RepairPal: Yes, your mechanic is ripping you off
New site gathers data on acceptable repair costs, as well as reviews of mechanics.
As CEO David Sturtz explains, car repair is one of the classic cases where the consumer "is at an extreme informational disadvantage." Mechanics know more than you do, and this disparity can be used in the worst way: to completely rip you off. Even in the best cases, many people suspect their shop is cheating them out of money whenever their ride needs unexpected work.
To drive home his point, Sturtz told me about a study the company did when it was forming: 50 calls were made to shops asking for a price quote on a given repair. Then, a short time later, the calls were made again to the same shops, but this time with women making the queries instead of men. The average price difference was 17 percent higher when women called. Sturtz thought he could level the playing field, and not just for women.
RepairPal can't tell you what is wrong with your car. But if you tell it which repair the shop says you need, plus what car you have and where you live, it will tell you the real price range for the repair. The data that goes into the generation of the this range is gathered from a number of sources, including one of the super-secret labor cost estimator tables that's been available exclusively to mechanics up until now. (RepairPal has a five-year exclusive on this data.)
Sturtz worked hard in my interview with him to hammer home his point that the price estimates RepairPal generates are comprehensive and accurate and that they take in a ton of information while throwing out specious data like prices on inferior-quality parts. Nonetheless, I found a huge range on some repairs -- from $1,100 to $2,400 for a clutch replacement on my 1996 Saab in San Francisco, for example. Sturtz told me that the data did reflect the reality of different parts costs, labor costs, and competencies that shops have in estimating repair prices. He also said that the range for higher-volume vehicles, like mid-'90s American cars, is tighter. (I found the Saab figures reassuring, by the way: My local shop charged me $1,200 for a new clutch a month ago.)
RepairPal has a host of supporting features for its repair cost estimator, such as expert advice that you get when you look up a repair. For example, if your mechanic tells you that you should replace your spark plug wires when replacing a failing ignition coil, and you can see that RepairPal recommends that for your car, you can feel less suspicious of your mechanic.
There's also a way to rate your auto shop, and if you tell the site about a repair you just had or are about to, it will give you a short quiz at the appropriate time on the transaction (estimated vs. actual price, for example) as well as asking you about your subjective satisfaction with the repair. All this goes back into the giant pool of data RepairPal will use to generate recommendations and repair price estimates.
The site will keep repair logs for your cars, recommend scheduled service items. And should you want to sell your old heap, it will generate widgets of those logs to embed in eBay or Craigslist sale listings.
RepairPal is a great idea and nicely executed, too. The hard job for the company is going to be to get users, since it's not like this site is going to be front-of-mind with them all the time. Interest from blogs, consumer advocates, and an upcoming hit on Car Talk will generate spikes in traffic, but not the persistent awareness this service will need to survive. Ongoing traffic will come primarily from search engine optimization and search advertising, Sturtz said.
Revenue will come from context-sensitive advertising at first, but the longer-term opportunities for this business are much more interesting than that. Sturtz is convinced that mechanics will love this service, since it has the potential to reduce the natural suspicion customers feel when they're told about the price of a repair. And since Sturtz thinks he'll end up as friend to the auto shop, he's looking at an OpenTable model to help shops run online scheduling for repairs, and he'll collect booking fees from that. He's also thinking that at some point he may put an open bid model on the scheduler, so users could put a call out for a standard repair (like a 30,000 mile scheduled service), and then collect bids from nearby shops on that service.
Also to come is a mobile app or a call center for the service, so consumers will be able to use the site at time they need it the most: when their car has stranded them in an unfamiliar town.
RepairPal could be a major disruptor to the auto repair business. I hope the company is able to deliver on its vision.