The Average Respondent
WHAT THE 2025 FACE OF THE INDUSTRY LOOKS LIKE
The average respondent of the 2025 Ratchet+Wrench Industry Survey is a male auto repair shop owner in his 50s living in the Northeast. He began his ownership journey in his 30s and has accumulated over three decades of industry experience. Before owning a shop, he worked as a technician. He runs a single-location business and does not come from a family background in the auto care industry.
BREAKING IT DOWN
POSITION
GENDER
AGE
AGE OF SHOP OWNERSHIP
The Average Respondent
IN THE INDUSTRY
EDUCATIONAL BACKGROUND
BUSINESS ACQUISITION
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The Average Shop
INSIGHT INTO THE AVERAGE MECHANICAL REPAIR SHOP
Independent shops and multi-store operators with an annual revenue between $1,000,000 and $2,499,999 million represent 50% of the average shops.
BY
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MARIO FIMBREZ, VALLEY OAK DESIGN
Average Shop Setup
INSIGHTS INTO THE INNER WORKINGS OF A TYPICAL SHOP
The majority of respondents reported working in or owning shops of 2,000-9,999 square feet with five to eight team members. The average number of lifts within these shops was five to eight.
SHOP SIZE (in square feet)
NUMBER OF BAYS
Light vehicle growth in 2024 is expected to be at a robust 5.9% , with the total light, medium and heavy duty automotive aftermarket now expected to be a $617.3 billion industry in 2027
Location, Location
A LOOK AT HOW SHOPS ARE PERFORMING BY GEOGRAPHIC REGION
A breakdown of how shops are collectively performing in terms of annual revenue, average repair order, and car count across four geographic regions.
(IA, IL, IN, KS, KY, MI, MN, MO, ND, NE, OH, SD, WI)
(CT, DC, DE, MA, MD, ME, NH, NJ, NY, PA, RI, VA, VT, WV)
(AK, AZ, CA, CO, HI, ID, MT, NV, NM, OR, UT, WA, WY) Annual Revenue over $1 million: 60%
(AL, AR, FL, GA, LA, MS, NC, OK, SC, TN, TX)
Revenue over $1 million: 72%
Repair Order Above $400: 65% Car count above 300: 27%
Female-Owned Shops
A LOOK AT THE INDUSTRY FOOTPRINT OF WOMEN
The average female shop owner in the 2025 Ratchet+Wrench Industry Survey is between 50 and 59 years old and started her ownership journey in her 30s—with half of respondents starting their shops independently. She has around two decades of industry experience, likely including roles as an administrative staff member or manager. Nearly 90% are independent repair shop owners with an additional 10% running other shops such as EV-specific repair and maintenance. Over 60% of their shops are between 5,000 and 9,999 square feet with 5 bays and above, and the same number of lifts. They employ more than 5 team members.
Revenue above $1 million
Average repair order above $400
Car count above 250
Opportunity above $800
Closing ratio of 70% or higher
CSI score of 90% or higher
Posted labor rate above $140
Raised labor rate in past 2 years
Works with a consultant or business coach
Attends industry-specific management training at least quarterly
Sends staff to industry training at least quarterly
BACKGROUND
The automotive industry employs the second lowest percentage of women of any occupation, just 2.2 percent. This disparity exists despite women representing a significant proportion of both car buyers and automotive repair clients.
(Bureau of Labor and Statistics)
KPI REPORT
K I P 2025
Importance of Tracking KPIs
KNOWING YOUR NUMBERS PAYS OFF
Tracking metrics makes the difference. Shops that didn’t keep track of their Key Performance Indicators fell behind those that did in 12 out of 12 major metrics. The chances of reaching $1 million in revenue were twice as high for shops that tracked KPIs compared to those that didn’t. Learning to monitor KPIs helps shop owners understand how their business is performing or underperforming.
Shops that DO track KPIs Shops that DON’T track KPIs
Importance of Tracking KPIs
A LOOK AT THE AVERAGE REPAIR SHOP’S FINANCES
What do auto repair shop revenue and profitability look like in 2025?
ANNUAL REVENUE
OVERALL GROSS PROFIT MARGIN
BY
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JOSE CABALLERO
Making the Sale
A LOOK AT THE AVERAGE CAR COUNT, ARO, OPPORTUNITY, AND CLOSING RATIO
For more than half of auto repair shops, the average repair order is above $600. On the same token, less than a one-fifth of shop owners report a vehicle opportunity of $1,500 or more.
MONTHLY CAR COUNT
AVERAGE OPPORTUNITY* PER VEHICLE
*average
Average daily car count per bay is 2.2 vehicles.
Increasing your ARO through a customercentric approach
According to industry experts, creating a customercentric environment by actively listening, communicating clearly, and providing helpful interactions sets shops up as trusted advisors. Those that prioritize exceptional customer experiences through effective strategies, staff training, and modern communication tools tend to achieve higher sales values.
Car Count’s Impact on Sales
DOES A HIGHER CAR COUNT EQUAL MORE SALES?
Shops with higher monthly car counts have overall higher net profit margins, yet they find less opportunities than shops with lower monthly car counts.
CAR COUNT OVER 300
ARO over $600: 53%
Opportunities found above $1,000: 37%
Closing ratio of 90% or higher: 16%
Overall profit margin above 15%: 58%
COUNT LESS THAN 50
ARO over $600: 52%
Opportunities found above $1,000: 52%
Closing ratio of 90% or higher: 5%
Overall profit margin above 15%: 42%
BY ANNETTE SUNDBERG
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Artificial Intelligence Tools (Tech Report)
Artificial intelligence is becoming more prominent in the auto repair industry. A growing number of vendors offer different tools that use AI to maximize different areas of the automotive aftermarket business. AI scheduling tools are the most used, with 52% of respondents stating that they use AI applications in their scheduling process.
IN WHICH AREAS CAN ARTIFICIAL INTELLIGENCE TOOLS BE USEFUL IN YOUR SHOP?
(choose as many as applicable)
AI scheduling software: 52%
AI estimate generator: 61%
AI digital vehicle inspection: 59%
AI customer service representative: 37%
PHOTO BY PATRICK DURHAM
Getting Paid Properly
THE IMPACT OF RAISING YOUR LABOR RATE
One of the most contentious KPIs is the labor rate. While many shop owners recognize the need to increase their labor rates to keep pace with rising costs, employee compensation, and advancements in vehicle technology, implementing these increases remains challenging. Data from this year’s survey revealed that 85% of shops raised their labor rates within the last two years, with 59% reporting rates above $140. On the other side of the spectrum, only 18% of shops maintain a labor rate below $110.
POSTED LABOR RATE BY REGION:
MIDWEST
SOUTH
NORTHEAST WEST
85% of Shops have raised their labor rate since 2024.
Technician Stats
A LOOK AT TODAY’S TECHNICIANS
Efficient shops are profitable shops. As reported by survey respondents, 30% of auto repair shops hit an efficiency between 80% to 100%, and 38% hit productivity in the same range. Technicians are most efficient on those jobs that take less than 2.5 hours, where the percentage of 120% efficiency or above rises to 27%.
110–119%
120% or more
Does
The
US
Bureau of
Labor Statistics projects 2.8% growth in employment for automotive technicians from 2021-2031
BY
LEADERSHIP REPORT
The Typical Leader
A LOOK AT THE 2025 OWNER
The landscape of the auto care sector ownership is evolving. Research findings suggest that owners are focusing more on their business versus being involved in the business. Offsite ownership is more prevalent, and prioritizing personal time, reducing their hands-on mechanical involvement, and adhering to conventional work schedules is becoming the norm. When it comes to connecting with their team members individually, a little more than half made time to hold one-on-ones.
AVERAGE HOURS OF WORK PER WEEK
SCHEDULED CHECK-INS WITH EMPLOYEES
PLANS TO EXPAND FACILITY
LEADERSHIP STYLES
“A culture is strong when people work with each other, for each other. A culture is weak when people work against each other, for themselves.” - Simon Sinek
Every leader has a definitive style. Here’s what respondents reported as their method of leading.
Direct involvement: 36%
“I get dirty on the shop floor and lead by example”
Visionary: 15%
“I focus on the big picture and inspire my team to succeed”
Democratic: 23%
“I encourage my staff’s input in decision-making”
Hands-Off: 24%
“I trust my team with key decisions and am not afraid to delegate”
Authoritarian: 2%
“It’s my way or it doesn’t get done”
Employee Benefits
STAND OUT TO POTENTIAL EMPLOYEES
At a time when there’s an industry wide technician shortage, retention has become fundamental to success. Retaining your valuable team members starts by providing comprehensive benefits that not only incentivize their work but also offer them genuine peace of mind. Here are the most common benefits shop owners reported to offer:
POPULAR EMPLOYEE BENEFITS
CREATIVE COMPENSATION
Small- and medium-sized shops sometimes can’t match the attractive benefits packages that larger shops or franchises offer. To level the playing field, survey respondents reported offering these perks:
• Parts at cost
• Trade show trips
• Quarterly sales bonus
• Accident insurance
• Evening and weekend access to work on personal vehicles (with permission)
• Vacation allowance
• Floating holidays
• Meals
BY
PHOTO
GRACE HUDSON
Team Structure Trends
COMMON WAYS THAT LEADERS SET UP EMPLOYEES
Here’s a breakdown of how independent repair shop owners structure and pay their teams.
HOW DO YOU PAY YOUR TECHNICIANS?
FLAT RATE
One tech per vehicle is the most common way shops use their team members in the bays.
Team Structure Trends
TECH TENURE APPRENTICESHIPS
One of the best indicators of a healthy business is the length of time your team members have had within the shop.
Creating apprenticeship programs is an emerging method that the industry is utilizing to bridge the talent gap. While only 25% of respondents acknowledge having such programs, it’s well-known that smaller shops often lack both the financial resources and knowledge base necessary to implement and sustain these initiatives.
MOST IMPORTANT TRAITS FOR A TECHNICIAN
When asked about what they looked for in a technician, shop owners preferred a willingness to learn and technical skills above all else.
Higher Accountability
ENLISTING COACHES TO IMPROVE KPI AND LEADERSHIP
The value of business owners receiving coaching and networking with their peers cannot be overstated. Coaching provides accountability, guidance, and an opportunity for shop owners to get help navigating the challenges of business ownership. Together, coaching and networking help auto repair shop owners stay competitive, adapt to industry changes, and achieve success. The question for many owners remains when to hire the services of a coach, and how to choose one over another.
YOU WORK WITH A BUSINESS COACH?
TECH+TOOLS TECH TOOLS
Budgeting for Tech, Tools, and Equipment
A LOOK AT HOW MUCH AND WHERE SHOP OWNERS ARE INVESTING THEIR MONEY
While 22% of auto repair shop owners in the 2025 Ratchet+Wrench Industry Survey said they designated a modest 6% to 10% of their budget for tools, tech, and equipment, a nearly identical number of shop owners don’t budget at all. On the flip side, when it comes to equipping their techs with tools, 9 in 10 shop owners picked up the tab.
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Continuing Education
IN ORDER TO KEEP UP WITH A CHANGING INDUSTY, CONTINUAL EDUCATION IS KEY
To help technicians improve their skills, 60% of shop owners leaned on training provided by industry associations to help improve their teams. In terms of training frequency, more than two-thirds of owners have their techs trained at least once per year.
TYPE OF TRAINING FOR WHICH SHOP PAYS
FREQUENCY OF TECHNICIAN TRAINING
TYPE OF TRAINING RESPONDENT AND/OR TEAM ATTEND
FREQUENCY OF OWNER TRAINING
ADAPTING TRAINING TO A NEW TYPE OF VEHICLE
Modern vehicles are more technologically advanced than ever, requiring specialized knowledge in areas such as electric vehicles, advanced diagnostics, and computer-based systems. Many technicians who received training on traditional combustion engines often lack the necessary skills for newer models. Public institutions are leading the way in terms of training, especially on the EV side. According to the World Resources Institute, among the 196 colleges or universities across Georgia, Michigan, Nevada, North Carolina and Tennessee that offer EV-specific training or have existing programs adaptable for future EV-specific training (referred to as potential EV programs), public institutions represent the vast majority at 88% (172 schools). Of these public institutions, two-year community or technical colleges make up 75% (129 schools).
(Source: World Resources Institute)
Technology as a Business Tool
USING SOFTWARE IS AN EFFICIENT WAY TO STREAMLINE BUSINESS
Technology continues to rapidly advance, especially AI in auto repair shop applications, and many auto shop owners have proven that they’re up-tospeed on technology that helps run their shop efficiently and effectively.
Scan Tools
IN ORDER TO DIAGNOSE VEHICLES, THESE PIECES OF EQUIPMENT ARE KEY
Access to the right tools and information is mission-critical for vehicle repair. According to the 2025 Ratchet+Wrench Industry Survey, 95% of repair shops subscribe to an OEM repair information service, and 89% have access to OEM repair information. Additionally, more than two-thirds of auto repair shops prefer using aftermarket scan tools.
OEM Access
Where shops are finding crucial repair information
Marketing to Consumers
Automotive repair facilities each employ their own unique marketing strategies. The Ratchet+Wrench Industry Survey reveals that 36% of shop owners prefer partnering with external marketing consultants for their promotional efforts. When it comes to social media presence, Facebook remains the dominant platform of choice, though Instagram continues to gain significant traction among repair businesses.
LAST WEBSITE UPDATE
SOCIAL MEDIA USE FREQUENCY
PREFERRED SOCIAL MEDIA PLATFORMS
HOW MARKETING IS MANAGED
MARKETING AND REVENUE
81% of shops that hired the services of a marketing agency along with their own efforts had revenue of over $1 Million
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Looking Ahead
Over the next five years, most shop owners said their annual sales trend upward and they expect them to continue in that direction with 77% reporting they’ll focus on EVs and/or ADAS work.
HOW HAVE YOUR
TOTAL ANNUAL SALES TRENDED DURING THE LAST FIVE
YEARS?
HOW DO YOU EXPECT YOUR SALES TO TREND DURING THE NEXT FIVE YEARS?
DO YOU HAVE PLANS TO EXPAND YOUR FACILITY OR ADD LOCATIONS IN THE NEAR FUTURE?
WHAT IS YOUR FIVE-YEAR INVESTMENT FOCUS?
POTENTIAL NEW PROFIT CENTERS
IS YOUR SHOP EQUIPPED FOR ADAS WORK?
While battery electric vehicles (BEVs) currently make up just 4.5% of the vehicles serviced, and hybrids account for 7.2% , the demand for maintenance and repair on these vehicles is rising. In fact, 93% of shops report an increase in BEVs coming in for service over the past two years, while 92% have seen a rise in hybrid repairs. More than half (57%) of shops now actively market their ability to service electric and hybrid vehicles, recognizing the opportunity to compete with new car dealers for their share of the business. Source: IMR
Primary Concerns
Technician shortage continues to be the primary concern for much of the industry, while slightly less than 20% of respondents showed their concern for a rise in the cost of doing business. The tariffs announced in March and April of 2025 will contribute to that rise in costs.
PRIMARY CONCERNS
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Parts Sourcing
Auto Repair shops continue to increase the use of a parts matrix in order to maximize their margins on parts sales. According to the respondents of the 2025 Ratchet+Wrench Industry Survey, 46% of shop owners had a gross profit margin on parts of over 50%.
WHAT IS YOUR GROSS PROFIT MARGIN ON PARTS SALES?
HOW MANY PARTS VENDORS DOES YOUR BUSINESS USE?
The tariffs announced in March and April for the automotive industry have created a scenario of uncertainty. According to the 2025 Ratchet+Wrench Industry Survey, 70% of respondents expect an increase in their parts costs.
DO YOU EXPECT NEWLY IMPOSED TARIFFS ON IMPORTED COMPONENTS TO INCREASE YOUR COSTS?