Dealer "flat rate" explained

The amount of time an authorized dealer is reimbursed for performing warranty work for their host manufacturer is called flat rate. It's actually warranty flat rate, that is, it is designed to be used only for warranty service. A manufacturer first establishes a fixed amount if time all its dealers will be reimbursed, a time allotment that is contractual and thus is like medical insurance, it has very little connection with the amount of time something really takes. Typically this time allotment is roughly half of what a dealer would charge a retail customer. After determining the global time allotment, the manufacturer then works with each dealer individually to establish the money rate that this time allotment will be multiplied with to arrive at the actual money value of reimbursement. Dealers in lower economic areas will be awarded lower dollar rates of reimbursement, and higher ones higher. The time allotment is multiplied by the dollar allotment and the reimbursement value is typically applied to the dealer's outstanding parts account.