What to Know: Section 179 for Auto Repair Businesses

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Read time: 3 min

Legal Disclaimer: This article is written for informational purposes only and does not constitute professional financial advice. Please reference section179.org and a professional accountant for advice on financial planning and filing taxes.  

As 2020 comes to an end, you might be thinking about all of this year's expenses and wondering what you might be able to write off on your taxes. You may even be considering whether or not to make a big purchase, weighing the tax deductions you could get if you bought it this year versus next.

Is it worth buying that new lift before the year ends? Or should you put it off until 2021?

What is Section 179?

Section 179 of the IRS tax code allows business owners to write off the entire cost of a piece of equipment, renovations, or other assets in the first year instead of writing off an asset a little bit at a time over a five, seven, fifteen, or thirty-nine year period. To give an example, if a shop owner buys a new tire machine, they could either write off the taxes over a seven-year period, or they can use Section 179 to get the entire deduction in the first year.

What Type of Costs Qualify for Section 179?

  • Tangible business property, including machinery and equipment
  • Leasehold improvements
  • Computer software*

*Is Tekmetric Eligible for Section 179?

Generally speaking, off-the-shelf computer software that has been purchased outright is eligible for Section 179. Because Tekmetric is a web-based software and does not make users sign a contract, it is not eligible for section 179, but it does qualify for a standard tax deduction.

What are Leasehold Improvements?

Leasehold improvements are any repairs or modifications that you make to your building or property, including adding a new roof, installing security or safety systems, and remodeling parts of your building without expanding the footprint. Without Section 179, leasehold improvements depreciate over 15 or 39 years, depending on what the improvements are. With Section 179, you can receive the entire deduction in the first year.

How Often Does Section 179 Change?

Section 179 is typically adjusted every several years. Most recently, Section 179 was adjusted in 2018 when the deduction limit was doubled and more types of purchases were made eligible. Section 179 may change again in the following years.

Section 179 for Auto Repair Businesses

When Should You Use Section 179?

If you know that you’re going to pay taxes this year, and you have made a major qualifying purchase, then you may want to consider using Section 179 to save on your taxes and free up some cash flow for 2021.

If you financed a major purchase, you may want to consider how soon you plan on paying off that purchase and whether or not you would like to receive a tax deduction in the following years as you pay it off. For example, if you have a loan on a piece of equipment that you plan on paying over five or ten years, you may want to opt for the regular depreciated tax reduction so that you have money to offset those taxes in the following years.

Should You Make a Major Purchase Before the Year Ends to Use Section 179?

It’s not the wisest decision to buy something just to save money. It is true that Section 179, and tax benefits in general, are the best that they’ve been in years, but consider only making a major purchase if it is already in your plan and budget. If it is something that you already planned on buying in the next six months, then you may want to make the purchase before the end of the year to leverage Section 179’s tax deductions.

Talk to the Auto Repair Accounting Experts

Every situation is different. Take a look at what your tax rates are and ask yourself, "Is my income low enough this year where I'm actually reducing taxes at a pretty low rate? What do I think the tax rates are going to be in the future? Or will this benefit me more in the coming years when I think I'll be making more money?"

Talk to your accountant to form a game plan for all of this.

This article was written with the guidance of automotive repair industry CPA Hunt Demarest of Paar, Melis, & Associates, P.C.

Need help planning your taxes for 2020? Contact Paar, Melis, & Associates.

👉 Ready to grow your automotive business? [Book a personalized Tekmetric Demo Here]

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Creating a great culture at an auto repair shop is the key to keeping and growing technicians 

Cars are lasting longer than ever, but the technicians who fix them are becoming harder to find. The average vehicle on U.S. roads is about 13 years old, and there are not enough skilled technicians to go around.

The auto repair sector needs about 71,000 new technicians a year, and the training pipeline delivers only about 50,000. That is more than 20,000 unfilled positions every year, and the shortfall continues to grow.

That gap is stark.

For auto repair shops, the shortage is not a statistic. It is a daily question: who is going to fix the cars?

Sunil Patel, Tekmetric founder and CEO, said this crisis can be solved with auto repair shop improvements. Those solutions, however, often are not the ones most shop owners typically expect.

Before he founded Tekmetric, Patel owned Motorwerks, an independent repair shop in Houston, Texas, where he learned about the technician shortage from inside the bay. After years of seeing the problem as a shop owner and now as an automotive repair technology leader, Patel says the shortage will not be solved with better software alone. 

It starts with creating a great culture and valuing people. Patel speaks from firsthand experience, and his conviction on where to start is clear.

"I would spend a lot more time on the culture side of it," he said. "I would make sure I'm building an amazing culture that attracts amazing technicians."

The First Hire

Patel started Motorwerks as a one-man operation. He turned wrenches at night and took vehicles in during the day. There was no hiring strategy because there was no one to hire but himself.

Then the work outgrew him.

"Eventually I started getting busier and busier, and I needed a technician," Patel said.

He reached out to a contact at a local dealership and asked if he knew anyone looking for work. The technician that was recommended had just been let go from the dealership. He had made a mistake, but he was genuinely skilled. Patel took the chance and hired him.

It paid off.

"He would crank out hours, and he was really good at his job," Patel recalled.

The technician struggled with diagnostics, but that happened to be the part Patel enjoyed most. The two skillsets fit together. The shop kept moving.

That early hire taught Patel something he tells shop owners to this day: a great technician is rarely great at everything, and the shops that win are the ones that build a team around complementary strengths and skills.

Why Hiring Became Harder

The work itself is part of the challenge. Repairing cars has always been demanding, but it keeps getting harder, and nowhere more than at an auto repair shop.

Consider the difference between a dealership and a shop. A dealership technician works on a narrow set of vehicles from a single manufacturer, where the engineering stays largely consistent from one model to the next.

"If I take the most compact car versus the most expensive car, the underlying technology is going to be very similar at a dealership," Patel explained.

A technician who has never touched a particular model can usually still work on it because the platform underneath is familiar.

An independent auto repair shop has no such predictability. It can take all makes and all models.

"You don't know what's going to come through that door," Patel said.

Shops can see a Honda one morning, a Toyota that afternoon, and a European luxury car the next day. Every job can push a technician past what they know best. And the steepest part of that climb is no longer mechanical — it is electronic.

"The hard part of this is not the mechanical side," Patel said. "It's the electronic side where technicians usually get stuck."

Modern vehicles run on layered software, networked sensors, and advanced driver-assistance systems. The U.S. Bureau of Labor Statistics notes that technicians increasingly work on these complex electronic and computerized systems, and diagnosing them well is a specialized skill. Those specialized skills are exactly what the labor market is short on.

No shop can send its team to factory training for every brand. There are more than 50 vehicle manufacturers on the market. The best shops specialize the way Patel did at Motorwerks: for instance, one technician strong on European vehicles, another on Japanese, another on domestic. That mix lets a shop triage almost anything that rolls in, and it turns a hiring problem into a team-building one.

The Myths Keeping Young People Out

Ask most people to picture a technician, and the image is dated. Greasy hands. A hot bay. Hard, dirty work.

Patel said that picture is a mischaracterization of how technicians work today.

"A lot of that is changing," he said.

Some independent shops today are fully air-conditioned. Part of the work is no longer mechanical — it is electronic, diagnostic, coding, and programming.

"You've got to be able to use a laptop," Patel said.

The old image does real damage. It steers young people away from a career that has quietly modernized. Correcting it, in Patel's view, is one of the industry's most important recruiting jobs.

Culture Is the Real Reason Technicians Leave

Patel said one pattern separates the businesses that attract and keep great technicians from the ones that cannot. It is culture. And many shops have room for improvement.

"When a technician leaves a repair shop, it's not because of the money," Patel said. "It's mainly because of the culture and environment, or lack thereof, that causes them to leave to another shop."

There is a structural reason culture gets neglected. Many independent shops are founded by technicians.

"They're not trained in the fundamentals of running a business, attracting top talent, and building an amazing culture," Patel said.

Most learn it through trial and error.

His prescription is uncomfortable for a lot of owners. Ask your technicians how they actually feel about working for you. What do they like? What do they not like?

"These are things shop owners sometimes don't even want to ask because it's out of their comfort zone," Patel said.

But the question itself sends a message.

"I want to make sure I'm doing everything in my power to build an amazing environment for you to thrive in, to grow," Patel said. "This is an emotional thing.”

The cost of getting it wrong is measurable. Collision shops alone see 30 to 40 percent annual technician turnover, according to a 2024 industry study from I-CAR and the Society of Collision Repair Specialists. Replacing skilled workers runs an estimated one-half to two times their annual pay when recruiting, lost production, and training are totaled, per Gallup.

In a trade this short on talent, a culture that keeps people is not a soft benefit. It is a bottom-line advantage.

The Small Things Add Up

Building culture does not require a consultant or a budget line. At Motorwerks, it was lunch.

Every Friday, Patel bought the team lunch and let the technicians pick the food. Eventually, he started barbecuing in the back of the shop, then rotated the grilling duty across the crew. He  also experimented with better health care and benefits.

None of it was flashy. All of it pointed the same direction.

"Making them feel like we care is what it boils down to," Patel said.

Real Pay and a Real Career Ladder

Technician compensation is misunderstood. Many people assume a shop career is a financial dead end. It is not.

"Some of the best technicians can earn a solid six figures," Patel said.

The range is wide, and that is the part young people rarely hear. The median automotive technician earns about $49,670 a year, according to the U.S. Bureau of Labor Statistics. But the ceiling is far higher. Top flat-rate and master technicians routinely clear $100,000, and the fastest specialists earn as much as $160,000. The career rewards skill and speed, and its best earners are paid like it.

But money alone does not keep a technician on the job because the work is physically taxing. Technicians spend hours in awkward positions, lifting heavy parts, and holding components in place. Cuts, bruises, and back strain add up. Long days take their toll.

That is why Patel believes shops need a ladder, not just a wage. Owners should create a pathway for young technicians to grow into team leads, roles where their experience lifts the next generation rather than only their own billable hours. A career with a visible next step keeps good people in the industry.

Where Technology Fits

Patel is candid about the role Tekmetric plays in all of this. Technology did not create the shortage, but fragmented software makes technicians' jobs harder than they need to be.

For years, the shop technology stack was disconnected: one system for the front counter and a separate one for the technicians in the bay.

"Nobody's ever created an end-to-end solution from the time a vehicle is taken into a repair shop to the time it's fixed," Patel said.

Building that single, unified platform is the problem he set out to solve.

Tekmetric built tools specifically for technicians. The Tekmetric mobile app lets technicians move faster and target the exact friction that makes technicians skip digital vehicle inspections (DVIs).

Ask a technician why they do not run a DVI on every vehicle, and the answer is speed. It takes too long to photograph the issue, edit the images, and write it up. Tekmetric collapses that into something as simple as taking a video.

The payoff shows up in the numbers shops care about. The average repair order across Tekmetric shops is $612. With DVIs active, it climbs to $741. Add MotoVisuals video, and it reaches roughly $800. Faster, easier inspections do not just help the technician. They help the customer make an informed decision, and they help the shop grow.

The technicians are now the ones pushing owners to modernize.

Patel has watched technicians go to new shops and refuse to work on anything else other than Tekmetric. The platform's ease of use is what keeps them hooked.

"They tell the new shop, 'I'm not using whatever you have. You have to switch to Tekmetric,'" he said.

Building the Next Generation

Closing the shortage means reaching young people before they ever pick a trade. Patel is betting on the classroom.

Tekmetric is leading the effort by working directly with trade schools to understand what it can do to help, and what it found was a gap. Many training programs still run on pen and paper, or carry a cost for software and repair guides that creates a financial barrier to invest in other places.

"A young person comes in who's stuck on their iPhone, and they think, 'This is how this industry operates,'" Patel said.

The disconnect between the technology in a student's pocket and the technology in the classroom is its own recruiting problem.

To combat this, Tekmetric gives its platform to these schools for free. The goal is to let the next generation see, from day one, that a modern shop runs on modern tools.

Patel's pitch to any high school guidance counselor is straightforward. A student can leave high school, work as a technician for five to 10 years, and open a shop of their own.

"That is something exciting, and it's meaningful income," he said. “It is a path to ownership, not just a job.”

Why It Matters to Him

Patel has been in this industry long enough to feel its history personally, back to the muscle cars of the 1980s.

"It's part of the fabric of America, and it's what makes this country great," he said.

He knows the pains that shop owners, service advisors, and technicians carry, because he has carried them himself.

He is hopeful the shortage reverses, and clear-eyed about what will and will not get it there. Better tools help. Better training helps. Better culture helps most.

The shortage, in the end, is a people problem. Patel's whole argument is that shops should start treating it like one.

"AI is not going to solve fixing cars," Patel said. "That's something a human being is going to have to do for a while."

In the automotive repair industry, efficiency and organization are key to keeping customers happy and maximizing productivity. While traditional tools have always been the foundation of a mechanic’s work, modern software solutions like parts inventory management software are revolutionizing the way shops operate. By integrating software with traditional tools, mechanics can streamline repairs, reduce downtime, and focus on delivering exceptional service.

Here are four ways auto parts inventory software can transform your shop into a well-oiled machine.

1. More efficient repairs

One of the biggest challenges mechanics face is delays caused by missing or misplaced parts. With inventory management software, you can always have a clear view of your inventory, ensuring the parts you need are in stock and ready to use. This eliminates the frustration of searching for or reordering parts mid-repair, expediting the entire process.

Tekmetric’s inventory management software gives you real-time updates on stock levels, so your team can quickly locate and retrieve parts when needed. By integrating this system with traditional tools, you can keep your repairs moving faster, improving turnaround times and customer satisfaction.

4 Reasons your shop needs auto parts inventory software.

2. Clear organization

A disorganized shop can lead to wasted time, miscommunication, and errors. With car parts inventory software, you can create a digital inventory catalog, ensuring every part is accounted for and can be easily located. This streamlined organization makes it simple to track high-use items and plan for reordering.

Traditional tools like diagnostic equipment and repair manuals can be paired seamlessly with software features like Tekmetric’s parts ordering system, which ensures your shop has the tools and parts needed to tackle every repair. Combining digital and physical resources helps mechanics stay organized, reduce clutter, and maintain a professional work environment.

3. Less administrative work

Manual inventory management takes valuable time away from what technicians do best: repairing vehicles. By adopting auto parts inventory management software, you can significantly reduce the time spent on administrative tasks. Tekmetric automates inventory tracking, reordering, and reporting, freeing up mechanics and shop owners to focus on delivering quality service.

Automation also reduces errors in inventory counts, minimizing costly mistakes and ensuring your team always has the parts they need. With less time spent on paperwork, your shop can prioritize what matters most: getting customers back on the road quickly and safely.

4. Better customer experience

Auto parts inventory management software is designed to make your shop more efficient, organized, and customer-focused. By providing real-time updates, automated tracking, and seamless integration with traditional tools, Tekmetric helps shops stay ahead of the competition.

Closing Thoughts

For mechanics and shop owners, integrating modern tools like car parts inventory software with traditional equipment isn’t just an upgrade—it’s essential for staying competitive. By streamlining repairs, improving organization, and reducing administrative work, inventory software enables your shop to operate more efficiently and deliver better service to your customers. Invest in the tools that make a difference and see the results for yourself.

Auto Parts Inventory Software: 4 Reasons Your Shop Needs It

December 13, 2024

Read time: 3 min

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“If you are interested in picking up a new hobby like boating, you’ll do everything you can to learn more and more and more. Why can’t you do that with your auto repair shop?

Is it because it’s boring?

Is it because it’s not the same?

It doesn’t excite you as much as your hobby would?

If you take a second and stop to think, you’ll realize you can have any hobby in the world if you focus on your repair shop and get it to where it needs to be.

There is no waiting for the right person to walk through the door. There is no waiting for the right technician."

"It has to happen right now, today."

Tekmetric Co-CEO and Co-Founder Sunil Patel recently joined Kelsey Outram on the LIFT Your Shop Podcast to talk tech, mentorship, and transforming your auto repair business.

From medical school to law enforcement, Sunil tried his hand at a variety of fields over the years, but eventually all roads led him to founding Tekmetric with Prasanth Chilukuri in 2016.

Tekmetric quickly became the preferred shop management system in the auto repair industry.

And if you ask Sunil why, he’ll say it’s all about mindset.

If you’re a shop owner who has been feeling stuck, here are six steps you can take to shift gears.

1. Define Your Goals

“When you really set your mind to something, it subconsciously changes how you behave as a human, as a person. And you hone in on what you’re trying to accomplish and you accomplish that task.”

Here are some examples of goals you might hear people talk about in the auto repair industry:

  • “I want to make one million dollars in revenue this year."
  • “I would like to add another bay to the shop by the end of the year."
  • “I want to open another location in 2023.”

What do these goals all have in common? They are specific, achievable, and easy to track.

In the same way that it’s difficult to plan a vacation without having a travel destination in mind, it’s difficult to achieve a goal if you never set one in the first place.

Knowing where you want to go is the first step toward figuring out a roadmap to get there.

2. Accept That Change is Part of the Process

“Forget about the technology and software and all that for a moment, and ask yourself this: Are you happy with where you are today running your shop? And if the answer is no, then dig deeper.”

Whether your shop is looking to switch parts suppliers or invest in a new shop management system, change can be intimidating.

Many shops experience growing pains, but keeping an open mind is essential to driving your business forward.

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