How much does your shop charge for an accurate diagnosis made in 15 minutes by an A tech? How much for the same diagnosis made in four hours by your best B tech? In this Maximum Octane throwback, Kim Hickey revisits her conversation with Brian Hunnicutt about one of the most persistent problems in auto repair: undercharging. It originally aired as episode 74.
Brian, an ATI executive coach and Certified Profit First Professional, explains why shops struggle to charge for diagnostics, why owners feel like they are ripping customers off when they charge fairly, and how three simple questions keep the front counter and technicians aligned.
What You Will Learn
- The A Tech, the prima donna of every auto repair shop
- Why do some clients get the wrong idea of how much auto repair professionals’ time is worth?
- It’s 2023, and the automotive industry still struggles to charge diagnostic time properly
- Three questions to align the front counter and technicians in your auto repair shop
Why This Topic Keeps Coming Back
Pricing remains one of the biggest levers a shop owner has, and one of the most avoided. Many owners still give away diagnostic time, discount without reason, or set labor rates based on what the shop down the street charges. Brian’s conversation is worth revisiting because the problem has not gone away.
Part of the reason the problem persists is that many owners started as technicians. They remember what it felt like to be on the customer side of an expensive repair, and they want to be the fair shop in town. That instinct is good, but it often turns into giving away the most valuable thing the shop sells: skilled time. Free or discounted diagnostics, waived inspection fees, and labor rates set by looking at competitors all chip away at the margin a shop needs to pay technicians well, invest in equipment, and keep the doors open.
The Core Ideas
- A techs are valuable: their speed and accuracy should be reflected in pricing, not given away.
- Customers need context: many do not understand the training and tools behind a quick diagnosis.
- Diagnostics deserve a fair price: discounting them undervalues the most skilled work in the shop.
- Guilt is costly: owners who feel bad about fair pricing tend to underpay themselves and their team.
- Alignment matters: Brian’s three questions help advisors and techs stay on the same page.
Each of these ideas affects more than profit. When diagnostics are underpriced, technicians may feel their most demanding work is undervalued, which can hurt morale and retention. Advisors who are not confident in pricing tend to discount at the first sign of pushback, teaching customers to expect it. Over time, those habits shape the shop’s reputation and culture. Fair, consistent pricing does the opposite: it signals professionalism, supports better pay, and gives the team confidence that their skills are respected.
Value-Based Diagnostic Pricing
One way to think about Brian’s opening question is that customers are paying for an accurate answer, not just the minutes spent. Shops that price diagnostics based on skill, tools, and accuracy can charge fairly regardless of how quickly an A tech finds the problem. ATI’s How Much Should Your Check Engine Diagnostic Sell For? and Win the Diagnostic Game: Part 2 go deeper.
An analogy that resonates with many customers is a medical specialist. A patient does not pay less because an experienced doctor recognizes a condition quickly. The fee reflects years of training, equipment, and the value of getting the answer right the first time. The same is true in a modern shop, where accurate diagnosis may require expensive scan tools, subscriptions, wiring diagrams, and ongoing training. Advisors who can explain this calmly help customers see the diagnostic fee as an investment that prevents guessing and replacing parts that are not the problem.
Shops often structure diagnostic pricing in levels, with a set fee for initial testing and additional authorized time for complex or intermittent problems. Clear tiers make the conversation easier because the customer knows what to expect before work begins.
Helping Customers Understand the Value of Diagnostics
Customers often compare a diagnostic fee to a free code read at a parts store. Advisors should be ready to explain the difference: a code points to a system or symptom, while a diagnosis identifies the actual cause through testing. Without testing, a customer may replace parts that do not fix the problem, spending more money and time. A short, confident explanation usually resolves the concern.
Visual tools help as well. Digital inspection photos, test results, and short technician notes give customers evidence of the work performed. When a customer can see the failed component or the measurement that confirms the problem, the value of the diagnosis becomes obvious. Shops that consistently document their findings tend to face fewer price objections and build more trust over time. ATI’s Make Price Irrelevant explores how shops shift customer focus from cost to value.
Aligning the Front Counter and the Shop
Misalignment between advisors and technicians is one of the most common sources of lost profit. A technician may find a problem and assume the advisor will sell it, while the advisor may not fully understand the repair or how much time it requires. Estimates end up incomplete, labor gets underquoted, and the shop absorbs the difference. Brian’s three questions are designed to close that gap, and listening to the episode is the best way to hear them in his words.
Shops can support that alignment with simple habits. Hold a brief daily meeting where advisors and technicians review open jobs. Require technicians to note recommended repairs, needed parts, and expected time on every inspection. Encourage advisors to walk out to the bay when they have questions instead of guessing. When both sides share the same information, estimates are more accurate and customers receive clearer explanations.
Common Pricing Mistakes to Avoid
Setting labor rates by matching the shop down the street is one of the most common mistakes, because that shop’s costs, staffing, and goals may be completely different from yours. Another is discounting diagnostics to win the job, assuming the repair profit will make up the difference. If the customer declines the repair, the shop has given away its most skilled work. Owners also hurt profits by failing to raise prices as costs rise, which slowly erodes margin. ATI’s What’s Wrong With Your Labor Rate? explores how to set rates based on your own numbers.
Pricing Actions to Take
- Compare your effective labor rate with your posted rate.
- Set a standard diagnostic fee structure and train advisors to explain it.
- Track how often diagnostics are discounted or waived.
- Hold a meeting with advisors and techs to align on estimates.
For a personal story about the cost of undercharging, listen to Why Charging Fairly Isn’t Greed.
Frequently Asked Questions
Should auto repair shops charge for diagnostics?
Yes. Accurate diagnosis requires skilled technicians, expensive equipment, software subscriptions, and ongoing training. Charging a fair diagnostic fee reflects that investment and helps customers avoid paying for unnecessary parts. Shops that give away diagnostics often struggle to pay technicians well or keep up with tool costs. Most shops set a standard fee for initial testing and request authorization for additional time on complex problems, explaining the process clearly before work begins.
Why should I charge the same for a quick diagnosis by an A tech?
Customers are paying for an accurate answer, not just the minutes spent. An A tech’s speed comes from years of training and experience, and that expertise saves the customer from guessing and unnecessary repairs. If pricing is based only on time, the shop effectively penalizes its most skilled technicians. Value-based diagnostic pricing allows the shop to charge fairly regardless of how quickly the answer is found, while still rewarding skill.
How do I explain a diagnostic fee to a customer?
Keep it simple and confident. Explain that a code shows where to look, while a diagnosis confirms the actual cause through testing. Mention that the fee covers a skilled technician’s time, specialized equipment, and access to repair information. Share what the testing will include and when the customer can expect an answer. After the diagnosis, show photos or test results whenever possible. Customers usually accept the fee when they understand it prevents wasted money.
How do I know if my shop is undercharging?
Warning signs include struggling to pay competitive wages, a gap between your posted labor rate and your effective labor rate, frequent discounts, and diagnostics that are often waived. Thin margins despite steady car count are another clue. Review your financial statements, compare billed hours to hours worked, and calculate what you need to charge to cover costs and earn a healthy profit. A business coach or financial professional can help you analyze the numbers.
Why do shop owners feel guilty about charging fair prices?
Many owners came from the technician side and remember how expensive repairs felt as a customer. Others worry that customers will think they are being taken advantage of. That guilt often leads to discounting, which hurts the shop’s ability to pay employees, invest in training, and serve customers well. Fair pricing is not greed. It is what allows a shop to deliver quality work consistently and stay in business for the long term.
Resources and Links From This Episode
Connect With the Guests
- Brian: LinkedIn
