"A Fair and Competitive Automotive Repair Marketplace"

Well welcome back everybody to a new year, hopefully filled with prosperity and Obama's pocket "change" (which is just the leftovers of what he gave to everyone else but you and I). But I digress...

I was crawling along the BAR's website today and came upon the following quote:” To protect and serve California consumers by ensuring a fair and competitive automotive repair marketplace and administering a model motor vehicle emissions reduction program. "

But I got to thinking, as I watch more and more businesses wither and die, does all of this regulation make it any safer for consumers, and what about the businesses? I understand that having somewhere for our "911" calls to go so to speak is nice to have, but the consumers don't pay for their protection: we do. I am not complaining about that so much either, but what does grind my gears is that it drives prices higher, and consumers demand them lower. So money that could have been made at a lower price goes towards licenses, fees, taxes, bonding requirements, presentation requirements etc. So just like gas, every purchase a consumer makes includes the costs of such things in small increments. At the same time a market will only sustain a certain price, so the higher the fees, the higher the percentage it takes up in the price. So if the market will only hold a price of $100 per widget and 15% of the price has to go to covering the fees (not including any EPA or FED taxes or even rent) then there will be $85 left towards the rest of the stuff. So say you do oil changes, you need an EPA permit and need to pay EPA fees every quarter PLUS the cost of disposal. So now your left with $75. And in order for the business to cover payroll and the rest of the rent and utilities it will have to perform 100 widget services a month, and that reaches the break even point. Normally this business does 150 services a month. Now in a bleak economy the business is only performing 115 services a month and the market price has fallen to $85 per service. So now that volume is down, and the income is down and the expenses remain the same how do we fix it, we cut expenses.

How do we cut expenses? HMMM... we run the A/C less, turn off computers at night. Ah ha! we already have a loyal customer base, so we waste money to register with the state, we can fly under the radar and save hundreds, we can even drop those bonds and insurance, pay employees under the table to avoid taxes etc etc. So even before the economy took a turn south, many people saw this way of running a business as very lucrative, and profitable. So the automotive industry has turned into a black market business, just like alcohol during prohibition.

I do not say this to encourage people to stop paying taxes or to scare them, or to discredit the BAR or many other state consumer protection agencies. But rather to help people to understand what you really get when you go to have your car repaired. I do not recall the statistic, but the BAR has helped mediate consumers and businesses and assisted consumers receives a bundle of money in refunds or penalty money without ever have to go to civil court. Although the BAR cannot represent consumers in court, they do their best to mediate, and talk to the businesses on the consumers behalf in an attempt to resolve the complaint without further action.

So I understand that there are folks who pay stupid cheap rent and can afford to be cheap, but others pay a bit more for rent and pay their dues where applicable honestly and need to charge a bit more than the other guy just to get by. Which is where I go back to a prior post and remind folks that you may not be getting the best bargain by getting the lowest price.