The New Economics of Auto Repair: Rising Rates, Fewer Cars, Higher Profits [RR 1080]
Thanks to our Partners, NAPA Auto Care and NAPA TRACS
In this episode, Carm Capriotto speaks with Tom Ham about the rising labor rates shaping the automotive repair industry. Drawing from the Labor Rate Tracker tool on the Automotive Management Network, Tom explains how shops across the country are steadily increasing rates, with many approaching the $200 per hour threshold. Geographic trends reveal higher rates in regions like the San Francisco Bay Area and Connecticut, and Tom recommends gradual monthly increases of $1 to $2 to maintain profitability without alarming customers.
They also discuss shifting business realities, including rising repair order values driven by vehicle complexity, higher parts costs, and increased technician compensation, even as car counts may level off. Many shops are also setting vehicle age limits to improve efficiency and reduce liability.
Looking ahead, Tom highlights how artificial intelligence will enhance diagnostics and workflow, supporting the rise of a highly skilled mechanical specialist working alongside AI. The episode offers a forward looking view of an industry evolving through smarter pricing, cultural alignment, and advanced technology.
Timestamps
(00:02:30) Tom Ham discusses the “Labor Rate Tracker” and how shops are breaking through psychological pricing barriers as they approach $200 per hour.
(00:05:00) Geographic Heat Maps: A breakdown of where rates are highest (Bay Area, Connecticut) and lowest (Midwest, South), and the use of heat maps to visualize the data.
(00:08:15) The Incremental Increase Strategy: Tom advises shop owners on how to raise labor rates by small amounts (1–2) to overcome the fear of price adjustments.
(00:10:45) Rates by Shop & Vehicle Type: Analysis of which shops command the highest rates (RVs, Diesels) versus the lowest (Collision, Tire Stores), and vehicle makes (Euro vs. Powersports).
(00:13:30) Drawing the Line on Vehicle Age: A discussion on why shops are increasingly setting age limits (15–20 years) on the vehicles they accept to reduce comebacks and improve reviews.
(00:17:15) The Future of Profitability: Predictions on rising Repair Order (RO) amounts and the shift toward “10k mile oil changes” resulting in fewer annual shop visits.
(00:19:45) Technology Costs & ADAS: Tom shares a story about diagnostic equipment dropping $1,000 in price over 8 years and discusses the polarized adoption of ADAS calibration in shops.
(00:32:00) The “Good News” Segment (Car Thefts): Tom presents data showing a projected 43% drop in vehicle thefts by 2025 due to advanced vehicle technology
Tom Ham, Automotive Management Network. Tom’s previous episodes HERE.
Thanks to our Partners, NAPA Auto Care and NAPA TRACS
Learn more about NAPA Auto Care and the benefits of being part of the NAPA family by visiting https://www.napaonline.com/en/auto-care
NAPA TRACS will move your shop into the SMS fast lane with onsite training and six days a week of support and local representation. Find NAPA TRACS on the Web at http://napatracs.com/
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– Remarkable Results Radio Podcast with Carm Capriotto: Advancing the Aftermarket by Facilitating Wisdom Through Story Telling and Open Discussion. https://remarkableresults.biz/
– Diagnosing the Aftermarket A to Z with Matt Fanslow: From Diagnostics to Metallica and Mental Health, Matt Fanslow is Lifting the Hood on Life. https://mattfanslow.captivate.fm/
– Business by the Numbers with Hunt Demarest: Understand the Numbers of Your Business with CPA Hunt Demarest. https://huntdemarest.captivate.fm/
– The Auto Repair Marketing Podcast with Kim and Brian Walker: Marketing Experts Brian & Kim Walker Work with Shop Owners to Take it to the Next Level. https://autorepairmarketing.captivate.fm/
– The Weekly Blitz with Chris Cotton: Weekly Inspiration with Business Coach Chris Cotton from AutoFix – Auto Shop Coaching. https://chriscotton.captivate.fm/
– Speak Up! Effective Communication with Craig O’Neill: Develop Interpersonal and Professional Communication Skills when Speaking to Audiences of Any Size. https://craigoneill.captivate.fm
About the author, Carm Capriotto, AAP
Carm is the founder and host of the Remarkable Results Radio Podcast and the pioneer of automotive aftermarket podcasts. Carm calls on his years of experience in the aftermarket to bring engaging stories from his guests.
Listen to raw, unfiltered, honest, and sincere stories that include insights, trends, best practices, and expertise. Each interview brings an opportunity to learn one new thing through the stories of personal achievement. Many podcast guests tell their story of transformation from working in their business to working on it.
As host of over 1,000 episodes, Carm uses his enthusiasm and passion for the aftermarket especially the service sector to take his listeners on a journey showcasing successful service professionals’ paths to Remarkable Results. He also enjoys interviews with aftermarket industry thought leaders who bring their industry perspectives to his listener.
Follow the podcast on your favorite podcast listening app and always listen to learn just one thing!