$19.99 Oil Change, Really? – Grease Monkey and Honest Tom

ht auto sterlingRecently I was asked to speak in front of a group of local business people. I asked them what topic was most important to them, the overwhelming sentiment, how to not get ripped off. 

Most experts would speak to the virtues of finding a shop you can trust, doing research, online reviews, etc.

No one is addressing the real question. Why is automotive repair so expensive? There is a simple answer, the cost of a $20 oil change. I call it socialized oil changes.

I presented them with a simple choice. Which has better value a $39 oil change with a $5 off coupon or a $20 oil change coupon? Every one picked the $20 coupon and the more expensive one was a rip off.

Let’s look a little deeper into this and find out how wrong they are!

1. Oil & filters are not free to shops they cost money
2. Employees need to get paid.
3. Advertising is expensive.
4. Landlords/mortgages need to get paid

Let’s say the oil & filter only costs a shop $12. A $20.00 model leaves $8 profit. At a 1000 cars a month that would leave $8,000 to pay the last three items, it might cover one! $40 for an oil change would make $28,000 covering expenses. That’s $240,000 a year that needs to be made up.

The $20 model makes the consumer a sales lead which NEEDS to be converted into a bigger sale. Covering not only the initial loss and covering all the expenses of all the leads that did not convert to a bigger sale. A lead that can be analyzed charted and graphed, essentially a math problem. Eventually, based on certain parameters, adjusted for by elevating labor rates and parts profit. On the 1000 car a month model, a 20% across the board increase to cover the loss.

That’s right, that $20 you just saved, likely added 20% to your repair bill!

“But they give me a discount on the bigger work!”

Don’t worry that’s accounted for as well.

All vehicles will need to be maintained or repaired at some point.

When that happens every $20 loss comes crashing back on the consumer. The consumer now pays for every person that fixes their own car, never does maintenance, or has “a friend” fix their car! Socialized oil changes!

The $20 model is everywhere, there is no escaping it, and shops have adjusted how they do business to compensate. Asking for a $40 oil change at a place that does $20 oil changes won’t save you. It’s too late.

A shop with $35 oil changes may or may not be honest. But at least they are not overcoming such a huge statistical loss.

My advice, treat a $20.00 oil change like an adjustable rate mortgage, be prepared for a huge balloon payment!

BTW, I don’t do $20 oil changes.

By Matt O’Donnell, Co-owner of HT Auto Care in Sterling, VA

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