How to Price Garage Work: Labour Times, Parts and Diagnostics

Garage pricing looks simple: parts plus labour. In practice most small workshops lose money in three places: labour charged by guesswork instead of time, parts passed through with nothing added for the work of getting them, and diagnosis given away free. Fix those three and the same jobs start paying properly.

Charge labour from real times

Customers accept a labour charge they can follow. Quote and invoice labour as hours at your hourly rate, and base the hours on how long the job really takes. Many garages use published repair times as a starting point and adjust for the car in front of them: an older vehicle with corroded fixings can take far longer than the book says. If a job is likely to overrun, say so on the quote instead of absorbing the extra time.

Know what your hourly rate has to cover

Your rate pays for more than your time under the car. Add up a year of rent, ramps and equipment, diagnostic software subscriptions, insurance, training, waste disposal and your own wage, then divide by the hours you can actually sell. Collecting parts, answering the phone and talking to customers all take time nobody pays for directly, so the sellable figure is lower than your opening hours. Set the rate from that sum, then sanity-check it against local garages.

Put a margin on parts

Every part has costs on top of its trade price: the call to the factor, the wait or the drive to collect it, the wrong part that has to go back, warranty claims when one fails, and stock sitting on the shelf. A margin on parts covers that work. Show parts as their own lines with the price you charge, and say whether they are genuine, OE-equivalent or budget, since customers comparing quotes will ask.

Do not give diagnosis away

Finding the fault is often the hardest part of the job, and it needs expensive equipment and experience. Charge a fixed diagnostic fee, state it before you start, and decide whether it comes off the repair if the customer goes ahead. Writing it on the quote or estimate stops the conversation at the counter about why there is a charge when "you only plugged it in".

Quote, estimate, then authorise

Use a fixed quote for routine work you can price with confidence, such as services, brakes and clutches, and an estimate for faults you cannot see yet. Either way, agree how extra work will be authorised. A line saying nothing extra is done without the customer's agreement, followed by a phone call when something turns up, prevents nearly all disputes over the final bill. Note the time they agreed on the job card and on the invoice.

Write the advisories down

When you notice something you were not asked to fix, such as tyres near the limit or a weeping shock absorber, put it on the invoice as an advisory. It protects you if the part fails, and it is often the start of the customer's next booking.

Garage pricing FAQs

Should a garage mark up parts?

Most do. The markup covers the time spent sourcing and collecting parts, returns and wrong parts, warranty handling and the money tied up in stock. How much is your decision; the mistake is passing parts through at cost and absorbing those costs yourself.

Should I charge for diagnosis if the customer goes elsewhere?

Yes. Diagnosis is skilled work with expensive equipment. Many garages charge a fixed diagnostic fee and take it off the repair if the customer goes ahead, which keeps the work with you without giving the time away.

How do I set my hourly labour rate?

Work out what the business costs to run for a year, including rent, equipment, insurance, software subscriptions and your own wage, then divide by the hours you can realistically sell, not the hours you are open. Compare the result with local garages, but do not simply copy them: their costs are not yours.

Templates: mechanic quote, mechanic invoice, body shop quote, car valeting quote. More on pricing in general: how to price a job.