Tuesday, August 21, 2012

Estimating An Old Car Restoration: Why Work Is Usually Billed Hourly vs Time Charts & Estimating Guides

by Andrea L. Algar
Motorheads Performance

One thing that is always difficult to explain and have understood is the estimating process for any type of old vehicle, whether a classic car, muscle car, street rod, antique car, vintage truck, old American sport car, or even an old race car. The fact is that even if your shop specialized in one single Manufacturer, Make & Model car, you still might not be able to accurately estimate a complex repair, engine restoration or full body restoration because there are just so many variables, and too many unexpected surprises that can come up.

How do you keep from falling into the hands of unscrupulous techs or shops that will tell you what you want to hear versus the truth that you need to hear? We believe that educating owners is the best way to build realistic expectations of cost, time and result. I hope to demonstrate this through examples, data, and opinion which reinforces this.

What Do Restoration Shops Say About Estimates?

I did a simple "Google Search" for the how classic car restorations are estimated, and took a look at the returns that addressed the question. Here are five of those selected as I went down the list. I'm not familiar with the shops or the authors, but they all seem to perform restoration and/or body work, and here is how they describe the process of estimating a project:

Wilson Auto Repair - Garland, Texas states, "We only give estimates and quite frankly you should expect to pay more than the estimate. We inspect every part of your car and recondition as we reassemble. As we find other areas that need repair that increases the price. It is not possible to anticipate everything that will need to be replaced or repaired. Rust repair and fabrication of metal can increase your starting estimate by 40%. Custom work will add another 20%."

A Squidoo article by dcatkin entitled, "How Much Does It Cost To Restore A Muscle Car" describes it this way, "Yest it's true that we can estimate small things, like an engine rebuild, until you decide to modify the engine, then all bets are off. There are so many things that we can't see until we have taken the car apart, and by that time we have already started the work. Some of the common thing that will hide form an estimate are, wiring problems that can't be seen by the eyeball, rust in places that can't be seen, and engine problems usually won't rear their ugly heads until it's to late. This always causes problems for you, and the shop doing the work. I can give average times that it take to restore a car that is in excellent, or good condition, but this can be deceiving to the person who owns the car. Everybody thinks that they have just bough the only rust free, perfect problem free muscle car left, but that is never the case. Now for the some what of an answer, my shop has a labor rate of $75.00 per hour, and the average car that is in good shape will take no less that 1,000 hours to restore. The math is quite simple, this means $75,000 just in labor, not to mention the parts, these jobs are never cheap."

GogoCycles.com describes estimating costs this way, "The process for restoring each car is different. I can't even steer you towards the BEST and CHEAPEST antique car parts suppliers because it's a rare thing for the same catalogue to have what I need for every restoration! You can read car guides by the dozen and still come upon unique situations that will push your limits and teach you something that you never dreamed that you would need to know! You can write all the estimates you want on how much it will cost to do a job and there's one sure bet; the cost and the time to complete your classic car restoration will exceed all estimates no matter how careful you were with the details."

Crusin' Auto Body of Michigan describes their estimating procedure as, "Restoration projects can be difficult to estimate because there are so many unknown repairs on any project. This makes it very difficult to predict the cost of a restoration because we can only estimate what we can see, we cannot see under the paint, carpet, etc. The true cost is only seen during the actual repair process and each restoration does hold its own unique challenges. To begin the estimating process we will take numerous photos of the vehicle. We will then obtain parts prices, estimate time for obvious fabrication/repairs that may need to be completed, estimate time for the paint process, etc. We will discuss specific requests for your project also. With this information we will then give you a general idea of the cost to repair what we can see. When the vehicle arrives at the shop we will disassemble the vehicle and completely strip the vehicle of all paint and fillers. At this point we can see the true extent of the repairs needed and any additional repairs can be estimated. We can also make recommendations as to the options available to complete the project and estimate a timeline for completion. We can assist you in choosing a mechanic shop and/or upholstery shop if needed but these costs are not part of our estimate. Auto restoration is a substantial financial commitment. Customers that want to complete a restoration project should be prepared for the investment. All restoration projects are billed on a time and materials basis only."

David Grainger, President of The Guild of Automotive Restorers and Guild Classic Cars of Ontario, Canada wrote a very comprehensive explanation, which I thought was well written and had good examples to back up his points. Since it is rather lengthy, I've provided it as a link which you can open in a separate window.

Reading other shop policies and views on estimating it is clear that all make similar attempts to warn their customers of things that can, and do, go wrong when you begin a restoration project. But these are often difficult things for the customer to hear. He/she wants to believe that somehow, they found the single car that truly is in great shape and won't need any body work, or that the engine is in perfect working condition. Maybe this is what they've been told when they bought it, but THAT is a story for another day. Shops generally don't like finding that additional work is needed. Not only is the news upsetting and seen as "bad" to their customer, it can throw a wrench (pun intended) in the shop's carefully planned scheduling. It can delay the start of new projects, and delay in finishing others already in process. More people get disappointed and things snowball. 

This is why is is helpful for customers to think out exactly what they're looking for, what they want to use their car for, and what their budget is, among other things. Guy Algar explains, "We have a list of questions we like our customers to consider before we draw up a final plan of action. Not every shop handles this the same way, but we find it helps us give better options and recommendations. For instance, if you were wanting a once a month cruiser, we would recommend we take care of safety and performance issues first, and this is where the bulk of your budget might go. Time is not usually as critical for these drivers, and we may suggest phasing out the paint and body work, or even other options if finances are an issue. If you were looking for a daily driver, we would make suggestions that reflect the fact that this car or truck needs to run well, be comfortable, safe and above all else, reliable. A show car would obviously need a bigger budget for a flawless paint job, a clean, flashy engine compartment and nicely detailed interior. As you can see, there are many things beyond parts and labor that go into preparing a well thought-out estimate." 
Mike Anderson
Collision Advice
 Mike Anderson, of Collision Advice, has experience as a former shop owner and now operates a training and consulting firm to body shops and collision centers. He shares this explanation of why collision centers face real problems when estimating, and how using any one of the three biggest estimating databases that give labor times for specific procedures don't always handle situations accurately.

"A project I sometimes take on as a consultant is auditing a shop's estimates and closed repair orders to review how complete and accurate they are.

"Shops often complain about the added work and lower profits that result from use of recycled - or used - parts, so that's one aspect of the repair orders I look over during my review. I sometimes see, for example, a shop charging X hours to install a used deck lid, the same amount of labor time to overhaul the part. That sets off alarm bells.

"Why? Because shops are correct when they say there are added procedures required when working with a used part. There is, first and foremost, what I call the R, R and I time. You aren't just removing and reinstalling (R&I) a part. There's often an added step.

"Say that you're replacing a damaged door with a used door. You have to remove the door handle off the damaged door if you are going to reuse it. That's one remove (R). You have to remove the handle off the used replacement door. That's a second R. Then you have to reinstall the handle on the used door once it has been painted. That's the install (I). So it's not just R&I. There's two "removes" and one "install". It's R, R and I. That's additional labor.

"I'm not a promoter of used quarter panels; in most cases I don't think it's a proper or OEM-approved repair. But if you choose to use one, there are plenty of R, R and I requirements that you need to keep in mind. You may have to remove the striker off the damaged panel, and the one off the used replacement part, and then reinstall one on the used part once it has been painted. That's R, R and I. The same could be said for door seals or gas doors or any number of parts."   -  Mike Anderson

Guy Algar

When we do restoration work on an old car or truck it can sometimes involve an awful lot of R, R & I, sometimes even R, R, R(as in repair something) & I! Guy Algar explains, "It's more the standard than exception, especially when you are striving to restore a 40, 50 or 70 year old vehicle to original, or restore with "correct" replacement parts from a donor vehicle for instance. Take a customer who wants to upgrade from the vehicle's original engine to one from a newer modern car. Beyond the fact that this tends to be a very expensive proposition, many problems can come up when you're taking from a donor vehicle. It's not just the engine that needs to be swapped over. You're dealing with different wiring harness, and more.

"One customer I had wanted to swap engines in his old truck. He wanted EFI, and ended up buying a donor vehicle with the engine he wanted. In prepping the new donor engine, I found that it was in bad shape and needed a rebuild. It was a mess - thick, tar-like buildup everywhere, all the seals were shot, and it definitely needed a valve job. This greatly increased costs over my original estimate, which was just for the engine swap with a number of expected issues that comes with this type of conversion, which I'm not a big fan of. The problem was that the engine would not have performed well, or run very long without serious problems unless the rebuild was performed. Even with a new crate engine swap you can run into problems with accessories, belts, hoses, etc., and have unexpected costs.

"Since insurance is not involved with the type of work I perform, and the fact that there are simply too many variables when estimating a restoration, it is impractical to try to use an estimating guide. Most restorations are performed at an hourly rate following a complete inspection and "estimate" of the work to be done. Barring any unforeseen damage, rotted metal, seized engine part, etc., these estimates usually get us in the ballpark of what is to be expected, and the customer will always have the opportunity to make informed and educated decisions about other things found as we go along.

"This is why it is extremely important for us to develop a good working relation with our customers. We start off right away with our "Welcome Kit" which is used to review our terms and policies, and to discuss what we expect from our customer and what they can expect from us. It works well for us in forming realistic expectations, and starting a good line of communication. We keep this going by sending e-mail updates that include progress photos, giving options for parts purchases, and phone calls where we can discuss the decisions that are needed along the way."

We, as an industry, are faced with many challenges on a daily basis. Clearly, having an understanding of our customers, including what they want, and what the obstacles are for them to achieve this is key to delivering a final product that they're happy with. Unfortunately, not all businesses view the relationship with their customers as a #1 priority. This is the topic of another article this week entitled, "What's Wrong With These People!"


Mike Anderson, a former shop owner, currently operates CollisionAdvice, a training and consulting firm. He also acts as a facilitator for DuPont Performance Services' Business Council 20-groups. Mike's comments were reprinted with permission from CollisonAdvice courtesy of ABRN.

Guy Algar is Shop Manager of Motorheads Performance, a shop which specializes in repairs, maintenance, performance upgrades and restorative work on cars and trucks from the 1920's through 1970's. Guy is a Mechanical Engineer with over 25 years experience. He holds 5 ASE Certifications from the National Institute for Automotive Service Excellence and has been working on old cars and trucks for over 37 years.

ABRN - Auto Body Repair Network
CollisionAdvice - Mike Anderson
Database Enhancement Gateway
Guy L. Algar, Shop Manager Motorheads Performance, Leesville, Texas
Cruisin' Auto Body of Michigan
Wilson Auto Repair, Garland, Texas
The Guild of Automotive Restorers and Guild Classic Cars - David Grainger

Andrea L. Algar is co-owner of a classic car performance and restoration design shop in Leesville, Texas. Motorheads Performance specializes in repairs, maintenance, performance upgrades and restorative work on cars and trucks from the 1920’s through 1970’s. Her husband Guy L. Algar is a Mechanical Engineer with over 25 years experience. He holds 5 ASE Certifications from the National Institute for Automotive Service Excellence and has been working on old cars and trucks for over 37 years. Together they share their passion for old cars and trucks with other enthusiasts from around the country.