Fixing Car Repair Prices - With Information

Nothing makes me happier than seeing an example of how the Internet is challenging professions in which one party has more information than the other - and tends to use it to secure an unfair slice of the value equation.  This will definitely be a full chapter in the eventual book version of The Challenge Dividend.

The book Freakonomics presents several examples, especially that of real estate agents, who do not always have incentives aligned with the home buyer/seller.  Enter sites like Zillow, that are making the process more competitive and valuable.  In this blog, I have written about sites that are using the Internet to similarly challenge and improve car salesmen, lawyers, venture capitalists, and school photographers.  Sites have even come up where you can get competitive pricing on hospital procedures.

Enter: Car-Repair Challenge

Clearly the process of getting a car repaired qualifies as a market where customers lack information, and have to trust the repair guy to give a fair price.  While many repair services are reputable, the bottom line is that there is to much power to their side of the exchange.  And the temptation to add to the repair service's bottom line is too much.  We need our vehicles and don't have the option of repairing them ourselves, so when the service calls us at work with an estimate we get an uncomfortable gut feeling, but usually green-light it and hope we weren't screwed too badly.

But the Internet is coming to the rescue for this market, too.  Stephen Wildstrom at BusinessWeek recently reviewed two sites that aim to give visitors a decent price estimate for car repair work.  He examined DriverSide and RepairPal.  Both are new and have some work to do; RepairPal is more focused on, well, repairs.  It uses a mixture of proprietary data and information supplied by other visitors to provide a price range for service companies in your local market.

I tested out RepairPal for myself by using an example of a recent replacement of brake pads that I had to do for my '99 Honda Accord.  Within 15 seconds I provided enough information for the site to return an estimate that fit well with what I actually paid at my local dealership.  I liked that the site also provide bite-sized content about where repair services tend to fudge the facts, and it gave me talking points to help make sure I wouldn't get screwed.  I also liked the fact that the site asks for feedback, can email the report to you (or your spouse), and lists nearby repair shops with ratings.  (I'd love a mobile version that I could pull up at the repair place alongside my mechanic.)

It's very early for services like RepairPal, but this is clearly a no-brainer for the consumer.  I'm sure within 5 years these services will get better and better.  Consumers will feel more comfortable with their service decisions, and outrageous prices will have to come down.  It's even good news for the repair services - as the best-priced and most-honest will succeed, while the bad guys will lose customers or be forced to reform. Once again, challenge in the form of Internet-information drives improvement. 

Comments

[Martyb]

Bob-
Brilliant post and great topic. I recently had my 2001 Passport with 50k on it in the shop for an oil change. It was making an odd noise, so I asked them to check it out. $270 later, the problem wasn't fixed (wasted Satuday). Furthermore, they told me that it was the transmission. Needless to say, I wasn't happy. I took it to the Honda dealership (Jeff Wyler in Florence, KY) and they diagnosed the problem for free. It was related to my catalytic converter theft at work. It was building up pressure and rubbing against my floorboard.
http://www.usatoday.com/news/nation/2008-07-06-car-theft_N.htm

My experience tends to think that diagnosing problems in car repair isn't a science, but I checked three repairs on this site, they all were in line with my service costs. Know if you're getting the screw.

Great post,
Marty