expertise Outweigh Cost Differences?

Dealership technicians receive extensive manufacturer-sponsored training specific to each brand, reducing the risk of misdiagnosis or unnecessary repairs. OEM parts come with a factory warranty, while aftermarket parts could void powertrain coverage.

Dealerships have direct access to the automaker’s computer systems and technical service bulletins, giving them institutional knowledge to solve complex diagnostic issues. Complex issues like transmission replacements are best handled by the factory-backed dealership for peace of mind.

New car buyers often use the dealer during the warranty period to take advantage of complementary maintenance. Using the dealer establishes a long-term relationship and may lead to better pricing over time on future repairs and service contracts.

For some owners, the dealership premium is worth it for greater reliability, expertise, warranty protection, and brand reassurance – especially when a single expensive repair outweighs independent shop savings.

Does Expertise Outweigh Cost Differences?
Does Expertise Outweigh Cost Differences?

Other Cost-Saving Options

Requesting a pre-repair estimate from multiple local shops, both independent and dealer, to compare specific job quotes. Asking an independent shop to use OEM parts for a repair still covered by powertrain warranty if the total job cost is lower out-of-pocket.

Using online resources to self-diagnose basic issues, then taking a diagnosed problem to independent technicians for affordable repair confirmation and labor. Asking family/friends for personal recommendations of an independent shop with strong brand-specific experience and credentials.

Negotiating dealership service pricing by building long-term loyalty through routine maintenance packages. Considering certified pre-owned (CPO) vehicles that extend some factory coverage/perks to independent shops for newer used cars.

Ultimately, car repair costs depend on numerous variables beyond just using a dealer versus independent shop. With estimates, research, and establishing long-term professional relationships, car owners have options to maximize value based on their unique priorities and budgets.

Other Cost-Saving Options
Other Cost-Saving Options

Warranty Repairs and Service Contracts

For issues covered under the new car warranty, taking it to the dealership is usually required to avoid voiding remaining powertrain or comprehensive coverage. Doing repairs elsewhere risks losing warranty protection.

Many drivers purchase extended service contracts from the dealership or third parties to cap repair costs beyond the basic manufacturer warranty expiration, usually 3-6 years of additional coverage.

These supplemental warranties have exclusions like tires, brakes, fluids. Only certain service facilities may be eligible for reimbursement, not any shop. Deductibles leave some repair costs uncovered. Transferability determines if the warranty value transfers to subsequent owners.

Extended warranties offer peace of mind budgeting for larger repair bills later on. Dealers make healthy profits selling them. While margins are higher, they serve a purpose for risk-averse drivers. Comparing options helps optimize value.

Warranty Repairs And Service Contracts
Warranty Repairs and Service Contracts

When Is a Dealership Repair Necessary?

While independent shops offer budget-friendlier options much of the time, the factory-trained expertise at dealerships becomes mission-critical for certain complex issues:

Diagnosing drivability problems that independent shops struggle to pin down. Computer issues especially require deep brand knowledge. Specialized repairs involving engine control modules, transmission control modules, or other proprietary electronic components.

Specific jobs that require factory computer reprogramming or vehicle immobilizer key registration. Warranty-required inspections following an accident repair or vehicle modification. Emissions certification for states requiring test drives on dynamometers dealers usually own.

When Is A Dealership Repair Necessary?
When Is a Dealership Repair Necessary?

The Importance of Research Before Auto Repairs

Ultimately, determining if car repairs at a franchise dealership will be more expensive requires looking at many details for each person’s unique situation, including their vehicle, finances, priorities, and local automotive businesses.

Broad generalizations should not be made without first exploring the options, pricing, qualifications, and repair services provided by both dealerships and independent mechanics in the area. Doing thorough research on the options available is important for making an informed

decision that fits an individual’s needs and budget. Jumping to conclusions without obtaining information risks overpaying or compromising quality of work. Taking time to investigate multiple local repair shops allows for comparing specifics that matter most in each scenario.

The Importance Of Research Before Auto Repairs
The Importance of Research Before Auto Repairs

Examples of extended service contract providers other than dealerships:

National auto warranty companies like Endurance, CARCHEX, Edelbrock, etc. These companies provide contracts that can be purchased after the factory warranty expires.

Independent auto repair shops. Many shops offer their own extended warranty plans to cover customers’ vehicles after repairs are performed.

Common exclusions in extended service contracts:

  • Normal wear and tear items like brake pads, wiper blades, filters, batteries, etc.
  • Cosmetic or convenience items like paint, dents, interior tears
  • Improper maintenance issues if service wasn’t performed as outlined
  • Damages from accidents, weather events, environment factors
  • Modified or lifted vehicles where modifications caused failures

Factors to consider when comparing extended warranty options:

  • Coverage terms – how many years/miles are covered
  • Deductible amounts for repairs
  • Types of components/systems covered
  • Transferability if you sell the vehicle
  • Provider reputation and customer service ratings
  • Total cost of the plan over the term
  • Any service limits per repair visit
  • Claims process and turnaround time for approvals

Being aware of exclusions, coverage details, reputation and price are keys to finding the best extended car warranty for your needs. Comparing multiple options helps make an informed decision.


Is it better to go to a local mechanic or dealership?

It depends on the type of repair needed. Local mechanics can be more affordable for regular maintenance and minor repairs. However, dealership mechanics have access to original manufacturers’ parts and computer systems to diagnose complex issues. Dealerships also provide car warranties, so they are a good option while a vehicle is still under warranty. Overall, local mechanics provide good value for simple jobs, while dealerships are best for warranty or complicated work.

What is the outlook for auto repair in 2023?

The outlook for auto repair in 2023 remains positive as vehicles continue to age. As cars get older and accumulate more miles, they need more repairs and maintenance to keep them running smoothly. Meanwhile, new technologies are making vehicles more complex, providing new opportunities for mechanics to specialize and develop expertise. The use of computer diagnostics and hybrid/electric vehicles will drive demand for continuing education and training. Barring an economic downturn, most auto repair shops expect steady business throughout 2023.

What is the largest automobile market in the world 2023?

It is projected that the largest automobile market in 2023 will remain China. China has led the world in vehicle sales for over a decade due to its massive population and growing middle class. According to industry estimates, around 25 million automobiles are expected to be sold in China next year. With over 350 million vehicles already on the roads, China’s auto market is over twice as large as the United States, which ranks second in global vehicle sales. Barring any unforeseen economic slowdowns, China will likely maintain its position as the world’s biggest new car market in 2023.

Is it true that getting car repairs at a dealership is a rip-off?

While dealership repairs can sometimes cost more than independent mechanics, it isn’t necessarily a “rip-off.” Dealerships typically charge higher labor rates since they employ factory-trained technicians that have access to diagnostic tools and databases provided by manufacturers. However, dealerships also use original parts under warranty work. The tradeoff is quality and convenience vs cost. As long as the dealership provides estimates upfront and does the job right, using a dealer is not intrinsically a bad financial decision, especially under a warranty. Comparing multiple quotes is best.


In conclusion, the evidence shows that dealership repairs do tend to be more expensive than independent auto repair shops. Dealerships typically charge higher labor rates since they employ certified mechanics and have higher overhead costs for their facilities.

However, dealerships also have the advantage of using original manufacturer parts, which independent shops may not always have access to. While independent shops can sometimes complete basic repairs and maintenance for lower costs,

dealerships may be a better option when it comes to more complex issues that require diagnosing problems with specific vehicle systems. Overall, car owners need to evaluate their individual repair needs and budget when deciding between a dealership or independent shop.

Getting multiple estimates can help determine the most cost-effective choice for the work that needs to be done. While dealerships are generally pricier, they do offer certain benefits like manufacturer warranties and expertise that may be worth paying more for in some repair situations.

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