ARO Pandemic Trends
May 21, 2020—A common trend going on in auto repair shops during the pandemic is a spike in their ARO.
In March, Tekmetric put out The Tekmetric Index to monitor the economic trends during the onset of the coronavirus, and to see how the industry was performing as a whole during the wake of the pandemic. Tekmetric was able to collect data from 500 auto repair shops of varying sizes in the U.S. and Canada, measuring ARO and car count.
At the beginning of March before the pandemic hit, the index found that, on average, car count was at 10 and ARO was $414. After the first week of social distancing, the average car count dropped slightly to 9, but ARO actually increased to $444. At the height of the stay-at-home orders in April, the average monthly car count was slightly lower at 6, but ARO was higher at $470. And in May, as the stay-at-home orders start to expire, on average, daily car count was at 11 and ARO was $449. It seems that the more the stay-at-home-orders are enforced, the less car count, but the higher the ARO.
In fact, other auto repair businesses Ratchet+Wrench spoke with confirmed this correlation. Matt Tortorici of Mr. T’s Automotive in Fairbank, Ala., and Scott Brown of Cardinal Plaza Shell in Springfield, Va., both had an increase in their AROs. Brown said his usual ARO is around $255, but during the coronavirus, it’s now at $297, a slight increase.
For others, ARO took a huge jump. For Mike Turner, owner of Portland Automotive in Portland, Conn., his ARO went from $450 on average to $735 during the pandemic—over a 50 percent increase. Turner says it's because everything has been slowed down so much that they have more time to dedicate to services. Turner says he's now spent more time training his techs on how to do proper inspections, the staff has had more time to spend with customers, and the shop has expanded their digital inspection process.
In May, average ARO ranges between $397 in the Central region, which includes states like Texas that lifted stay-at-home orders April 30; and $630 in the Pacific West, which includes California as their stay-at-home order carries on, with some counties in the state expected to keep the order through most of the summer.