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If you're like most Americans, you've probably taken your car in for a minor repair only to be shocked at how much you were being charged for parts. As an example, Melanie needed new wiper blades in order to pass her New York State inspection. She allowed the repair shop to replace them with the blades of their choosing, discovering later that they charged her $17.99 per blade. The same blades could have been purchased at the auto parts store down the street for almost half the price. So why does it seem that the repair shop is gouging us with the cost of parts?
First of all, "gouging" is a matter of perspective. In America we have a habit of accusing companies of gouging anytime their price is higher than what we want to pay. Yet since most of us don't understand the realities of running a business, we really have no idea whether or not the asking price is fair. In the case of the auto repair shop, they generally do charge significantly more for parts then your local parts store. But there are reasons for it.
The most significant factor driving the cost of car parts provided by your repair shop is their quality. The fact is, there is a huge shortage of qualified repair shops and mechanics in the U.S., so most reputable garages have long delays in getting cars in. They don't need the hassle of dealing with poor quality parts and unhappy customers, so they almost always buy top-of-the-line replacement parts. These parts cost money.
Next, you must consider the cost of doing business. If the repair shop stocks the part your car needs, there are overhead costs associated with it. If they don't stock the part, they have to pay certain costs associated with ordering it and having it delivered. They need to build those extra costs into the price or they will go out of business.
Finally, there's the standard markup that everyone in the supply chain charges. Your mechanic not only has to cover his costs, but he also has to put a little money in his own pocket or there's no point to being in business to begin with. Standard markup in most industries is 20% to 40%, although that may not be the case with your mechanic.