I've ran into this problem many times living in the rust belt. I'd make the customer aware that their vehicle is rusty and that things are likely seized and will require extra work in order to complete the job. Some things are known issues here, like lower strut bolts on Ram 1500's and camber bolts on Chevy trucks, and many others.

I've heard of shops billing 0.5 to drill and tap out a broken fastener, as well as adding an extra hour to the estimate to account for dealing with rust, using torches, etc. I'd give them two prices if their vehicle is rusty, one if everything goes smoothly and another if parts are seized and there must be extra time spent to deal with them, that way there are no surprises and they've been informed before the work has started, rather than halfway through a job with a torn apart vehicle and potentially hundreds of dollars added to their bill.

The flat rate times do not account for rust and it's fair to bill a customer to deal with things beyond the scope of normal work. You're using a torch, drill bits, wire wheels, etc as well as shop time to deal with something that usually isn't billed for, just "eaten" by the shop or the tech.

Eric Doty
Technician
Wheeling Tire
Wheeling, West Virginia, USA