Parts and Labor Comparison

"Our labor rate is $70 per hour but labor is only one ingredient of any repair, with the other being parts.  National statistics show that parts are generally twice labor which means that for every $70 in labor there would be about $140 in parts.  So one hour worth of repairs would be $210. Five years ago our labor rate was less and it will probably continue to increase slightly.  What do you think the labor rate will be 5 years from now? (If the customer's number is conservative, use it, if not suggest a more conservative figure such as $80.) At $80 per hour, parts would be about $160, as they will continue to increase because the 2:1 ratio has been consistent for a long time.  This means an hour worth of repairs would be $240.  Now it wouldn't be fair to use the $210 figure because you have a manufacturers warranty and it wouldn't be fair to use $240 because you break down sooner and it would cost you less.  So lets take the average ($210 + $240 = $450/2 = $225."

"Sir, how many days a week do you drive on your vehicle? (Customer says 6). Wow, you rely on your vehicle a great deal don't you? Well at 6 days a week that would be 312 days of driving a year (6X52=312) and 1,560 days of driving over the next five years."

"What do you think the chances are of your vehicle being in our service department for eight hours worth of repairs over the next 1,560 days of driving?  I agree they are pretty good.  And at $225 per hour times 8 hours the repairs would equal $1,800."