Here’s How Inflation Is Affecting Auto Repair Shops (and What Shops Can Do About It)

Right now, every business in America is dealing with inflation—auto repair shops included. 

During the 12-month period ending in June 2022, a 9.1% increase was recorded in the Consumer Price Index for All Urban Consumers—the most significant yearly increase since the 12 months ending in November 1981. Meanwhile, prices for motor vehicle parts and equipment soared by 14.9% in the same period.

Between inflation rates, trouble finding parts, and labor shortages, it can feel all but impossible for your independent auto shop to continue operating these days. But you can still run a profitable business despite these economic issues—you’ll just need to have a strategy in place to deal with them. 

Here, you’ll find valuable advice on how your shop can fight back against the effects of inflation.

5 Ways Auto Repair Shops Can Combat Inflation

1. Make the Most Of Increased Demand

While inflation has undoubtedly affected costs for car parts and equipment, it has also impacted the prices of new and used cars. Since automobile prices are rising, people are more willing than usual to avoid car shopping by investing in their current vehicles. It’s why the automotive aftermarket industry typically has an inverse relationship to major economic trends. 

If you run an auto repair shop, that means you could have a golden opportunity on your hands. Repair shops can experience increased revenue if they make the most of the downturn.

But while it shouldn’t be hard to find people in need of your services at the moment, you’ll still need to be able to provide these services to as many customers as possible. Focus on taking steps to improve your shop’s efficiency and increase your maximum car count. 

There are countless ways to work towards this goal, but you can start by digitizing your workflow. 

2. Implement a Smart Parts Inventory System

The rising cost of auto parts is one of the biggest inflation-related problems shops face today. Making matters worse, many parts are simply on backover due to increased demand. As a result, you could find yourself waiting longer than you should to complete simple repairs—or even have to turn away would-be customers.

Fortunately, inventory management software can make it easy for your shop to avoid parts shortages. If you choose the right program for this task, you’ll be able to keep an eye on your current inventory with ease. And when you’re at risk of running out of parts, you’ll have a chance to order them before they’re gone and mitigate the impact of stock issues.

3. Treat Your Staff Well

Of course, businesses aren’t alone in feeling the impact of inflation. If anything, individual people—such as your mechanics—have been hit even harder by the state of the world. With that in mind, taking good care of your employees is more critical than ever.

Treating your staff with respect is the right thing to do, and it can also positively affect your shop’s efficiency. Even in the best economic conditions, losing a mechanic can reduce your garage’s maximum workload, and you’ll need to spend time and money training their replacement. 

Some of the ways you can improve staff retention include:

• Competitive pay and benefits
• Up-to-date technology, like DVI
• Effective employee management techniques
• On-the-job training

When you combine that with the current labor market, the expenses associated with increased pay or improved benefits are insignificant compared to what you stand to lose by not offering these perks.

4. Focus on Customer Service

No matter how efficient your shop is, inflation may make price increases inevitable. If that’s the case, you’ll need to lean on customer loyalty to retain clients. It’s essential for your garage to give people meaningful reasons to keep doing business with you.

When you’re trying to enhance the level of customer service you offer, a great place to start is convenience. Clients genuinely appreciate perks like:

• Comfortable waiting rooms
• Text communication
• Up-to-date websites

Making improvements in these areas shouldn’t cost all that much, and your efforts could have a surprisingly significant effect on customer satisfaction. On top of that, it’s wise to provide discounts to mitigate the impact of rising prices and introduce a customer loyalty program if you don’t already have one.

5. Revisit your Pricing

Price transparency is always a best practice for winning customer loyalty—after all, no one likes being hit with hidden fees. Customers are looking for someone they can trust with their vehicle, especially during tough economic times, and being honest about your pricing goes a long way in showing them you’re trustworthy.

Your shop can also consider adding a scaled shop fee or flat shop fee to all repairs. This fee can help cover shop items that you don’t normally bill a customer for like technology, floor mats, or waiting room refreshments like coffee or snacks. 

Optimize Your Repair Shop Operation with AutoVitals

Running an independent auto shop has always been a challenging job. But due to runaway inflation, auto repair shops have had to fight harder than ever to remain successful in recent years. Even so, there are steps you can take to survive and thrive no matter how the national economy is doing.

Are you trying to make your shop as efficient as possible, enhance your parts inventory system, or treat your staff and customers better than ever? These goals have one thing in common: it’s easier to achieve them when you have access to quality auto repair shop software. To see how AutoVitals can help you increase your garage’s efficiency and profitability, set up a demo today!