Why You Shouldn’t Always Trust An Expert
A few years ago, an economics graduate student named Henry Schneider drove his dad’s old Subaru station wagon up to Montreal. He had heard about a Canadian consumer interest group that had done undercover investigations of auto-repair shops, and he wanted to try a more academic version of its experiment. He handed the Subaru over to the mechanics working for the group, the Automobile Protection Association, for a complete inspection. They found that it had a small hole in its exhaust pipe, a blown taillight and several other relatively minor problems. Mr. Schneider took careful notes. But he also did something that no ordinary car owner would do. He asked the mechanics to show him how to mess up the car in a couple of serious but obvious ways.
They taught him how to loosen the battery cable (which can prevent a car from starting) and how to suck out coolant (which can leave an engine vulnerable to overheating). Armed with this knowledge, Mr. Schneider drove home to Connecticut and undertook a devilish little test. Schneider is trying to answer a question that has occurred to pretty much all drivers who have ever been given the unsettling news that a car needs more repairs than they had expected: Does it really? Or is the garage just looking to make some extra money off me?
Over the next few months, he took the Subaru to 40 garages, loosening the battery cable and draining some coolant before each visit and telling the same story, “We bought the car recently, and we should have had it looked at before we bought it, but we didn’t. It hasn’t started a few times. Can you check that out?” He also asked for a thorough inspection.
In most of cases, consumers aren’t sophisticated enough to make an independent judgment. That’s why they went to the expert. Economists sometimes refer to this situation as an “expert service problem,” because the same expert who is diagnosing the flaw is the one who will be paid to fix it. Anytime you call a plumber or roofer to your home or anytime you visit a doctor or dentist, you’re at risk of having an expert service problem.
Schneider’s results: Only 27 of the 40 garages did mechanics tell Mr. Schneider that he had a disconnected battery cable, the very problem to which he had pointed them by saying his car didn’t always start. Only 11 mentioned the low coolant, a problem that can ruin a car’s engine. 10 of the garages, meanwhile, recommended costly repairs that were plainly unnecessary, like replacing the starter motor or the battery. In all, only about 20% of the garages deserved a passing grade.
The Big Question: How can you be sure you’re not getting swindled? For an expensive repair, a second opinion makes sense, but it will be hard to know which garage to believe. Schneider noticed no performance difference between garages that talked him through what they found and less forthcoming garages. Until some savvy entrepreneur starts a garage-rating business, the best solution may be the oldest one: asking for a recommendation from someone who is knowledgeable enough to distinguish between good service and bad.
