Used-car boom fuels North Bay repair shop revenue
Car owners are holding onto their vehicles longer than ever. That’s been a boon for North Bay independent repair shops, especially after the economy started reopening from the coronavirus pandemic restrictions.
U.S. vehicle age is now 12.1 years, a new record, according to IHS Markit data compiled by The Detroit News.
At Bowen’s Automotive in Rohnert Park, the average car rolling in the door is 12 to 15 years old, according to co-owner Travis Bowen.
“Since CarMax moved into town here, the younger generation is able to pick up a high-line car for a reasonable price,” Bowen said, referring to the November 2016 opening of the Santa Rosa location for the national used-car dealer. “There's just seems to be a lot more college kids driving BMW, Mercedes, Audi, Volvo.”
But there is a limit to how much car owners are willing to pour into their vehicles before looking for a new ride, Bowen said.
When his shop first opened in 2005, it did more transmission and engine overhauls, but that’s changed as the model years of vehicles rolling into the shop has progressed.
“Transmissions and engines in general last so much longer than they used to,” Bowen said. Vehicles made 30 to 40 years ago may have needed a significant powertrain overhaul every 30,000 miles or so, but the timing for that repair cycle has extended to 150,000 to 250,000, he noted. But with the advancements and complexity has come cost: as much as $4,000 to $5,000 to replace a transmission and $7,000 to $10,000 for an engine rebuild, depending on the vehicle.
“When you've got a car that's old enough and has 200,000 or more miles on it, do you want to put that kind of money into a car like that?” Bowen asked. That becomes a bigger factor when the repair price could go toward a used car with far less mileage. "It’s just a better investment to dump it at that point and get something newer.”
Experts say that the increase in manufacturing quality for cars and trucks in the past 15 years is contributing to their longevity, according to The Detroit News.
Vehicles coming into San Rafael’s DNA Automotive in go back to the 1995 model year.
“There's definitely more people doing more maintenance, more repairs, just to keep their cars in better shape, rather than going to get a new car,” Antonio Lara, who with his co-owner brother Donny make up the “D” and the “A” in the shop’s name.
A key reason why the shop doesn’t work on cars made earlier than the mid-1990s is that the time it takes to find parts would keep cars in the waiting lot too long, he said.
Modernization of marketing for repair shops has been helping with their profitability.
At Bowen’s Automotive, the average repair order has been rising for the last several years, a change Travis Bowen attributes to the rise of the internet.
The shop used to do a lot of mailers advertising oil changes, and that would bring in lower-priced jobs. As the number of consumers online started rising, the business started doing more search and social media marketing, buying placements with Google Ads and putting attention its Yelp presence.
“It's more of what I call ‘internal advertising,’ where they're looking for you, instead of you putting something out to them,” Bowen said. “So what happens is when the car breaks down, they call you for that repair, instead of you putting a loss leader in their face, like an oil change. So it tends to be a much higher ticket value.”
Though the number of vehicles coming into Bowen Automotive is down from several years ago, overall gross sales are higher because of the higher job ticket value.
Though auto repair shops were classified as essential businesses allowed to remain open during the shelter-at-home public health orders intended to slow the pandemic, the establishments also suffered from demand and supply problems created by those measures, local shop owners and managers said.
“The way they dealt with other types of businesses, making them essential or nonessential, definitely affected me, because now people either don't have a job or they're working remotely, meaning that they don't drive their car back and forth to work,” said Rick Row, owner of North Bay Bavarian, a Santa Rosa shop specializing on repairs of BMW and Mini vehicles. “And the schools being closed has definitely affected me, because parents aren't driving their cars, nor are the teachers.”
And similar public policy decisions in locales where parts suppliers and logistics companies are located has made it challenging to get parts on a timely basis or at all, Row said.
The flow of work at Bowen’s Automotive fell off so sharply in the early months of the pandemic that the shop started sending out emails to customers, informing them of safety and sanitation precautions.
“We offered to pick up and deliver their cars and fill them up with gas for them,” Bowen said, pointing to concerns from health officials early on that the coronavirus could be contracted from surfaces such as gas pump handles.
Jeff Quackenbush covers wine, construction and real estate. Before the Business Journal, he wrote for Bay City News Service in San Francisco. He has a degree from Walla Walla University. Reach him at email@example.com or 707-521-4256.