How did auto repair shops do from a sales perspective in 2021? What is the standard labor rate for auto repair shops? What about the size of their average repair order?
If you have questions about the financial profiles of auto repair shops, we have answers! AutoLeap’s 2022 State of the Auto Repair Industry Report covered these popular industry topics and much more.
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Nearly 300 North American shop owners and managers completed an independent survey for this report, answering questions on:
Here is what we found on the financial profiles of auto repair shops.
Standard labor rates of auto repair shops
AutoLeap’s survey findings confirm a troubling theme: labor rates across the industry are far too low.
The average of standard labor rates among survey respondents was $120, with a median labor rate of $100. Just 24% of respondents have a labor rate above $125.
These numbers put significant industry issues like the technician shortage into perspective. But survey results on this topic weren’t all bad.
Labor rates are rising, with 70% of respondents increasing their labor rate in the past two years. Overall, the median labor rate increased by 10%.
Average repair order size of auto repair shops
We see the labor rates are quite low across many auto repair shops. But what about the average RO size?
AutoLeap found that the average repair order size in North America is $500. Depending on the shop type, that number fluctuates. Here are the three types of auto repair shops and their average ROs:
- Independent repair shops: $464
- Franchise repair shops: $355
- Specialty repair shops: $911
2021 sales figures of auto repair shops
In terms of annual sales figures for 2021, many auto repair shops struggled to gain traction.
Our report found that 53% of surveyed shops generated $500,000 or less in 2021 revenue. 72% of surveyed shops fell below $1 million in generated revenue.
Just 13% of auto repair shops surveyed for our report generated $2 million or more in 2021 sales.
What the experts say
- On low labor rates: “It’s amazing to me that half of the shops out there are charging less than $100/hour. We need to get our labor rates up.” – Cecil Bullard, CEO at The Institute for Business Excellence
- On the need for industry change: “I think this labor rate is way too low. As an industry, we don’t value our time enough.” – Jeremy O’Neal, President, National Trainer & Spokesperson at Advisorfix.com
- On shop sales: “The big thing that surprises me is the annual sales for 2021. It used to be that the top 5% of shops were doing a million plus in sales. Now we are looking at 28% of shops doing a million plus.” – Chris Cotton, Owner of AutoFix Auto Shop Coaching
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