Average independent garage labour rates revealed

UK labour rate study shows garages provide outstanding value for money and calls on workshop owners to properly calculate costs

Average independent garage labour rates revealed
Image: Bigstock.

The cost of labour at UK independent garages is falling behind inflation and owners are seeing diminishing returns year on year, the Independent Garage Association has said after it published the findings of its latest garage labour rate study.

The research shows that many garages are absorbing increases in the cost of labour, technological investments and access to technical information.

The IGA warns such practice is unsustainable and is calling on garage owners to ensure all costs are built into their charging structures.

Stuart James, IGA chief executive, said: “The study clearly shows that in many cases, independent garages have been absorbing the rising costs involved with running a garage business, rather than passing those increases on to their customers.

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“While this is great news for their customers, it is impacting on garage profit margins year-on-year, which in the long-term is not sustainable.

“In these difficult times, it is more important than ever for garages to build all ongoing costs into charging structures to future-proof their businesses.

“A significant number of members have taken part in this study and feedback indicates that they will use this to review their charge out rates, so they can make a sustainable margin and continue to provide their vital services to local communities.”

Average independent garage labour rates

The study findings, based on a survey of 3338 independent garages from across the UK, show that throughout the average labour rate charged by independent garages in 2020 is £47.47.

The National average for England is £47.90, for Scotland £45.52, for Wales £40.61 and for Northern Ireland £40.55.

The highest regional cost is in the M25 Interior region, with an average hourly labour rate of £55.48.

The IGA compared 2020 labour rates with findings from its earlier 2012 study and compared changes in electricity and insurance costs over the same period.

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It found that the overall national hourly labour rate has increased by just £5.88 – 6.7 per cent below the UK rate of inflation, which has risen by an average of 2.5 per cent per annum between 2012-2020 as stated by the Bank of England.

The UK independent garage labour rate study was carried out by the IGA over the past twelve months to provide its members with a reference tool to establish whether their labour rate is comparable with other garages in their vicinity.

The IGA has also developed a ‘labour rate calculator’ to help members to review their costs and work out an approximate breakeven hourly rate.

Members will receive a hard copy booklet of the study over the coming days.

For further information about the IGA, select ‘more details’ below.

How do your labour rates compare? Share your comments below.

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  • #203624 Reply

    The UK’s independent garages are falling behind inflation and seeing diminishing returns year on year, a comprehensive new garage labour rate study ha
    [See the full post at: Average independent garage labour rates revealed]

    #203633 Reply
    Rob Thomas

    I have just increased my labour rate to £65.00 per hour, we work on fixed price servicing which we keep competitive and we quote competitive on the telephone. Add on work is now costed at the increased rate but we do give our loyal customers a 10% discount on all parts and labour, a bit like a loyalty club and we always explain our invoices and pricing “With your special discount and vat your total is” we have not had anyone quirie it yet.

    #203634 Reply

    Are we referring to recovered labour rate over a full day or the rate charged out per hour ?
    If the latter are we including MOT charges which have been frozen for the last decade ?
    We charge £74 p/h for book time or fair estimate when no book time is available.
    We do simple jobs like battery fitting, bulb/wiper blade replacement, antifreeze top up, etc. FOC.
    We charge the published max for MOT which after the pad fee brings in only £52.80 p/h.
    We are in northern Hampshire.

    #203635 Reply
    Andrew Parsons

    This is something we’re all pretty much aware of. There’s a number of factors that come into play. Unregulated industry creates bargain bucket businesses who survive on being cheap not being the best, large companies like Kwikfit, Servicingstop, Halfords and the like discounting services and MOT’s and franchised dealers lowering menu prices to compete. With some garages offering a “service” for under £100 it is doing nobody any good and undervalues our trade. Good technicians train for years, well beyond an apprenticeship, and then work on something that has the potential to kill if you get it wrong. Until we have regulation this will never change.

    #203636 Reply
    l r craven

    garages are their own worst enemy, how many charge the full price for an MOTC ,? , if they are happy to do MOTC for as little as £20, its stupidity, when did the motc last see a rise,a lot of yrs ago, so clearly they dont Deserve a rise, they are there own worst enemy, & labour rates a dictated by how busy you are

    #203645 Reply
    Graham cox

    we charge £68.00 plus vat an hour as an independent with a german car pedigree and 30 years of trading
    why on earth are garages charging low fogures,when an average dealer in our area is £130.00 plus vat per hour
    we are always busy and it is very rare for us to pre price a job
    I think the other independents need to sit down and work out there costs,i think they will be in for a shock

    #203650 Reply

    Here at Meat-Head-Motors we charge £40+VAT per hour

    Some jobs take 20 minutes but still charge an hour

    Some jobs take 5 hours charge 6

    We are located between London and Scotland

    #203654 Reply
    Mahesh Perera

    a garage run on industry standards, experience skilled staff and overheads …..plus ..if you want to pay descent wages to your mechanics with up to date equipment and tools, maintain the garage up to all regulations, ie.. proper insurance, certificates for lifts, jacks, electrical systems, health and safety programs, staff clothing, heating for garage….. pay vat and taxes, then 60 to 80 plus vat per hour,,, a garage with none of these just a roof and spanners can be 5 to 10 per hour and no vat ….

    #203657 Reply
    andy watkins

    I learnt that being cheap brings in that certain type of customer, always complaining, arguing that they can buy it cheaper from Euro. Get your rates right and your business will benefit. Phone up a plumber with his bag of tools Or an electrician, ask how much for a Landlord Electrical Safety Check.
    If your parts supplier sells to the public cheaper than what you are paying move your business away from them and use someone else, If someone says that they can get the parts cheaper online, tell them that they will not get the warranty that you offer and the parts online are normally rubbish. TPS discount on some parts less than 5%, try running a business on 5% markup.
    You take the legal responsibility for the part, and if you are paid with a card give the profit to a card company.
    Euro reps say that garages should charge higher labour rates to compensate for not making so much on the part, until they have to pay warranty which is £35.00 / hour and has been for at least the last ten years.
    Take some time out and you will see where your profits are going.

    #213634 Reply
    Paul Head

    We are independent Land Rover Specialists in Suffolk going 17 years, we also cater for light commercials and a few 7.5 tonne horseboxes.. 4 mechanics, 1 parts manager, 1 admin, 1 front of house, phone bookings etc Currently £59 per ex vat. Last estimate costs per hour around £35 per hour sold. Margins are not huge. Our guys are on around £25K a year. We run online and counter parts sales to public and trade that helps. Spent a lot of years too cheap. Have a good look at your costs. We were running £10 per hour too cheap until about 3 years ago.

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