Average Auto Repair Labor Rates by U.S. State

Compare your shop's performance against real data from thousands of auto repair shops by state.

Benchmarking data is only useful when it changes what you do next.

If you've run your shop's numbers through the Tekmetric Shop Index and seen where you rank on ARO, car count, parts margin, and effective labor rate — good. You have a diagnosis. Now you need a plan.

This post walks through what each gap in your TSI results is actually signaling, which operational levers move the needle on each one, and how to build a focused 90-day improvement target that gives your team something concrete to work toward.

Start With the Biggest Gap

Your TSI results will show you four rankings. Resist the temptation to try to improve all four at once. The shops that make the most progress pick the metric with the largest gap and stay focused on it for a full quarter before adding another priority.

Trying to improve ARO, car count, parts margin, and effective labor rate simultaneously often means improving none of them because the operational changes required for each are different and can compete for your team's attention.

So step one is simple: look at your four rankings, find the biggest gap from the industry benchmark, and start there.

Gap: ARO Below Benchmark

If your average repair order is lagging, the most common root cause is inspection performance. Either digital vehicle inspections (DVIs) aren't being completed consistently, or they're being completed but not converted into approved work.

A few questions to answer before you act:

• What percentage of repair orders have a completed DVI attached?
• Of the DVIs sent to customers, what percentage include photos or video?
• What's your close ratio on recommended work?

If DVI completion is below 90%, that's almost always the first lever. Tekmetric's Inspection Report shows completion rates by technician, making it straightforward to identify who needs coaching and who's already performing well.

"Now I can look at everybody at a glance. I can be in a different state, different city and know exactly what's going on in each location all the time."  — Leroy Ingram, Ooroo Auto Care, Tekmetric Customer

If DVI completion is strong but close ratio is low, the issue is likely in how inspections are being communicated to customers — photo and video quality, the language in findings, how quickly the estimate follows the inspection.

Shops on Tekmetric also have access to the Parts and Labor Matrix, which protects against underpricing. It can be a quiet ARO killer that doesn't show up until you look at margin data.

➡ See how your ARO compares →

Gap: Car Count Below Benchmark

A car count gap can mean two different things depending on how it breaks down: you're not bringing in enough new customers, or your existing customers aren't returning at the rate they should. Both problems need attention, but they need different solutions.

For new customers, the questions are acquisition-focused. Tekmetric's online booking gives customers a way to find you and schedule an appointment 24/7 — filling bays without your team picking up the phone. The more friction you remove from the booking process, the more new customers follow through.

For returning customers, the questions shift to communication. Are declined jobs being followed up? Are customers receiving service reminders? Tekmetric Marketing automates follow-ups on declined work and scheduled maintenance intervals — so your team stays in contact with your car count without adding manual effort.

"Seven hundred and two dollars in ad spend has generated 11 net-new customers and $12,802 in new customer revenue — an 18.3x return on ad spend before factoring in the lifetime value of those customers returning for future visits."  — Tanner Markham, Phase 2 Automotive, Tekmetric Customer

➡ See how your car count compares →

Gap: Parts Margin Below Benchmark

A parts margin gap is almost always a pricing problem — either your markup isn't keeping up with cost increases, you're applying flat markup where a tiered matrix would protect margin better, or your team is manually overriding prices inconsistently.

The fix starts with reviewing your Parts Matrix in Tekmetric. A well-structured matrix automatically applies the right markup based on part cost ranges, removing the inconsistency that comes from individual pricing decisions at the job level.

After updating the matrix, run your Parts Purchased Report to verify that retail pricing is reflecting the changes accurately. This is also a good time to cross-reference against recent vendor invoices — if costs have moved significantly in the last 6 months, your matrix thresholds may need updating.

➡ See how your parts margin compares →

Gap: Effective Labor Rate Below Benchmark

If your effective labor rate is trailing your posted rate, the most common culprits are inconsistent discounting, flat-rate job structures that cap labor recovery, or package pricing that doesn't account for actual labor time.

Start by pulling your Discount Detail Report to see where and how often discounts are being applied. If they're being applied inconsistently across your team, that's a coaching conversation — and Tekmetric's real-time reporting makes it easy to see which service writers are discounting most frequently.

The Labor Matrix is the structural fix. Similar to the parts matrix, a tiered labor matrix adjusts the billed hours or dollar amount based on configured ranges, protecting margin without changing what customers see on the invoice.

➡ See how your effective labor rate compares →

Building a 90-Day Improvement Target

Once you've identified your primary gap and the lever that addresses it, the last step is turning it into a measurable target for the next 90 days.

A good 90-day target is specific, tied to a leading indicator, and gives your team something to track week over week. For example:

• ARO gap: "Increase DVI completion rate from 72% to 90% over 90 days, tracked weekly via Inspection Report"
• Car count gap: "Launch declined-job follow-up automation within 30 days; track returning car count monthly for 90 days"
• Parts margin gap: "Update Parts Matrix for all parts under $150 within two weeks; track parts margin weekly via Parts Purchased Report"
• Labor rate gap: "Reduce average discount percentage by 15% over 90 days, tracked via Discount Detail Report"

These aren't arbitrary numbers — they're examples of the leading-indicator approach that lets you see progress before the outcome metric moves. Set yours based on where you're actually starting, not where you want to end.

Check Your Rankings Quarterly

Your TSI results are a snapshot. Set a reminder to re-run the benchmarking every quarter so you can see whether your numbers are moving relative to the industry — not just relative to your own history.

The shops that use benchmarking most effectively are the ones that treat it as a recurring discipline, not a one-time exercise.

"Thanks to Tekmetric, we've really enhanced our business and are looking to expand. We're the #1 shop, 6 years in a row in Upstate New York."  — Chris Chevalier, AAA Auto Repair, Tekmetric Customer

➡ Benchmark your shop now →

Takeaways

• Start with your biggest gap — don't try to move all four metrics at once.
• ARO gaps usually trace back to DVI completion rates or close ratios.
• Car count gaps split into acquisition and retention problems — each needs a different fix.
• Parts margin gaps are almost always a pricing matrix issue.
• Effective labor rate gaps often come down to discounting habits and job structure.
• A 90-day leading-indicator target turns benchmarking data into team direction.

➡ Benchmark your shop now →

See how your shop stacks up against thousands of auto repair shops nationwide

You track your ARO. Maybe you watch your car count week over week. You know when a month is good and when it's below par.

But here's a question most shop owners can't answer quickly: Compared to shops like yours, are your numbers strong, average, or quietly underperforming?

There's a real difference between a number that's improving and a number that's competitive. A shop can grow ARO year over year and still be well below what high-performing shops are seeing in their market. Without an external reference point, you don't know which situation you're in.

That's the problem benchmarking solves, and it's the reason the data matters more than the direction.

Internal Tracking Tells You the Trend. Benchmarking Tells You the Truth.

Internal performance tracking is essential. If you don't know your ARO, car count, parts margin, and effective labor rate, you're managing without the most basic tools. But internal tracking has a structural limitation: it can only tell you how you're doing relative to your own history.

That's useful for spotting momentum — a rising ARO, a growing car count, tighter parts margin. What it can't tell you is whether your baseline is strong or weak relative to the market.

A shop with a $580 ARO that has grown from $520 over two years has made real progress. But if top-performing shops in their region are averaging significantly higher, that progress hasn't closed the competitive gap. It's just moved in the right direction.

The fix isn't to stop internal tracking. It's to add an external benchmark so you know what the target actually looks like.

➡ See how your ARO compares →

The Problem With Benchmarking From Anecdotes

Many shop owners get their benchmarks the informal way: conversations with peers at trade shows, numbers shared in coaching groups, or revenue figures posted in forums. These have real value, but they're also limited.

Self-reported numbers skew high (people share their wins). Peer groups are small samples. Industry averages from trade associations are often lagged and lack the granularity you need to compare fairly — a six-bay shop in a suburban market shouldn't be benchmarking against national averages that include dealership-adjacent shops in metro areas.

The more useful comparison is data drawn from shops operating in similar conditions, at similar scale, tracked in a consistent and anonymized way.

What Good Benchmarking Actually Looks Like

Effective benchmarking for an auto repair shop compares you on the four metrics that most directly drive profitability:

• ARO: Are you getting full value from each car that comes through your door?
• Car count: Is your volume where it needs to be to support your revenue goals?
• Parts margin: Are you protecting margin as supplier costs fluctuate?
• Effective labor rate: Is your real revenue per labor hour aligned with your posted rate?

Each of these metrics has a different lever. If your ARO is lagging, the fix usually involves inspection completion rates or customer communication. If your car count is stagnant, the issue is typically acquisition or retention. If your parts margin is eroding, your pricing matrix needs a look. If your effective labor rate is low, it's often a discounting or packaging problem.

Benchmarking tells you which problem to solve first. That's valuable when you have limited time and you're trying to prioritize.

How the Tekmetric Shop Index Works

The Tekmetric Shop Index is a free benchmarking tool built from data collected across more than 12,000 auto repair shops. Enter your shop's metrics and get an instant comparison showing where you stand on each of the four key measures. No Tekmetric account is required. Anyone can use it.

The output isn't a vague grade — it shows you where each metric ranks and gives you a clear picture of where the gap is largest. That's the signal that tells you where to focus first.

➡ Benchmark your shop now →

What to Do After You See Your Rankings

The benchmarking data is the starting point, not the finish line. Once you know which metric is your biggest gap, you can start asking the right questions:

• If ARO is lagging: How consistently are your technicians completing and sending digital vehicle inspections (DVIs)? Are customers seeing and approving the recommended work?
• If car count is flat: Are you actively pursuing new customers? Are return visit intervals optimized? Are declined jobs being followed up?
• If parts margin is soft: When did you last review your parts pricing matrix? Is it adjusting for recent cost increases from your vendors?
• If the effective labor rate is low: Are service writers building jobs accurately? Are discounts being applied consistently or inconsistently?

Each of these questions points toward a workflow, and Tekmetric's reporting is built to surface the answers at the job, technician, and service writer level. But even before you get to that step, knowing which question to ask is most of the work.

➡ Benchmark your shop now →

The Shops Getting This Right

High-performing shops don't treat benchmarking as a one-time exercise. They check their rankings periodically, track how their numbers shift against the industry baseline, and use the comparison to coach their teams with context.

"You're at 85% DVI completion" is a data point. "You're at 85% completion, and top shops are at 95%" is a coaching conversation with direction.

"Seeing them take the shift to Tekmetric and then grow profitability in the same four walls has been phenomenal. Some of them are just exponential."  — Matt Schwab, Clutch Automotive, Tekmetric Customer

Takeaways

• Internal tracking shows you direction; benchmarking shows you position.
• The four metrics — ARO, car count, parts margin, effective labor rate — are the right comparison points.
• Good benchmarking data is consistent, anonymized, and drawn from shops with similar operating profiles.
• The TSI tool is free, built from more than 12,000 shops, and gives you an instant read on where your gaps are largest.
• Your benchmark result tells you which lever to pull first — and that's where the work starts.

Once you know your gaps, the next step is building a system to close them.

➡ Benchmark your shop now →

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The Tekmetric Shop Index allows auto repair shops to benchmark themselves against thousands of Tekmetric shops nationwide

Most shop owners have a feel for how their business is doing. They know the slow weeks, the strong months, and whether the bays stayed full. What they often don't have is a good way to compare those numbers against anyone else.

That gap is where opportunity hides — and it's exactly what the Tekmetric Shop Index is built to close.

The Tekmetric Shop Index is a free benchmarking tool that lets you enter your shop's key metrics and instantly see how you stack up against more than 10,000 auto repair shops nationwide. No Tekmetric account is required. No commitments either. It's just an honest look at where your shop stands on the four numbers that matter most.

Top-performing shops track these metrics religiously — and they know exactly where they stand relative to the industry. Here's what each one means, why it matters, and how your numbers compare.

➡ Try the Tekmetric Shop Index →

1. Average Repair Order (ARO)

ARO is the average dollar amount of each repair order — total revenue divided by the number of cars you serviced. It's one of the most direct measures of how well your shop is selling and completing work.

A low ARO isn't always a bad sign on its own. But if your car count is healthy and your ARO is lagging, you could be leaving approved work on the table, underquoting, or missing opportunities to present needed repairs. A high ARO, on the other hand, means customers are approving more of the work their vehicles need.

ARO is also the metric most directly tied to your digital vehicle inspection process. Shops that complete digital vehicle inspections (DVIs) consistently — and share them with customers — tend to see higher approval rates and stronger AROs.

"I like the ease and the ability to be more transparent with my customers with detailed inspections and photos."  — Verified Tekmetric User, G2

➡ See how your ARO compares →

2. Car Count

Car count measures how many vehicles you service in a given period. It's the volume side of the revenue equation. ARO tells you how much you make per car; car count tells you how many cars you're making it on.

Both numbers matter. You can have a strong ARO and still struggle to grow revenue if car count is stagnant. And you can have a strong car count but a weak ARO if jobs aren't being sold thoroughly. Top shops keep an eye on both.

Car count breaks down further into new customers and returning customers — a distinction that matters when you're trying to understand whether your growth is coming from acquisition or retention.

"Customers can review inspection results, check estimates, and approve repairs with just a click. Everything is integrated, making our workflow way smoother than before."  — Verified Tekmetric User, G2

➡ See how your car count compares →

3. Parts Margin

Parts margin is the percentage of profit you're earning on the parts you sell. It's calculated as (retail price minus cost) divided by retail price.

This one is easy to overlook, especially if your shop has been using the same parts pricing for years. But small differences in parts margin have a compounding effect across hundreds of repair orders. If your parts pricing isn't keeping up with cost increases from your suppliers, your margin erodes quietly.

Top shops use tiered parts matrices that automatically adjust markup based on part cost ranges, protecting margin without requiring manual pricing decisions on every job.

"We were stuck at a certain level. … Once we made the switch, it just opened doors — payments, parts ordering, inventory — it all became more streamlined."  — Tim Lanier, Lanier Auto Group, Tekmetric Customer

➡ See how your parts margin compares →

4. Effective Labor Rate

Effective labor rate is the actual dollar amount your shop earns per labor hour — not your posted rate, but what you actually collect after discounts, flat-rate work, and packaged pricing.

A shop might post a $140/hour labor rate but collect significantly less per hour because of how jobs are built, discounted, or packaged. Tracking effective labor rate surfaces that gap and gives you something concrete to address.

This metric also helps you evaluate how well your labor matrix is working or whether you need one.

"I value its cloud-based agility and the way its real-time shop management board eliminates the bottleneck at the service desk … handling parts tracking and labor margins seamlessly."  — Verified Tekmetric User, G2

➡ See how your effective labor rate compares →

So Where Does Your Shop Stand?

These four metrics are the foundation of shop performance analysis. But knowing what they are is only half of it. The other half is knowing how your numbers compare — not to a theoretical ideal, but to real shops in the real industry.

That's what the Tekmetric Shop Index is built to show you. It's a free benchmarking tool that lets you enter your shop's numbers and instantly see how you compare to shops across the country on ARO, car count, parts margin, and effective labor rate. No Tekmetric account is required.

"With the implementation of Tekmetric we have seen a dramatic increase in business and positive feedback from customers."  — Verified Shop Owner using Tekmetric, G2

You can't improve what you don't measure. And you can't prioritize improvements without knowing where the gaps actually are.

Takeaways

• ARO measures revenue per vehicle. Strong shops track it and act on it.
• Car count captures volume. Both new and returning customers matter.
• Parts margin erodes quietly if you're not tracking it against your costs.
• Effective labor rate reveals the gap between your posted rate and what you actually collect.
• Benchmarking against real industry data turns these numbers into a roadmap.

See how your shop compares. The Tekmetric Shop Index is free, takes less than two minutes, and doesn't require a Tekmetric account.

,➡ Benchmark Your Shop Now →

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