Is Dealership Service More Expensive

By ROYAL FURY

When it’s time for scheduled maintenance or repairs on your vehicle, you have choices of where to take it. The dealership service center is a convenient option, especially if the car is still under warranty. But is dealer service pricing more expensive compared to independent auto shops?

In many cases, yes – dealership service departments do charge higher labor rates and parts prices overall. However, the cost difference depends on the brand, location and specific service needed. With some smart shopping tactics, you can still get competitive pricing from dealer service centers.

In this comprehensive guide, we’ll compare dealership vs independent shop pricing so you can make the best choice for your next automotive service visit.

Key Factors That Impact Dealership Service Costs

Several variables play into whether the dealership will be significantly more expensive for repairs and maintenance:

Brand – Luxury car brands like BMW, Mercedes and Lexus typically have much higher service prices at their dealers compared to mainstream brands like Honda or Ford. The price gap narrows between luxury dealer service and independent shops.

  • Location – Dealers in urban areas with a higher cost of living tend to charge more for service compared to small town dealerships where rents and labor costs are lower.
  • Service type – Basic maintenance like oil changes, tire rotations or brake pads tend to have smaller price differences between dealers and independent shops. More complex jobs show wider gaps.
  • Technician expertise – Dealers invest heavily in model-specific training and expertise that independents may lack, especially for newer cars. This specialized skill costs more.
  • Warranty requirements – Service during the new car warranty period must be done at the dealer to keep coverage intact. This gives dealers pricing power.

Shop fees – Dealers tend to charge higher shop supplies and disposal fees versus independents. This is added revenue. Availability – Dealerships may offer greater convenience and flexibility in scheduling if you need immediate service. You pay a premium for this availability.

Key Factors That Impact Dealership Service Costs
Key Factors That Impact Dealership Service Costs

How Do Dealership Labor Rates and Parts Compare?

The two biggest factors that drive service pricing are:

Labor Rate – The hourly cost charged by technicians for working on the vehicle. This ranges from around $100-$150 per hour at dealerships compared to $70-$100 at independent shops. The rate varies by a shop’s operating expenses and regional labor costs.

Parts Prices – The amount charged for replacement parts installed on the vehicle. Dealerships typically use 100% genuine OEM parts that are more expensive, while independents use less costly aftermarket parts.

To demonstrate the impact on overall service bills, here’s an example:

At ABC Dealership, the labor rate is $125 per hour. A basic brake pad replacement takes 1.5 hours of shop time. OEM brake pads cost $180 from the dealer.

So the total dealer price would be:

Labor: 1.5 hours x $125 rate = $187.50
Parts: $180
Miscellaneous shop fees: $25
Total Bill: $392.50

Now let’s say XYZ Independent Shop charges $85 per hour and can get aftermarket brake pads for $110.

Their total price comes to:

Labor: 1.5 hours x $85 rate = $127.50
Parts: $110
Miscellaneous shop fees: $15
Total Bill: $252.50

That’s over $140 in savings going independent! While this is just one simplified example, it shows how dealer labor rates and OEM parts markups can quickly drive bills higher.

How Do Dealership Labor Rates And Parts Compare?
How Do Dealership Labor Rates and Parts Compare?

Specific Service Comparisons

Now let’s see some real examples of average costs for common services at dealerships vs. independent repair shops:

Oil Change

  • Dealership: $80
  • Independent Shop: $40

Nearly 50% savings going independent for basic oil changes. Many independents also use regular conventional oil, while dealers push higher-priced synthetics.

Brake Pads & Rotors

  • Dealership: $450
  • Independent Shop: $320

Aftermarket brake components are much cheaper than OEM parts from the dealer.

Timing Belt Replacement

  • Dealership $950
  • Independent Shop: $750

Bigger complex jobs show the dealer’s specialized expertise costs more.

Check Engine Diagnosis

  • Dealership: $150
  • Independent Shop: $90

Dealers typically charge an hour of labor or more for diagnostic scans. Independents plug in code readers for less.

Coolant Flush

  • Dealership: $180
  • Independent Shop: $140

Basic fluid services have lower price gaps, but independents still save money using cheaper supplies.

As you can see from these examples, independent shop prices are almost always lower, sometimes by hundreds of dollars. But for some scenarios like warranty work or complex computer diagnostics required on newer cars, the dealer may be worth the extra cost.

Specific Service Comparisons
Specific Service Comparisons

Ways to Get Savings on Dealership Service

Don’t assume you have to pay full price at the dealer service center. Here are tips to save:

  • Ask about current service coupons – Dealers often run promotions on oil changes, brake specials, free multi-point inspections and more.
  • Negotiate on labor rates – Politely ask if they offer any discount on hourly labor rates for multi-service jobs or repeat customers.
  • Provide your own parts – Supplying your own aftermarket parts can save on dealer markups. Make sure the warranty allows this.
  • Schedule on slower days – Bringing in your car on a Monday or Tuesday can lead to lower labor rates compared to busier days.
  • Inquire about remanufactured parts – Ask the service advisor if any remanufactured options are available as cheaper alternatives for components like alternators, starters or compressors.
  • Apply for dealership credit card – Many dealer credit cards offer 5% to 10% off service repairs when you charge it to the card.
  • Leverage coupons against other shops – Some dealers will match competitor coupons to win your business.
  • Discuss service package deals – Ask what seasonal service specials they offer, like AC recharges or brake inspections paired with an oil change.

Should You Choose the Dealer or Independent Shop?

With the potential for significant savings, independent shops are generally the better choice from a cost perspective for out-of-warranty vehicles. But for newer cars under the factory warranty or situations where dealer expertise is needed, paying their higher labor rates can make sense in some cases.

Here are some guidelines for when to choose an independent shop or stick with the dealer:

Independent Shop – Good option for:

  • Older out of warranty vehicles
  • Minor routine maintenance like oil, filters, belts, batteries
  • Worn brake pads, inexpensive exhaust work
  • Check engine light diagnoses using generic code scanner
  • Body repairs like dents, dings, windshield chips

Dealership – Better choice for:

  • New cars under factory warranty period
  • Anything related to advanced driver assistance systems
  • Complex computer diagnostics beyond basic OBDII codes
  • Hybrid/electric vehicles or other high-voltage systems
  • Software updates/reprogramming
  • Major engine/transmission repairs
  • Replacing advanced electronic components

key advantages of using independent auto repair shops

Here is a condensed summary highlighting the key advantages of using independent auto repair shops instead of dealerships:

  • Lower Prices – Independent shops have lower overhead costs, allowing them to offer cheaper hourly labor rates and parts pricing, saving you 10-30% on average.
  • Personalized Service – Smaller independent shops provide a more customized, attentive experience versus large dealerships where you’re just a number.
  • Flexibility – Independents may be more accommodating for scheduling appointments at your convenience including evenings/weekends.
  • All Makes & Models – An independent mechanic can service any vehicle make or model. Dealerships only work on their own brands.
  • Support Small Business – Using a local independent shop supports small business owners in your community.
  • Focused Expertise – Independent technicians specialize in repairs, while dealership techs are often pulled into other roles.
  • Transparent Pricing – Indie shops tend to provide upfront estimates while dealers may tack on hidden fees.
  • Quicker Turnaround – With fewer techs and bays, independents can sometimes complete work faster than crowded dealerships.

The combination of lower prices, flexibility, personalized service and transparent pricing make independent shops an appealing option for many drivers once their new car warranty expires.

The Bottom Line

When reviewing your dealership service estimates against quotes from independent shops, the devil is in the details. There are certainly scenarios where dealer expertise and specialized tools make paying their higher labor rates worthwhile to ensure quality repairs.

But for many routine services and minor repairs, you can often save 30% or more by using a trustworthy independent shop instead. Do your research to find well-reviewed mechanics with expertise servicing your make and model of vehicle. The cost savings over the lifetime of your car can really add up.

Here are some frequently asked questions and a conclusion to summarize the key points about whether dealership service is more expensive than independent shops:

FAQs

Q: Are oil changes more expensive at dealerships?

A: Yes, dealership oil changes typically cost $60-80, while independents range from $25-50 for conventional oil. Synthetic oils used by dealers cost more.

Q: Why are dealership labor rates higher?

A: Dealer rates of $100-$150/hour reflect higher overhead costs, specialized training, and advanced tools that independent shops don’t require. Independents have lower rates around $70-$100/hour.

Q: When does it make sense to still use the dealership?

A: For newer cars under warranty, anything related to safety systems, complex computer diagnostics, or major engine/transmission repairs where dealer expertise is beneficial.

Q: Does the dealership have to honor coupons from independent shops?

A: No, but some dealers will try to price match coupons if you ask to earn your business. It doesn’t hurt to ask!

Q: How much can you save at an independent shop?

A: For most routine maintenance and minor repairs, independents save you 10-30%. On major jobs, savings can exceed $200 or more over dealer pricing.

Conclusion

The bottom line is dealership service centers undoubtedly charge higher hourly labor rates and parts prices compared to independent repair shops. This pricing gap is driven by the dealer’s higher operating expenses, specialized factory training, premium genuine parts, and advanced tools and technology.

However, for vehicles still under warranty or needing complex diagnostics and programming, paying the dealer premium provides confidence that the work is done properly to factory specifications.

Once the warranty expires, taking your car to an independent shop can save you 10-30% or more on common repairs and maintenance, which adds up substantially over the lifetime of your vehicle’s service needs.

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