Auto Repair 101: Is it a Profitable Business in 2022?

Are you thinking of making a significant investment in the auto repair business this year? Or you’re passionate about cars and have long held a dream to own an auto repair shop but don’t know when to make the leap of faith? If you answered ‘yes’ to both of them, keep on reading because this is for you.

With the car market appearing saturated today, investing in an auto repair shop may not seem like a good idea. Yet with a robust auto repair shop marketing plan, you’ll be able to make your company stand out from the competition and gain the attention of your target market.

Car repair and maintenance services are always in demand. It’s estimated that 76 million vehicles will be more than 16 years old by 2022. It’s also expected that most owners of these aging vehicles will stick to their old car models and conduct regular service and maintenance to keep them in good condition.

Therefore, there will still be a need for more auto repair shops to offer the following services:

  • Regular maintenance services like oil changes;
  • Wheel alignment and balancing;
  • Engine tune-up, which includes services like tests, checks, diagnosis, and changing filters;
  • Body work repair;
  • Selling services parts; and the like.

Most auto repair shops provide one-stop-shop services and charge hourly rates for every service rendered. A repair bill can go between USD$70 to USD $150/hour, depending on a customer’s needs. Worry not for you can even charge more; like any other business, your services must be priced correctly to reap better profit margins and improved compensation for your workers.

auto repair shop
Image credit: Pexels

How Auto Repair Shops Make Money

The average profit of an auto repair shop depends on the size of the business. A large-sized auto repair shop can fetch up to USD$150,000 of earnings depending on the location. Further, technicians can earn between USD$30,000 and USD$50,000 yearly.

While different stores incur different expenditures, you’ll need approximately USD$20,000 per month to run a successful auto repair shop. You’ll mainly use this money to take care of common costs in auto repair shops such as:

  • Business license which ranges between USD$50 and USD$100;
  • Automotive Service Excellence (ASE) Certifications include a USD$36
  • registration fee and USD$39 for certification;
  • Insurance of USD$4,000 every year;
  • Vehicle repair equipment care and upkeep;
  • Shop rental fees range between USD$1,500 and USD$15,000 each month, depending on the chosen location; and the like.

It’s prudent to expect a respectable profit margin from selling parts, while professional services and labor can give you a much higher return. Expect to see returns as there are drivers that seek regular vehicle maintenance to prolong their cars’ lives.

As a golden rule, have a financial expert on board your team to help you manage funds and allocate resources effectively and efficiently to ensure maximum profit.

How To Make Your Auto Repair Shop Profitable This 2022

Want to know how to maximize your car repair business’ possible income? Try out the following tips below:

1. Set Up Online Reviews

Get your current clients that are happy with the service you provide to review your business on your different digital marketing platforms positively. Reviews increase your company’s legitimacy and help it win the approval of prospective clients

2. Launch A Referral Rewards Program

It pays to encourage positive word of mouth from your satisfied customers. This helps to spread the news about your business to potential customers. To make this a success, you might want to give patrons some incentive for every referral they bring to your doorstep. The reward could be as simple as a free oil change to discounts on their repair bills.

3. Connect And Work With Other Businesses

Even though you can succeed as an independent entrepreneur, collaborating with other businesses leads to more achievements. Consider teaming up with other firms like car dealers and automotive stores selling different vehicle parts.

For instance, if you’re working on an old vehicle that needs new parts, you can refer them to your partner automotive store. Similarly, if the client is considering buying a new vehicle, referring them to a trustworthy dealership improves their positive perception of you and your team. Plus, it helps you build a strong working network with other players in the industry.

4. Automate Customer Vehicle Maintenance Reminders

Reminding your patrons about their respective vehicle maintenance schedules is key to business growth.

With a lot going on in their lives, it’s easy for your clients to forget things like vehicle maintenance. But automated reminders can push them to do it.

Consider sending over personalized email or text messages a few days prior, reminding them of your availability to offer them services.

Final Word

Analysts believe that auto repair shops are still and will remain relevant and profitable in 2022 and beyond. Even electric car owners need to visit auto shops to replace or fix their car batteries.

To succeed in the car repair industry, you must gain a reputation for outstanding and reliable services. Keep abreast of the latest trends and technology in vehicle repair on automotive news sites and dedicated blogs. Don’t skimp on marketing for you to be able to reach clients that are keen to work with you and avail of your service offerings.

Jasper has been an enthusiast of the automotive and IT industries since the age of 16. He independently writes on the auto industry's recent happenings.