The downturned economy has boosted business for the auto repair shop industry, as more customers are opting to pay for more expensive repairs rather than shoulder the cost of buying a brand new car.
People who normally put off normal maintenance are now frequently updating their vehicles, hoping they’ll last longer. Where expensive repairs typically deterred customers in the past (the logic being why not just buy a new car), now they are opting to get the necessary repairs, stretching the miles as far as they can.
This trend has shown in auto repair shop’s profits, both in number and cost of repairs. The average price of a repair order jumped 25% to $390. Ron Pyle, president of the Automotive Service Association, discussed the trend:
“There isn’t any big mystery here; people are opting for something they think is less expensive than a new vehicle and relying more on their older vehicles.”
According to the LA Times, from 1999 to 2007, Americans purchased more than 16 million vehicles annually. In 2011, dealers sold only 12.8 million cars. One survey logged 77% of respondents holding onto their cars at least 50,000 more miles than their previous automobiles. The bottom line? More cars on the road mean more required repairs and maintenance.
There are multiple other factors affecting this. Bad credit makes it difficult to purchase cars. A sluggish job economy raises concerns about being able to afford a new vehicle. A slight decline in gas prices could help boost car sales. But for now, the trend has benefits auto repair shops.
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