Yesterday CarMax's CEO said reconditioning costs was "opportunity #1" for the company to improve its cost structure. 

As some of you may recall, last week when I toured Lithia's new L2 concept (which to oversimplify is a mini CarMax) I talked about the L2 service techs being paid hourly versus a "flat rate." 

Flat rate simply means the pay (and time) is pre-determined. Chilton's (an insurance guide) or a manufacturer's warranty has already decided it takes a certain skill level mechanic a certain amount of time to do a job. The brake job (for example) should take 1 hour, and cost $75 in labor hours. 

If the mechanic does the job in 45 minutes, the cost is still $75 in labor hours (and the mechanic probably gets $30 of it.)  And t ...

To view the entire article:

• Click here to subscribe to everything for $400.00.

• OR click here just to purchase access to this article for $5.00.

Related Companies: CarMax
Lithia Motors
Midas
Monro Muffler Brake