August 22, 2017

Survey shows difference between franchise and independent dealer labour rates

Survey shows difference between franchise and independent dealer labour rates

Garage labour rates average £67 an hour across the UK but regions vary widely

The average labour rate at UK garages, combining franchise dealers, independent garages and fast-fit outlets, is £67 an hour, according to an industry survey. But there are huge variations between regions and the type of garage used.

A nationwide survey of 6,000 garages across the UK found that, on average, Surrey was the most expensive place to have a car serviced, with an average hourly rate of just over £81. At the other end of the scale, Scottish county Selkirkshire had the cheapest average at £49.69.

The list of the top 10 most expensive regions of the UK was dominated by the south, with London at £77.42 the second-most expensive place for labour rates behind Surrey at £81.07 per hour.

Meanwhile, the list of the 10 cheapest regions featured mostly Scottish and Welsh counties, indicating a clear north/south divide. Selkirkshire (£49.69 per hour) Shetland (£53.25) and Inverness (£55.81) were the three cheapest areas.

Franchise versus independent

The study found that franchised workshops were generally more expensive than independents, with an average UK labour rate of £99 for a franchised outlet compared with an independent garage average of £56, a difference of over 40%.

The three most expensive areas, for both franchised and independent garages, were London, Surrey and Middlesex, but there was a considerable differential between the two types of outlets.

For example, the average hourly rate for a franchised outlet in London at £127.16 was almost twice that of an independent garage in the same area at £68.32.

In Surrey an average hourly rate in an independent garage was £69.02, compared to £121.34 for a franchised outlet while, in Middlesex, a franchised garage charged £126.88 an hour compared to £66.74 at an independent garage.

Independent labour rate average by area Franchised labour rate average by area
AreaAverage Labour Rate (Inc VAT)AreaAverage Labour Rate (Inc VAT)

Drivers don’t check rates

Despite the increasing cost of service, maintenance and repair work, the study also found that more than three quarters of drivers (77%) admit they have no idea how much they pay for an hour of labour.

More than three in five (62%) say they don’t shop around to get the best price before agreeing to work and nearly a third (31%) don’t even check the final bill before paying.

Female drivers were worse than men for not checking what labour rate they were paying, with more than four in five women admitting they don’t know the hourly cost at their regular garage.

Maintenance management

fleet maintenance

CLM provides maintenance management for many of its clients, either on a stand-alone basis or as part of a package of fleet management services.

Clients’ company car drivers are provided with access to a national network of preferred garage servicing outlets which combine franchised, non-franchised, and mobile repairer options.

CLM selects the outlets within its preferred network based on the quality of their service offering, their locality and their price competitiveness. However, this does not automatically mean that an independent outlet will always be the preferred choice.

Some of the more prestigious marques, such as BMW, will always be handled by franchised outlets, while all warranty repair work for all makes and models will be automatically carried out within the dealer network.

However, once vehicles are out of warranty, most of CLM’s clients opt to have their vehicles serviced and all repair work carried out at independent garages rather than within the franchise networks.

The reasons are not hard to find. Average labour rates at CLM’s independent garages are typically around £40 per hour, while those at franchise dealers are usually £75-£80, rising to £100 per hour for more prestigious makes.

Ancillary work is more expensive, too. Replacing new brakes at a mainstream volume manufacturer’s franchise dealer might cost £ 300, but the same job would be just £170 at an independent.

Pay-as -you-go (PAYG) versus scheduled maintenance

When it comes to vehicle maintenance, fleet operators generally have two options. They can follow the scheduled maintenance suggested by the leasing company that supplies the car, or they can opt to have maintenance on a PAYG basis where they only pay for maintenance when it is actually incurred.

Based on long experience, CLM is convinced that PAYG maintenance offers a number of benefits over scheduled maintenance provided by leasing companies, and has been able to generate average cost savings of £800 per vehicle on a client’s behalf.

Benefits of PAYG include cost savings, improved cash flow, more transparency and greater flexibility, and CLM proactively manages the client fleet to ensure that all vehicles fall within the maintenance budget, thereby ‘smoothing-out’ any spikes in maintenance spend.

Bookings for all service work is very straightforward and can be made online or through CLM’s call centre booking facility.

An in-house team of experienced fleet controllers ensures costs are pre-authorised in line with the work to be undertaken against agreed dealer labour and parts charges. And CLM manages all garage invoice administration, consolidating all validated costs, with full cost centre analysis.

At the same time, consumables such as tyres, batteries and exhausts are also supplied through a comprehensive network of national suppliers, and are subject to the same stringent event and cost control.

When it comes to customer service, clients’ drivers receive the exactly same benefits they would receive within a maintenance-inclusive offering, Including a collection and delivery service or courtesy car, and vehicle cleaning prior to return.

To discuss fleet maintenance services or any other aspect of your fleet management, please get in touch.