iamthecreaturefromuranus

Two quotes?. First I've heard of that.

As for not cranking the prices up.... I had mine done by Bradford, the people who actually produce much of the insulation used in Oz and who have been in the game over 70yrs.

I got talking to the installers about price and asked them how much it had been pushed up by the grant. The guy leading the team of three installers reckoned that about $500 had gone on the price of every installation. He had been installing ceiling insulation for nine years, so I can only assume he knew what he was talking about.

As I got the $1600 grant, and the installation itself only cost me personally $285, I wasn't that bothered.

Vash the Stampede

Disclaimer: until recently I was working for my mate (providing domestic retro-fit quotes for the rebate) so I have some experience in this area.

No worries, I think you'll find that the cowboys are only screwing themselves in the long run.

Yes, I've spoken to half a dozen people who've been harrassed in this way. This is how you deal with them:

• Ask them if they're going to measure your house (they won't)
  
  
• Ask them if they intend to inspect your current insulation (they won't)
  
  
• Ask them if they are on the government's approved list (they won't be)
  
  
• Ask them if they will be giving you a detailed quote (they won't)
  
  
• Ask them if they know you can't proceed without two quotes (they'll try to fob you off)
  
  
• Tell them you're not interested and shut the door in their faces
  
  
• Report them to the government and the police

That's how I've been advising customers. It has won me a good deal of business.

Vash the Stampede

The "two quotes" rule was introduced in December 2009. It was well publicised. Anyone caught breaking that rule will receive a nice little bill for $1,200.

Bradford are a good brand. Not the biggest player in town, but they are reliable. My mate occasionally buys batts from Bradford if his usual supplier is running late with a delivery.

The guy was clearly exaggerating. Under the $1,600 rebate there might have been a little more room for inflating the price, but $500 is a hell of a lot to add on, so I seriously doubt that figure. You can't just drop five hundred bucks on top of the job and expect to get away with it, for two reasons: (a) the industry is extremely competitive, so someone will inevitably undercut you and (b) every customer wants his job to come under the rebate price, so artificial price inflation only drives away good business.

Let's do some maths, using the most recent rebate figure of $1,200.

My mate is one of the cheapest guys in town. He will supply and fit a 100 square metre house at $12.40 per square metre. This comes to exactly $1,240 which is $40 over the rebate. If he tried to inflate the price by $500 it would shoot up to $1,740. This is way too far over the rebate and extremely uncompetitive. Nobody in their right mind would accept such a quote; they'd just find someone else who'd do it for <1,200.

The only way to exploit the rebate is to aim for tiny units and duplexes in the 65-80sqm range. For example, a 70sqm unit would normally be insulated at ~$12.80 per sqm for a final figure of $896. Notice that even this figure is only $304 under the rebate threshold, so already the idea of whacking on another $500 is utterly ridiculous.

But there are two ways in which you can push up the price without going over the $1,200 rebate:

• Raise your price from $12.80 per sqm to $17 per sqm for a total price of $1,190
  Bingo, you're just under the rebate and you've gouged an extra $300! However, this trick only works if your pricing is not transparent. Whenever I quote a job, I put all the paperwork on a table in front of the client, including the price sheet. The client can see exactly what we charge for houses of every size, including extras like the flat roof surcharge (these involve a lot more work) and downlight covers (these are mandatory under government legislation) so they know it's all kosher.
  
  If the client can see your pricelist they will know if you're deliberately overcharging. But if you never show them your prices, they'll remain blissfullly ignorant. Of course, the more astute clients will ask to see your pricing.
  
  
• Throw in some extras
  If the client has halogen lights, they will need downlight covers. In my experience, most people don't have them and aren't aware that they need them. Downlight covers can be purchased for as little as $7, so the dodgy installer will naturally buy them at this price and sell them at $25 each. Presuming that the client has 10 downlights (4 in the kitchen and 6 in the lounge; a fairly common layout for small houses) this gives us $250 for a total sum of $1,146. That's still under the rebate and leaves the client feeling that he's scored some good value freebies.
  
  If the client already has downlight covers, an unscrupulous installer might offer to "replace your old downlight covers with new ones" (which is of course completely unnecessary).

As you can see, there are ways to exploit the rebate - but only in the case of very small properties. If you went around sticking $500 on top of every job you'd be out of business pretty soon.

iamthecreaturefromuranus

I had mine done before the two quote rule existed, which is why I haven't heard about it.

All interesting figures but the reality is that many people paid nothing so didn't care how much installers added to the price. It cost me personally less than $300, so even if I was being gouged, it was for an amount that I wasn't worried about.

Who cares if they are being 'conned' if its not costing you anything anyway?.

NedKelly

Unless you don't pay tax it is costing you.

Vash the Stampede

Very true and that's the way a lot of people see it.

iamthecreaturefromuranus

Well aware of that... but unless it comes directly out of your pocket at the time, that's not how it feels.

ABCDiamond

The problem was that getting two quotes was pointless, when most quotes were under the grant, and the householder paid nothing anyway.
The government paid the installer directly, and the householder had no financial involvement.

If you get two quotes; one for $800 and one for $1600, many people will go for the $1600 one (the better one ? ) if someone else is paying the full tab...

The new scheme puts some financial involvement and responsibility back on the householder. It should have been done this way from day one.

Vash the Stampede

I work in the industry; you don't need to tell me how the scheme works.

Most quotes were not under the grant. I've already shown you that from the figures I quoted. Remember also that it hasn't been $1,600 for a long time. $1,200 was the final figure before the scheme ended. The average size of an Australian house is between 150 & 200 square metres. Good luck getting that insulated for $1,600 - let alone $1,200! My house is only 154 sqm and I've been variously quoted $1,800-$2,200 for insulation. Of course, I will eventually insulate it through my employer, since he'll do it at cost. But this gives you some idea of the prices people are charging. There's no way you can slide comfortably under the rebate unless your house is very small.

In my experience the final price made no difference to people if it was still under the grant. Most people simply tossed a coin or made their decision based on their personal opinion of the salesman who visited them. They did not automatically conclude that the more expensive quote was the "better" one. In cases where both quotes were under the rebate, I still won contracts regardless of whether or not my quote wascheaper than the opposition. In cases where my quote was under the rebate and the opposition quote was over, I always won the contract.

The new scheme favours people who already have enough money to pay for their own insulation and disadvantages the very people who were relying on the scheme in the first place (ie. the regular, everyday folks who don't have a few thousand bucks in their back pocket). It is therefore self-defeating.

The only additional responsibility it places on the householder is a financial one and it gives them even more reason to go for the lowest possible price. This is good news for the bargain basement cowboys because they'll simply regroup and continue to do what they were doing before: providing unrealistically low quotes for work that turns out to be substandard.

I can't see any extra consumer protection in the new scheme, but I do see an awful lot of people missing out because they don't have enough money to pay the full price up front. Perhaps the cowboys will talk to the loan sharks and start offering dodgy finance deals to go with their dodgy insulation.

ABCDiamond

That is a good point. Nothing is easy is it.

Pomster

Mr P was amazed by the number of people who were ineligible (house too new/existing insulation) only to be told someone else had already agreed to do it for them.
He probably turned down more leads than he accepted as he was a stickler for the criteria, but many were not.

I think the govt should have had a central quoting team and then allow people to go to an installer of their choice to do the work. Cuts out all the overquoting/unethical practices.

Peter Garrett should resign. He is the head of the dept and therefore must accept responsibility for the debacle. Bit like the head of a company resigning when they had produced a shonky product.
Don't like Garrett anyway- he has done a complete about turn on his green principles since he joined the government.