Why is the dealer's quote so much lower on a rack and pinion job?

Dear Car Talk

Dear Car Talk | Aug 01, 1995

Dear Tom and Ray:

I've been told I need a "rack and pinion job" on my '86 Honda Prelude. I was quoted $399 by a local repair shop for the parts only. Surprisingly, the Honda dealer quoted me $385 for parts AND labor, the parts portion being only $45. Needless to say, I am confused. What's going on here?

RAY: What you're seeing is two different approaches to the same problem, Rena.

TOM: A "rack and pinion job" is a vague term, Rena. But we're going to assume that your steering rack is leaking. The local garage, not being intimately familiar with Preludes and Prelude steering racks, wants to simply take the old one out and replace it with a rebuilt unit. That would solve the problem, but it would likely cost you $399 in parts, plus a couple of hundred more in labor.

RAY: The Honda dealership, being on a first name basis with many Prelude steering racks, thinks they can fix your rack without removing it from the car. That saves you a bunch of money on labor (even if their actual hourly rate is higher) and saves you money on parts, because they're probably just replacing the seals, o-rings, and fluid.

TOM: And in this case, I'd definitely go to the dealer. Not only will it save you some money, but on a complicated repair like this one, they're less likely to screw it up because they've done the same exact repair many times over.

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