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Effective Labor Rate

Definition for new zealand automotive professionals.

Effective labor rate (ELR) is the actual revenue generated per labor hour in a dealership service department, calculated as total labor revenue divided by total labor hours sold. It is the single most important metric for evaluating service department pricing efficiency.

New Zealand Context

In the new zealand dealer market, effective labor rate operates within the context of Consumer Guarantees Act (CGA) and Fair Trading Act. Dealerships running Pentana, Titan DMS, Autobase encounter effective labor rate in their daily workflow. DealerInt captures the decision layer around effective labor rate that your DMS wasn't designed to track.

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US Definition · NZ Glossary

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