Quotes and estimates
What is a quote?
A quote is an offer to provide a service at a fixed price – for example, when a plumber tells you it will cost $950 to install a new water heater.
A quote can be spoken or written. Ideally it should be a clear, written statement of exactly what is to be done and material costs, what it will cost (including the hourly rate of the workers) and how long it will take.
If you accept the quote, you have made a contract and the service provider must do the work for that price. You can only be required to pay more than the quote if you have agreed to additional work after the quote was provided, or if the quote allows for a variation by a specified percentage.
A service provider can charge a fee for preparing a quote, as long as they tell you first. You don’t have to pay a deposit when you accept a quote.
Note: If the quote does not mention GST, you are entitled to assume the quote includes GST. The service provider cannot later add GST to the quote.
What is an estimate?
An estimate (can be verbal or written) is a calculation of what the service provider thinks the work is likely to cost. It indicates the nearest price, or a range of prices expected, based on past experience. It is not a firm offer to do work for the stated price, but it should provide you with a reasonable idea of what the work will cost. If you want a definite price, you should follow up by getting a quote.
Again, a service provider can charge a fee for preparing an estimate, as long as they tell you first.
Misleading quotes and estimates
An estimate or quote might give rise to a claim under the Fair Trading Act if it is false or misleading, see “Protections against misleading or unfair trading” in this chapter.
It is a good idea to shop around and ask for quotes from different businesses. This will give you a good idea of what the average price is for the service you are looking for. Asking for references from former clients or searching reviews online can also help you decide on the service provider. The Consumer Protection website provides good information on quotes and estimates, see “Where to go for more support” at the end of this chapter.
If you have been charged more than your quote, or the cost is much higher than the estimate, or an unreasonable amount has been charged, you can complain to:
- the service provider
- Disputes Tribunal
- Commerce Commission (if there was misleading behaviour).