Quotes and Estimates

This Topic Includes:
Estimates
Quotes
Quote checklist
Paying for a quote
Extra work after quote received
Seller carries out unauthorised work
Service includes goods
When things go wrong
High price where no quote or estimate

An estimate is a price the seller thinks the work will cost, based on their past experience in that kind of work. It is not a firm offer to do the job for that price.

A quote is an offer to do a job for a certain price.

Estimates

Estimates are useful if you have never had to buy that type of service or product before and you want a ballpark figure of how much you are likely to be charged – eg, getting a tap washer replaced or having a driveway laid.

The seller must use reasonable skill to provide the estimated price so that your decision to use the seller is based on sound information,

If you get an estimate and you decide to use that particular seller, make it clear before the work starts that you want to be informed if the final price is going to be hiqher than the estimate. If you can, get their agreement to do this in writing. Asking to be informed of cost increases will give you the opportunity to cancel the work before it costs you more than expected.

Once you have an estimate, and the work is likely to cost a lot – eg, home renovations or building a fence – you should ask for the price to be fixed by getting a quote.

Quotes

If you accept a quote, the seller has to do the work for that price. In most cases, it is best to ask for quotes in writing. Then, if a problem arises you will have a record of what was agreed to.

A written quote should show:

• what work is to be done
• start and finish dates
• the hourly rate
• the cost for materials
• how long the quote is good for.

The costs of materials, hourly rate, etc will change over time. It is reasonable to agree that a quote is only good for a set period of time.

How do I qet a quote?

Sometimes it's just a matter of finding out the standard price. But, when a seller has to look at the job to work out the cost, you should get a written quote. For example, plumbers will need to see where the drains are and how much digging is needed to reach them, before they can say how much it will cost to clear a blocked drain. Find out if they charge for making a quote.

Quotes checklist

• Decide what you want done, what the finished job should look like or do, the quality you expect, and when the work is to be completed. Write the details down so you can explain them clearly.
• Contact at least three sellers and ask them to give you a quote in writing. This will give you several prices to choose from.
• Give each seller the same information so that all the quotes are based on doing the same work and using the same materials. If you make any later changes to what you want, tell each seller so they can change their quotes.
• Decide which quote you will accept and tell the successful seller. You do not have to tell the others who you chose, nor how much the other quotes were for.
  Before you accept a quote which is much lower than the others check that they understood the quality of work and materials you want.
• If you don't understand a quote ask for help from your local Citizen's Advice Bureau.

Note about GST

A quote must include GST in the price, or state that GST is not included. If GST is not mentioned you are entitled to assume that it is included in the price given – but it is wise to check this with the seller so there is no unnecessary disagreement later.

Paying for a quote

eg, you take your watch to a repairer because it won' go. They say they will look at it. When you return for the watch they say it is not worth repairing and ask you to pay $10 for looking at it.

Some quotes are free. However, it is common practice to charge for a quote, so check this out with the seller. If you have the work done, some sellers will take the price of the quote off the repair bill.

Needing extra work after quote received

eg, you accept a quote to re-line your bathroom in water proof wallboard. When the old lining is removed it is found the timber studs are rotten and must be replaced.

The seller must get your permission to carry out extra work. You always have the right to refuse or accept any extra work suggested by your seller. But when extra work is needed to complete the job, you may have to pay more than the quoted price.

In order to reach an agreed price above your quote, contact others in that industry for information on costing. This will give you some idea of how much more you should expect to pay. If the work is done at a fair and reasonable price, then you should pay the cost.

Seller carries out unauthorised work

For example, you ask the garage for a Warrant of Fitness for your car. The garage's fee is $25. The garage fits a new tyre and charges you an extra $90. They say you would not have got the warrant without it. Because you did not agree to spend more than $25 the garage should not fit the tyre without your agreement.

You do not have to pay for work you did not agree to, even if the quote is not written down. (Of course, in this case the garage can remove the tyre and give your old one back!)

For more details, see unauthorised work.

What if the service includes goods?

For example:

• replacement parts with repairs
• carpet and carpet laying
• curtain fabric plus a measure and making service.

Make sure that the quote you get includes the total cost of any goods supplied, plus the price of the service.

When things go wrong

Here are examples of two problems that can happen and what you can do about them.

Charging more than the quote

Write a cheque for the amount of the quote.

Send the cheque to the seller with a note on the back, or a separate note, which says:

This payment is offered on the condition that banking it will be considered full and final settlement of your account no... dated... 

Signed... 

Keep a copy for yourself. If the seller doesn't accept this amount as full payment they can either:

• bank the cheque and still bill you for the rest of the money, or
• return the cheque.

Although the seller may not accept your offer, sometimes it is worth trying to reach a compromise. If you are determined not to pay any extra, you may have to take action through the Disputes Tribunal or Court to sort the matter out.

Sometimes a shop will offer free measuring, making or installation when you buy goods. Compare prices of the same goods in other shops to be sure the cost of the service has not been added to the price of the goods.

High price with no quote or estimate

eg, You ask a mechanic to fix the car's radiator. When you collect the car you receive a bill for $450. You think this is too high for the work that has been done. You can ask the mechanic for an itemised account showing the cost of parts, labour, any other charges and GST. Then ask two or three other garages what they would charge for the same work. Average their prices out – this is the amount you should pay for the work done on your car.

The Consumer Guarantees Act says if you buy goods or services and the price is not set or discussed at the time then you only pay a reasonable price. You can work out what is a reasonable price by finding out what other sellers are charging for similar goods.