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]

FAQ

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If you've been running your shop on paper repair orders, a whiteboard, or a mix of disconnected tools, you've probably wondered about shop management software. You’ve also likely questioned what it does and whether it's worth the cost and the disruption of switching to a digital system. 

This blog post answers both questions directly with a clear explanation of what auto repair shop management software is, how it works in a real shop, and the signs it might be time to look at one.

What Is Auto Repair Shop Management Software?

Auto repair shop management software is a platform that connects the core workflows of your shop — from writing estimates to completing repairs to collecting payment — in one place. Instead of tracking jobs on paper, managing parts in spreadsheets, and texting customers from your personal phone, everything lives in a single system your whole team can access.

At its core, it's a connected digital workflow for every repair, from the moment a car pulls in to the moment it pulls out.

📋 Quick Definition
Shop Management Software (SMS):
Also called a shop management system, is a digital platform that handles the operational and customer-facing workflows of an auto repair shop: repair orders, estimates, digital vehicle inspections, parts ordering, customer communication, invoicing, and reporting. Cloud-based platforms like Tekmetric can be accessed from any device without on-site servers.

A Step-by-Step Guide of What It Does

The easiest way to understand shop management software is to follow a repair from start to finish and see what the platform touches at each step.

1. Customer Arrives: Write-up and Scheduling

When a vehicle comes in, the service adviser opens a new repair order (RO) directly in the software. Customer info, vehicle history, and previous service notes are already there. There’s no need to search through masses of paper, and no digging through filing cabinets.

2. Technician Inspection: Digital vehicle inspection (DVI)

The tech completes a DVI on a tablet or mobile device, adding photos and videos of anything that needs attention. The results are automatically attached to the repair order and can be sent directly to the customer by text before the service adviser even picks up the phone.

This is one of the biggest workflow shifts shop owners find most beneficial. Customers can review inspection results, see pictures of the issue, and approve or decline work from their phone with no callbacks.

💬 From a Tekmetric customer
"The text feature is a huge hit — customers can review inspection results, check estimates, and approve repairs with just a click. The system is really streamlined and everything is integrated, making our workflow way smoother than before."
- Verified Tekmetric Customer, G2 

3. Estimate Building and Approval

Once the DVI is complete, the service adviser builds an estimate inside the same system. Parts prices, labor rates, and canned jobs are already set up so advisers aren't manually pricing every line. The estimate flows directly into the repair order once the customer approves.

4. Parts Ordering

Parts ordering happens inside the platform, too. Service advisers can submit orders to their suppliers directly from the repair order, track delivery status, and receive parts against open jobs without leaving the system.

5. Work is Performed and Technicians Stay on Track

The tech board gives service advisers and managers a real-time view of every job in the shop: what's waiting, what's in progress, and what's ready. Techs can update job status from their own device, which keeps the whole team on the same page without walking back and forth to the front desk.

6. Invoice and Payment

When the job is complete, the repair order becomes an invoice. Payment can be collected at the counter, sent by text, or processed through a payment link — depending on how the shop is set up.

7. Customer History

Every completed repair, every declined service, every inspection — it's all stored in the customer's profile. Next time they come in, the service adviser already knows what was done, what was deferred, and what's coming up. That's how you build trust and bring customers back.

What Does It Replace?

Most shops that switch to a management platform are replacing one or more of the following:

  • Paper repair orders and handwritten estimates
  • Printed or whiteboard job boards
  • Phone calls and personal texts for customer communication
  • Spreadsheets for parts inventory and pricing
  • Separate software tools for inspections, scheduling, and invoicing that don't talk to each other
💬 From a Tekmetric customer
"We were originally running our shop with two systems; one was for digital inspection and the other was our shop management system. ... I was spending $1,000 a month between the software companies and the IT support. And if the internet connection blipped for a split second, my digital inspection went down for about an hour. Now I'm paying a fraction of what I was before. … We saved a bunch of money, and the estimate writing process is much faster because the labor guide is built into the system."
- Stephane Grabina, Excluservice, Tekmetric Customer  

Signs Your Shop Needs a Digital Shop Management System 

You don't need to be a high-volume shop to benefit from management software. Here are the signals that tell you it's worth a closer look:

  • You're writing the same information down in multiple places such as a paper RO, whiteboard, or a text to the customer
  • Technicians are walking to the front desk to ask questions that should already be in the job
  • You can't tell at a glance how many cars are in progress or where each one stands
  • Customers call asking for updates that your team has to scramble to find
  • You're leaving declined work in your head instead of a system and losing follow-up opportunities
  • Your end-of-day reporting comes from memory or a calculator

None of these are signs of a poorly run shop. They're signs of a shop that has outgrown what paper and disconnected tools can do.

Do You Actually Need It?

If your shop is processing more than a handful of cars a day, the answer is yes. 

The goal of shop management software isn't to add another system to manage. It's to replace the friction in your current process — the paper, the callbacks, the manual pricing, the jobs that fall through the cracks — with one workflow your whole team can use.

"It integrates every aspect of running our shop — from scheduling appointments and messaging customers to integrating payments and sending invoices." - Gigi Collier, G2 Review, Tekmetric Customer 

📌 Bottom Line
Auto repair shop management software connects your repair orders, inspections, parts, customer communication, and reporting in one place. It replaces the paper and disconnected tools most shops are running on today and gives you the visibility to run your business with more confidence and less noise.

What to Look For in a Shop Management Platform

Not all platforms are built the same. The best ones don't just digitize each task — they connect them, so information moves from one step to the next without anyone rekeying it.

Repair order and estimate workflow
The platform should make it fast to write up a job, build an estimate, and convert it to a repair order without re-entering anything. Look for built-in labor guides and canned jobs so your team isn't pricing from scratch every time. On Tekmetric, estimates flow straight into the repair order, and labor and parts matrices keep pricing accurate and margins protected.

Digital vehicle inspections (DVI)
DVIs are one of the highest-impact features in any shop management platform. When technicians attach photos and videos and customers approve work from their phones, authorization rates climb and comebacks drop. The lift is measurable: shops on Tekmetric average $612 per repair order, rising to $741 once digital vehicle inspections are in use. Customers approve more work when they can see exactly what their vehicle needs.

Parts ordering and inventory
Look for parts ordering built into the repair order, so your team submits orders without leaving the job or logging into a separate portal. Tekmetric connects to more than 70 integrations, including the parts suppliers most shops already use, and inventory tracking helps prevent shortages while protecting your parts margin.

Customer communication
Two-way texting, digital estimates, and automated follow-ups should be built in, not bolted on through a third-party tool. Every extra place your team has to go to reach a customer is another place things fall through the cracks. Tekmetric keeps it in one platform: text a customer, send an estimate, and follow up on a declined service from the same screen.

Reporting and visibility
A strong platform gives you a live view of what's happening in your shop right now — car count, technician productivity, average repair order — without pulling a report or doing the math. Tekmetric's real-time reporting puts those numbers in front of you as the day unfolds, so you can coach your team and clear bottlenecks while it still matters, instead of finding out next week.

Cloud-based access
Cloud-based platforms don't need an on-site server to maintain or replace, they back up your data automatically, and they let you log in from anywhere — the shop, home, or the road. Shop owners on Tekmetric point to exactly this: no server to buy and swap out every few years, and the freedom to work from any terminal at any location. It matters more than most owners realize until the day they need it.

See How Tekmetric Works

Tekmetric is the shop management platform built for independent auto repair shops. Repair orders, digital inspections, parts ordering, payments, and real-time reporting all run in one system, on any device. There are no servers and no syncing between tools that don't talk to each other and one login for the whole team.

It was built by someone who lived through the problem. Founder and CEO Sunil Patel ran his own shop and built Tekmetric to clear the friction he hit every day. More than 15,000 shops now run on it, connected to more than 70 integrations for the parts suppliers, labor guides, and accounting tools they already use.

What Changes When the Workflow Connects

When inspections go digital, customers see exactly what their vehicle needs — photos, videos, and clear findings in a single message. When they understand the work, they approve more of it. The results track it: Tekmetric shops average $612 per repair order. With digital vehicle inspections in use, that average rises to $741. Add MotoVisuals educational videos, and it reaches around $800. It’s the same honest work, but more of it is approved because customers understand what they're paying for.

That's the pattern across the platform. Faster turnaround from check-in to checkout. More cars through the bays. A customer experience that earns repeat visits. The friction falls away, and shops run on results instead of guesswork.

💬 From a Tekmetric customer
"The amount of information that is available to the front desk, the service adviser, and the technician at a glance is very impressive, and the functionality of it together is great."
— Moises M., Guest Service Representative, G2 Reviews, Tekmetric Customer

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Your automotive shop's service advisor plays an important role in the overall operation and even growth of your business. The service advisor explains maintenance and service needs to customers, and answers their questions in detail. The success of your business relies on having the right people in these roles and supporting them with necessary skills training. 

To find the best candidates, look for people with potential or training in these areas: 

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The truth is that estimates tie into professionalism. When the first oral surgeon gave you an estimate for your wisdom tooth removal surgery, they helped you:

  • Manage your expectations: You knew what kind of procedure to expect, and how much you could expect to pay for it.
  • See that the office cared about your wellbeing: The oral surgeon and their staff wanted you to make the best choice possible and gave you a resource to accomplish that.
  • Have a reference point for the future if any issues come up: For example, if you got charged a couple of hundred dollars more after your procedure, you’d have documentation to show that the extra cost wasn’t part of the plan.

Wisdom tooth removal surgery isn’t cheap. Neither is auto repair work.

Just like a professional oral surgeon’s office explains to patients what their options are and how much they should expect to pay for procedures, a professional auto repair shop shows drivers what their repair work options are and how much they should expect to pay for repairs.

That professionalism is what helps you win over and retain more customers. If your customers are deciding between different auto repair shops, they’ll likely stick with the business that shows the most professionalism.

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