Automotive Service Departments consider repeat repairs or comebacks as a part of doing business.  However, many times they are not able to actually see how this is affecting their bottom line.  If the service center is profitable, then they are not realizing the thousands, or tens of thousands of dollars being lost every year!

This form is designed to assist an automotive repair center to get an idea of how much money is being lost yearly to repeat repairs or comebacks.  This is not designed to establish why the service department is having repeat repair problems.

I have included examples to assist in how to organize your numbers. Note that this only looks at the employee labor in dealing with a repeat repair and does not include any parts that may need to be added to the mix.

Employee Costs Per Repeat Repair

Figure these numbers once as an average and apply to each repeat repair situation. Not all service departments will have all of the employees base your numbers on your staffing.

Employee	Time Spend on RR	Hourly Wages	Total Cost
Service Advisor
Cashier
Dispatcher
Shop Forman
Service Manger
Parts Person
Warranty Adm
Total Cost	N/A	N/A

Example, your shop may not use all of these employees:

Employee	Time Spend on RR	Hourly Wages	Cost
Service Advisor	20 min	$15	$5
Cashier	5 min	$7	$.80
Dispatcher	5 min	$15	$1.25
Shop Forman	20 min	$20	$6.50
Service Manger	10 min	$25	$4
Parts Person	10 min	$8	$1.25
Warranty Adm	10 min	$10	$1.60
Total Cost	N/A	N/A	$20.40

Weekly Employee Costs

# of Repeat Repairs	Cost per Repeat Repair	Total Cost

Example using 10 repeat repairs per week:

# of Repeat Repairs	Cost per Repeat Repair	Total Cost
10	$20.40	$204.00

Weekly Lost Labor Hours and Costs

# of Labor Hours for Repeat Repairs for Week	Labor Rate, use average if warranty and customer pay labor rates are different	Total

Example: If Average Labor Hours to do a Repeat Repair is 1.5.

# of Labor Hours for Repeat Repairs for Week	Labor Rate/hr, use average if warranty and customer pay labor rates are different	Total
15	$75.00	$1,125.00

Lost Weekly Labor Rate Income from Repeat Repairs

# of Labor Income Hours Lost to Repeat Repairs for Week, number is same as Weekly Labor Rate Costs for Repeat Repairs	Labor Rate/hr, use average if warranty and customer pay labor rates are different	Total

Example:

# of Labor Income Hours Lost to Repeat Repairs for Week, number is same as Weekly Labor Rate Costs for Repeat Repairs	Labor Rate/hr, use average if warranty and customer pay labor rates are different	Total
15	$75	$1,125.00

Note, these numbers will always match the numbers from the chart - Weekly Labor Rate Costs of Repeat Repairs.

Weekly Customer Compensation Costs for Inconvenience
These would include rental cars, free services, discounts on service, etc.

# of Repeat Repairs	Average spent per incident on Customer Compensation	Total

Example: If Average Labor Hours to do a Repeat Repair is 1.5.

# of Repeat Repairs	Average spent per incident on Customer Compensationt	Total
10	$35.00	$350.00

Total Weekly Cost of Repeat Repairs

Item	Totals
Employee Costs	$
Weekly Labor Rate Costs	$
Weekly Lost Income Costs	$
Special Customer Compensation Costs for week - rental cars, special free services	$
Total Cost per Week for Repeat Repairs

Example:

Item	Totals
Employee Costs	$204.00
Weekly Labor Rate Costs	$1,125.00
Weekly Lost Income Costs	$1,125.00
Special Customer Compensation Costs for week - rental cars, special free services	$350.00
Total Cost per Week for Repeat Repairs	$2,804.00

Yearly Cost of Repeat Repairs

Weeks Open a Year	Weekly Costs	Total
52	$2804.00	$145,808

Unfortunately this does not include the policiy dollars spent to save customers with various services, rent cars and the like. Nor can this formula include the hidden lost income from unsatisfied customers never returning and the people the customer tells about repeat repair that will never come to the service department or use that dealership for any type of car purchase. I hope you are astounded by this example.  This is almost pure profit.  I can't think of a service manager who wouldn't want to see that kind of improvement on their bottom line.

© Copyright, 2001, J. Daniel Emmanuel