Actually when I spoke to the service manager, he said the same thing, if its covered by warranty the dealer doesn't spend money and the mechanics get paid anyway (meaning there's no benefit on them for charging me). But that this time it was because of the way I drive (wear), so it wasn't covered and they were gonna help me out with a discount.
I already approved the budget as I couldn't get better with other dealer but its a good idea to get a detailed written report on how they determined it.
About the rent, did you get the rent for free? I have a service contract which I paid additionally. And it says that my the car is more than 8 hours getting fixed or if its because the parts were ordered, I get a free rent car from the dealer (just for max 3 days), but they say I could only get it if it was on warranty which I am still fighting as I havenīt found that on my contract!