Hold or Sell? How Changing Consumer Behavior is Impacting Auto Shops

Aug. 31, 2023
Sponsored by ETE REMAN

The past two years have thrown a wrench in multiple industries, requiring a change of viewpoint and skillset. The automotive industry was not able to escape these changes. With new car costs rising, more people are hanging on to their older cars and reconditioning them for continued use or resale.  

Even with changes in the economy, the demand for cars is still rising. Between supply chain issues and a shortage of parts, the supply cannot meet the demand, causing prices to skyrocket. According to the U.S. Bureau of Labor Statistics, the consumer price index for used cars and trucks jumped 40.5% from January 2021 to January 2022. These climbing prices are two-fold: 1) both incentivize consumers to keep their cars for an extended period to avoid paying the inflated prices or 2) they incentivize consumers to fix up their older cars and sell them at a high profit margin.  

How Auto Shops Can Respond to Changing Consumer Incentives

You may be wondering how you fit into all of this. Let’s visit incentive No. 1 first. With consumers wanting to hang on to their cars for longer, shops are seeing a greater variety of issues requiring repair. A car needing simple repairs now has increased mileage that was unexpected. This falls on the shop to have the extended background knowledge of diagnostics to be sure you are repairing the proper issue, and not putting the older car through unnecessary strain. It’s also good to have this knowledge so your shop is ready to see the influx of older models and aren’t caught off guard when a customer is hoping to get more time out of their vehicle.  

Now, let’s move onto option No. 2. With the price of cars growing, many see this as an opportunity for profit on a rebuilt or remanufactured transmission. These are becoming popular since they lower costs while keeping the car on the road. Both rebuilt and remanufactured transmissions require incredible knowledge of the parts needed and what can be fixed. Does the transmission only require a rebuild to replace the problematic parts or does it need a full remanufacture? This is a question continually asked by consumers and automotive professionals alike to be most cost efficient while maximizing resell value.  

Optimizing Diagnostics Through Automotive Training

Time is money. When repairing a vehicle, the last thing you want is wasted time. The best way for a shop to be most efficient and profitable is through automotive training. Knowing the ins and outs of diagnostics can help your shop get more customers in and out of the door.  

There are a lot of assumptions when it comes to diagnosis of a vehicle. Making sure your employees have the proper training can help avoid these common assumptions and mistakes. For example, the transmission is not always to blame. It could be brake circuit issues, incorrect tire size, programming issues and more. Everyone at your shop should know how to look for these issues before wasting precious time and money on solving a problem that doesn’t exist.  

Continued Learning is Essential

What is the best way to learn these diagnostic tricks? Experience will always be a factor in continued learning. As we see a greater variety of vehicles coming in, a wider array of problems come along with it. Familiarizing yourself with different models and transmission types instead of focusing on one area can really amp up your skillset. The age old saying, “practice makes perfect” still applies in the automotive setting.  

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