3 Ways to Maximize Auto Repair Shop Profitability

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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When he set off to create Tekmetric, founder and CEO Sunil Patel had an ace up his sleeve: experience running his independent auto repair shop.

Running a repair shop is the background of everything we do. It's that partnership between Tekmetric and the auto repair shops that leverage the platform daily that enable us to build the absolute best tool for the job: running an independent auto repair shop.

So we set out on a mission to deepen our connection with our customers and understand each shop's unique challenges and wins by visiting as many customers as possible.

We wanted to understand the unique challenges and victories each shop faces, to truly deepen our connection with you. The results? It blew us away. Your stories, your shops and your teams are the heart of what we do. You inspire us every day to provide the best solutions for the independent auto repair industry.

Tekmetric's Customer Obsession

Whether your shop is general repair, like brakes, fluids and check engine lights, or a specialized business focused on older European cars, there’s one thing that’s always the same: the amazing, critical work your shop does to get people back on the road!

And it’s your amazing shops that use Tekmetric that make all this possible. Our customers' valuable feedback is what helps us develop a better platform, and the proof is in the pudding.

Just look at all the awards we’ve been winning because of our users, like you!

What We Hear from Independent Auto Repair Shops

No one knows what it takes to run an independent auto repair shop better than the teams that rely on Tekmetric to power their operations.

Here's what we heard from shops and why they love Tekmetric:

Tekmetric's ease of use and simplicity in running your shop

‍Everything you need to run your shop is organized, tracked, and maintained in one tool.

Whether you're a shop owner peaking into real-time performance reports or analyzing shop trends, a general manager ensuring cars flow quickly and efficiently through your shops, a service advisor supporting customers, or even a technician fixing cars, Tekmetric can help your shop operate like a well-oiled inline 6.

Tekmetric empowers shop to grow and reach their next level

‍We constantly hear how shop owners have leveraged Tekmetric to grow their business in ways they never expected.

Whether that means opening and managing multiple locations, simply adding a few new bays moving into a larger location, or even expanding your operations to service more customers, Tekmetric's simplicity and complete control over your shop makes it easy to track, plan, and grow.

Tekmetric's commitment to transparency and communication

Because we're so customer-obsessed, we're always here to help! As a cloud-based solution, Tekmetric helps run your shop by doing a lot of the operational "heavy lifting," so to speak.

Not only do we provide the right tools for the job, but we're here to partner with your shop. Our support doesn't end, and we're always a quick message or phone call away, anytime you need support!

Our Commitment to Shops Like Yours

Because we're here to help your great shop get even better, we're always open to hearing how we can make Tekmetric even better! 

Want to see Tekmetric in action? Book a demo today to see how you can revolutionize your shop operations.

Tekmetric, the leading Houston-based automotive repair technology company, has been recognized as a 2022 MOTOR Top 20 Award winner for its recent integration with RepairLink by OEConnection (OEC), a renowned technology provider for the aftersales industry.

The integration, selected by industry experts as well as public popular vote, allows shop owners to seamlessly order original equipment manufacturer (OEM) parts directly from the Tekmetric Shop Management System.

For over three decades, the annual MOTOR Top 20 Awards have recognized outstanding new industry solutions across the automotive industry, from the most innovative tool or equipment to creating the best customer experience.

Winners are selected by automotive professionals and experts who voted over a thirty-day open voting process from a selection of this year’s most valuable contributions to the industry.

“As a leading shop management system, our team at Tekmetric shares a mutual belief with our partners at OEC that we best support shop owners in all their business needs by providing modern and relevant solutions,” said Sunil Patel, Co-Founder and CEO of Tekmetric.

“We are honored and humbled to have the Tekmetric-RepairLink integration recognized by both our customers – shop owners – and our industry peers as one of this year’s most innovative solutions.”

With its combination of Tekmetric’s cloud-based capabilities and RepairLink’s parts ordering platform, the integration builds upon Tekmetric’s existing parts ordering offerings to streamline the process of ordering OEM parts for auto repair shops. Through the integration, shop owners can track orders or returns with real-time online updates, as well as address orders in one screen, transferring any quoted parts and VIN numbers automatically into Tekmetric.

“Vehicle sophistication is growing rapidly, and all signs point to even more advancements, meaning it’s absolutely necessary for repairers to have enhanced access to critical parts and information,” said Bonnie Coleman, OEC Director, Mechanical Retail.

“This is why OEC is thrilled to partner with Tekmetric, and that this integration has been recognized for the valuable contribution it offers to the industry.”

To learn more about the MOTOR Awards and view the 2022 Top 20 Awards, visit https://www.motor.com/top20awards-winners.‍

About Tekmetric

Tekmetric, a Houston-based auto repair technology company, offers a cloud-based platform that enables auto repair shop owners to enhance productivity and increase profitability through its streamlined workflow management processes.

Designed by a former shop owner, Tekmetric’s platform drives shop efficiency through real-time data, a customizable user interface and customer-centric communication tools.

Since its launch in 2016, Tekmetric has disrupted the industry with its robust fully-integrated system, developed with an emphasis on customer transparency and user collaboration.

For more information, visit www.tekmetric.com

About OEConnection Holdings LLC

OEConnection Holdings’ portfolio includes OEC, the leading parts ecommerce technology provider for OEM distribution networks, serving over 20 OEMs and 100,000 dealership and repair customers.

Providence Equity Partners is the majority stakeholder of OEConnection Holdings; Ford Motor Company and General Motors are minority stakeholders.

The company is headquartered in the greater Cleveland area at 4205 Highlander Parkway, Richfield, Ohio, 44286

Additional information is available at www.OEConnection.com.