Stay competitive and increase car count with the latest money-making machinery.
By Nick Winfrey
This OMG! ROI series evaluates the best return on investment options to support your needs and goals.
Three years ago, Kevin Delaney was too familiar with the woes of outdated and underperforming repair shop equipment. As the co-owner of Europro Autohaus and ValleyPro Autohouse in Kelowna, British Columbia, he struggled with using an alignment rack that was unreliable and required a lot of setup time. Even worse, Delaney recalls with frustration that “every job needed to be done twice.”
Not exactly the model of efficiency. So, the decision to finance a new alignment system was a big one for Delaney. State-of-the-art machines can easily rival the cost of putting a child through a four-year university — however, the purchase has ultimately paid dividends. “We averaged one alignment weekly,” he says. “Now, we’re at four per week, and we’re performing them faster.”
Speaking with independents across North America, we encountered a common dilemma. The need for business owners to keep up with the latest technology clashes with their understandable apprehensions over often daunting costs. One thing remains certain, though: In order to stay competitive, operators must invest in high-quality machinery.
The question of which repair shop equipment to acquire ultimately comes down to profitability. The industry experts we interviewed took several factors into account before making their purchases, including the buying habits of local consumers, the popularity of certain services and the ability to increase car count while simultaneously boosting productivity.
Below are four top revenue generators and the stories behind how they were implemented by progressive proprietors.
1. Straightening out alignment gear problems.
Serving the Okanagan Valley of British Columbia, a lake-spotted region nestled between dense rainforests and tall mountains, Delaney’s Europro Autohaus faces an entirely different set of demands from customers.
“Being in Canada, we have seasonal tire changes, so we try to get every vehicle in for alignment checks,” he says, highlighting the importance of having prime repair shop equipment.
After sampling different devices over several months, Delaney ultimately settled on the Hunter HawkEye Elite alignment system. Costing roughly $40,000 with some extra add-ons, the machine is by no means inexpensive, but it has more than halved the facility’s time spent on alignment work. “We went from 90-minute job times to less than one hour,” he says.
Hunter’s three-year financing program, which cost less than $1,000 monthly, made it easier for the operation to incorporate income-generating accessories during the initial purchase. Delaney spent $3,000 on the Quick Check vehicle inspection system, which automatically monitors alignment, battery health and engine modules in under five minutes. “It’s a great upsell,” he says.
Since implementing the repair shop equipment three years ago, Delaney and his crew have hit the ground running and haven’t looked back. The new platform required only a few hours’ training. “The software is so user-friendly that it was a quick learn,” he says.
Now gearing up for a second winter season with the tool, Europro Autohaus is providing more streamlined service to a higher volume of customers. The business has more than tripled its alignment work and performs seven or eight jobs per week for a monthly earning increase of more than $3,000.
2. Warming up to air conditioning machinery.
For John Eanes, owner of Galveston Automotive Professionals, investing in new air conditioning repair shop equipment was a no-brainer. “We live in an area where it gets incredibly hot and humid,” he relates on a sweltering Galveston, Texas, afternoon. “Air conditioning is a big money-maker for us, so I’m going to buy anything related to it.”
Eanes purchased his Robinair Recover, Recycle and Recharge system for $5,300, which included an automatic oil drain, air purge and refrigerant refill. And, it has proven to be a profitable idea — paying for itself within the first year.
High temperatures engulf Galveston from April through November. So, Eanes estimates that his crew performs about eight recover and recharge jobs per week during the city’s long summer season, bringing in a significant and consistent cash flow.
As far as incorporating the Robinair into his business, Eanes relates, “Easy — no training.”
Not only is the device a huge producer, Eanes has also found it to be an irreplaceable time-saver. “It goes from A to Z and does the whole procedure on its own,” he says. “With the older machine, you had to babysit it all the way through, which could waste 30 minutes or more.”
How to Fund a Repair Shop Equipment Depreciation Account
Raising the capital necessary to purchase new machinery can be a formidable task. However, regularly contributing to a depreciation fund can greatly reduce your accounting woes. Husband-and-wife team Mark and Summer Guerrero co-own After Hours Auto Repair in Wichita, Kansas, and have sidestepped financial burden and increased their purchasing power through efficient saving methods.
“We maintain two funded accounts — one for taxes and another for repair shop equipment depreciation,” Summer says.
“With how quickly things change [concerning] equipment needed for [repairing] newer vehicles, it’s crucial that you put money aside for servicing them,” Summer relates.
To pull it off, the Guerreros first calculate the lifespan of each piece of equipment. Next, they formulate a savings plan based on the cost of replacing it broken down into a yearly sum and then monthly targets.
Summer illustrates the system as such: “A lift’s average lifespan is about eight years before needing maintenance, repairs or replacement, so I put $50 away each month to have collected funds available when the time [arrives].”
She admits that strategy can often be difficult to stick to, but the facility has already begun to see the fruits of the fund. Just recently, the couple tapped into the account to spend $19,000 on a diagnostic device. According to Summer, the new machinery has “increased the number and types of jobs” the shop can perform and is bringing in about five to 10 more projects per week.
No doubt Summer has already started to prepare for this recent addition’s successor several years down the line.
3. Hard to resist diagnostic software.
With nearly 40 years of experience in the auto repair industry, owner Stephen Cotarelo knows better than most the importance of staying up to date with diagnostic technology. Since 2007, his Hightech Automotive facility in Forest City, North Carolina, has built a reputation on “getting it right the first time” with its complimentary 27-point inspection.
“Having the correct repair shop equipment is crucial,” Cotarelo says. “Other locations often resort to simply replacing parts until the problem is fixed. This results in unnecessary comebacks and added expense.”
In October 2016, Cotarelo financed a Snap-on diagnostic system through the manufacturer over six interest-free months. It replaced an older Snap-on product. “It’s improved our diagnostic speed tremendously,” he says. “The platform is still the same, but it’s a faster tool that does more.”
Given the team’s familiarity with Snap-on gear and the intuitive nature of the new software, training was virtually nonexistent. Workers now typically complete diagnostics in one hour or less, allowing the operation to bring in as many as five vehicles per day for testing.
The tool features some of Snap-on’s most sought-after bells and whistles, such as a 32-inch touchscreen display, built-in scopemeter and wireless capabilities. In fact, the device’s cordless nature makes it an especially worthwhile upgrade compared to Cotarelo’s old machine. Now, his techs can diagnose cars faster since they’re not lugging around a cart and cumbersome cables.
Cotarelo sees the equipment’s true value lying in its future adaptability. He places a premium on the platform’s easily updated software since Snap-on may eventually stop releasing updates for his older device.
4. Pipe dream comes true.
K-O Auto owner Jim Krell has been around the industry his whole life — quite literally. His parents ran a gas station in the small western Montana town of Post Creek, and Krell has been ASE Master Tech certified since 1986.
However, it wasn’t until late 2016 that the tech turned independent businessperson finally decided to throw his hat into the custom exhaust ring. Few facilities in the area offer the service, and his team saw an opportunity to corner the market at the Ronan, Montana, operation.
According to manager Charles Smith, by keeping the work in-house, “K-O Auto has a better chance of getting the jobs.” Still, it wasn’t a small undertaking by any means. “We had to buy a pipe bender, which cost about $18,000,” Krell says.
For Krell and his crew, implementing the new gear wasn’t difficult. All told, he spent approximately $30,000 on inventory and training, but the staff tackled repairs and custom jobs after only a full day of hands-on tutorials.
The payoff has been more than worth the financial commitment. In the six months since investing in the repair shop equipment and instruction, Krell says that his fledgling exhaust service “has brought in lots of new customers.” With an average repair order of $450, Smith estimates that the team nets between five to eight projects per week, including one or two
By fulfilling a niche for auto enthusiasts and allowing the facility to keep all the work in-house, Krell claims it’s an offering that sells itself: “It’s something the customer actually wants.” [For more information on targeting niche demographics, see Why Surveys Boost Your Bottom Line.]
Furthermore, without the need to outsource, Smith adds, “We get ’em done and out the door.”
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