How it is computed
Sort every repair order line by pay type: customer pay, warranty, internal. Customer-pay labor dollars, customer-pay hours, and customer-pay parts are the three figures to carry. Customer-pay effective labor rate is customer-pay labor dollars over customer-pay hours.
Why it matters
Warranty rates are set by the manufacturer and internal rates are set by the store's own policy. Customer pay is the only pay type where the service desk's pricing, the advisor's presentation, and the customer's decision all meet. It is where fixed-ops gross is earned rather than assigned.
It is the pay type that builds absorption. A shop full of warranty work is busy; a shop growing customer pay is becoming independent of the showroom.
How operators read it
- Read customer-pay hours per repair order. It is the measure of how much work the advisor found and sold on each visit, and it moves before the dollars do.
- Read customer-pay ELR apart from blended ELR. The blend is dragged by warranty and internal rates the store did not set; the customer-pay rate is the one the desk owns.
- Watch the mix over time. A rising share of warranty work can look like growth on the gross line and be a shrinking retail business underneath.
Questions people ask
Is internal work bad?
No. Reconditioning used cars is real work the store needs done. It is simply priced by policy rather than by the market, so it is kept apart when the shop is judged.
Why does customer pay matter more than total service gross?
Because it is the part the store can grow on its own. Warranty volume follows the manufacturer's campaigns and the age of the fleet on the road; customer pay follows the advisor, the pricing, and the follow-up.
How A.D.A.M. reads it
A.D.A.M. reads the service department by pay type, with customer-pay labor, hours, and rate carried on their own and the shop's retention of its door rate computed from them. He reads it beside the numbers it trades against, names what the gap is worth, and leaves the decision where it belongs. What an AI advisor should do, and refuse to do.