Wednesday, April 21, 2010

Moral Hazard Abound

I have been exceedingly frustrated by the information asymmetry in the auto repair business. Certainly this occurs elsewhere, such as computer repair and maintenance, but since computers are a much smaller investment, businesses usually can't get away with charges greater than the value of a new computer (unless you have to get critical files from a damaged hard drive or something).

I have now gone to five different auto repair shops in the area for routine oil change and tire rotation, and ONCE for a repair: my wheels were out of alignment (diagnosed that one myself!). Four out of the five places tried to sell me an extra service, from fluid flushes, serpentine belt, a fix for a water pump leak, even to brakes; one of the four actually succeeded. I found out later it was way too soon for the service. Needless to say, my car is in top condition for its age in spite of not following all of those heavily touted "recommendations."

I've been on the search for automotive courses or a highly knowledgeable friend to teach me how to check all the parts under the hood myself. Like my computer, which I learned how to fix inside and out with help from nerdy friends and self-teaching, it appears I'll have to do the same with my car to save money and my peace of mind. If I can determine not only whether something is wrong, but what is wrong, then I can even out the information imbalance.

Clearly, my time would be better spent doing something more productive than becoming a specialist on my car, but right now the cost of labor at an auto repair shop on bogus services is higher than the value of my time spent specializing. Of course I say 'no' when I smell something fishy, but not really knowing if it's a real or fictitious problem leaves me uneasy.

So lately I've been pondering ways the auto repair business could become more transparent. Frankly I'm stumped. Sites like Yelp and CostHelper haven't been helpful in this area because the people who rate auto shops and post "competitive" cost estimates are usually as auto illiterate as myself. Additionally, being AAA and ASE certified and BBB accredited seem ineffective for this kind of problem. Thoughts on how to address this? Has anyone in the area found a mechanic that doesn't try to push extra, unnecessary services?

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