Yup, perfectly legal - it's called doing business, and it's why I work on my own cars. 10 years ago I thought changing my air filter was 'working on the car'. Now, after having built my own motors, transmissions, and any other sort of mechanical work, I'm able to tackle any task my cars call for. Well, except body work. But that's next.

If I owned a shop, I would discourage carry-in parts (warranty / failure issues), and obviously you have to make some money on the part (as mentioned). Was their mark-up excessive? Probably. Was it legal? Yes. Have I ever paid too much for something only to realize it later? Definitely. Just a few weeks ago I realized that I paid $35 for a $7 bottle of beer. Oops. It was a good beer, but that's beside the point (I was buying a lot of higher-dollar beers, so I didn't think about the total). I roll with it and go on.
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85 GT 2.8/Auto (daily driver)
2 x 86SE 2.8/Auto (parts cars)
79Z28 / 94Z28 / 98Z28 / 93 Suburban
1 wife who thinks I'm nuts...
[This message has been edited by AKM (edited 09-13-2005).]