Five ways repair shops can address the rising costs of car ownership

The financial burden of owning a vehicle has kept pace with the rising cost of living, which is to say neither is easily affordable for many Americans. As a result, many automotive repair shops are caught in the crossfire as service writers must strike a balance between empathizing with customers and relying on their patronage to fulfill their own financial obligations. Future success requires finding a middle ground.

Ownership costs are increasing

AAA calculates the average cost of owning a new vehicle at $773.50 per month, or $9,282 annually. According to the Environmental Protection Agency (EPA), the cost of ownership typically includes one or more of the following expenses:

• Lease or loan payment
• Fuel
• Parking
• Registration
• Car insurance
• Routine maintenance

Bankrate reports that drivers should budget an additional $557 monthly in ownership costs in addition to their lease or loan payments. Though RepairPal estimates that on average, most vehicles visit the repair shop for major unscheduled repairs once every two years, modern technological advancements have driven up the cost of even minor repairs.

It’s easy to see that a triple-whammy of monthly lease or loan payments, regular maintenance costs, and an unexpected repair bill can blow any watertight budget to smithereens. And forced to choose between the potential of defaulting on a car loan or eking out a few more miles from a limping vehicle, customers often choose the latter. Contending with car troubles typically trumps not having a vehicle and the financial ramifications that come with missing work, or even worse, repossession.

Want to lessen that financial sting and build stronger customer loyalty? Try these recommendations.

1. Partner with local rental car companies

We rely on our vehicles for numerous daily tasks, a dependence that often reveals itself fully when that mode of transportation is no longer reliable or available. Consider partnering with nearby rental car companies to anticipate and fulfill a customer need by seamlessly swapping out a primary vehicle for a rental car.

Directing customers to a rental company removes one of the barriers to agreeing to repairs. Renting a car can cost from $30 to upwards of $100 per day, which quickly adds up for extensive repair jobs that span a week or more. Shops that can reduce that cost upfront while still netting the repair job extend customers a welcome gesture that also builds trust. Barter with a local rental car provider, offering an exclusive relationship for a discounted rate and mitigate some of the pain of the rental cost you pass on to customers.

2. Offer a convenient after-hours drop-off

Flexible drop-off hours offer customers a valuable service, often converting potential customers directly into scheduled vehicle repairs. The beauty of after-hours drop-offs is that it has no impact on your normal business hours and staff schedules but opens the door to additional revenue without any corresponding overhead.

3. Present customers with multiple options based on budget

Presenting multiple repair cost options for your customers builds trust and cultivates loyalty. Customers can make decisions based on their priorities and feel more in control of the repair process. Sourcing parts from multiple vendors can also reduce shop costs and increase profit margins.

4. Absorb diagnostic fees in the final repair bill

Most repair issues in an auto repair facility stem from customers noticing an issue with their vehicles requiring diagnosis. Savvy shop owners who charge a diagnostic fee can offer to waive the charge from the final repair bill to provide customers with an immediate incentive to authorize the corresponding repair. Putting this practice into play capitalizes on the differential between the shop’s hourly labor rate and the technician’s.

5. Offer scheduled service packages

Maintaining a full shop schedule helps optimize overhead costs and maximize profits. Shop owners can encourage service writers to schedule basic auto repair services on slower days to keep technicians busy and increase throughput for the day. Given the shop’s workload for the week, service writers should also consider “surge pricing” during predictably busy times, and proportionately lower rates adjusted for similarly predictable scheduling gaps.

Implement these techniques in your shop

Multiple changes in a short period can throw your auto repair shop into chaos, but selecting one or two viable options from the list above can help your business achieve greater success and customer loyalty. When you implement one or more of these suggestions, be sure to systematically request feedback from customers and employees to identify and address any hiccups and—just as importantly—celebrate the wins. You might be surprised to find that, beyond responding to the current steep costs of living, these tactics set your auto repair shop apart from the competition.