Guide to Credit Card Processing for your Auto Repair Shop

Costs for credit card processing can add up. But with many customers using credit cards to pay for auto repair invoices, your shop needs a plan in place. 

Understanding both the pros and cons of credit card processing will help your shop manage its finances more effectively. 

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But first..

It’s important to know what you need before your shop supports credit card processing for auto repair.

Here is a complete list:

A credit card machine (aka ‘reader’ or ‘terminal’)

This machine is what you used to swipe the customer’s card and register their payments. As a modern business, you will need a machine with functionality that includes:

A merchant account

This type of bank account serves as a holding place once a credit card is used for payment. This hold occurs until the transaction is verified. Once the transaction is complete, it will transfer into your shop’s bank account. 

Make sure to connect with the appointed accounts manager at your bank if you have any questions about this process. They can help ensure this process runs efficiently so your shop receives credit card payments. 


Why use credit cards for auto repair shops?

People prefer to pay later

Car repair costs add up. If the shop needs to replace an alternator or timing belt, the bill may come out to more than a customer can afford. 

For this reason, many customers are happier to spend money that won’t immediately come out of their savings accounts. This is what credit cards for auto repair offer.

Certain credit cards also offer other benefits to customers, like reward points they can use for travel. As a financial tool, credit cards also offer the ability to build your credit score. 

As helpful as your customers find credit cards for auto repair, you benefit too! Let’s explore exactly how.

Builds credibility

When other businesses offer this common payment method and you don’t, it’s bad for business. Credit cards for auto repair offer an efficient and safe way for customers to make payments. If a customer sees you don’t accept credit cards, they may choose to look elsewhere. 

Beyond convenience, credit card acceptance shows your business is trustworthy and legitimate! When a customer sees your modern credit card machine, they will appreciate the extra lengths you went to ensure their financial info is safe and secure. 

The only downside..

The main downside to accepting credit card payments is the 3.5% or more that apply in transaction fees. So when you process $500 in payment for a customer’s engine work, your shop only receives $482.50. 

This can add up and take a sizable chunk out of your profit. For example, if you apply that 3.5% transaction fee to 100 repairs that cost $500, you lose $1,750. 

Not great for business! But the good thing is, you can always offer a surcharge.

What is a surcharge program?

All you’re doing here is putting the transaction cost on the customer. This only applies if they choose to pay with a credit card.

Ultimately the choice is theirs to make, without you compromising your profits. 

Another great thing about surcharge fees is you can still keep your prices competitive. Instead of increasing your prices to maintain profits, you can maintain affordable repair costs to draw in more customers.

What you need to know about surcharge

You have to ensure your shop complies with the rules of major credit card brands (such as Visa, Mastercard, etc). 

To achieve compliance, follow these steps:

Final note

And there you have it. All you need to know about credit cards for auto repair. All in all, it is a worthwhile option to accept as a payment solution in your shop.

Frequently asked questions

Processing fees for credit cards typically come to 3.5%. While your auto repair shop can charge up to 4%, it’s advisable you don’t charge more than that. 

Absolutely! This processing charge is called a surcharge fee. 

With a surcharge program, you can place the processing fee on the customers in your auto repair shop.  

As an auto repair business, you can refuse a credit card payment if it doesn’t meet your requirements. One example is if you don’t accept that type of credit card. 

Auto Repair Shop Management Software

AutoLeap is a powerful all-in-one auto repair shop software that helps to keep complete track of your business – from scheduling appointments to managing technicians and generating invoices.

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