Are auto repair shops profitable?
Jessica Cortez
Updated on March 31, 2026
The benchmark for net profit for an automotive shop is 20% of sales. That means if 7% is required for retained earning, the remaining 13% is required to pay for the return on investment.
How do Used car dealers make money?
The big profit usually comes through arranging car loans, selling add-ons, and making money on your trade-in. Dealers can easily make a profit of $3,000 just through the financing alone (see: How Dealers Make Money on Financing). They simply low-ball your trade-in, then turn around and sell it for a nice profit.
What is the average profit margin for auto repair?
between 20-28%
For the automotive repair industry, the average profit margin is between 20-28% for parts and 50-65% for labor. In order to maximize your profit margins, you either need to increase your revenue or decrease your costs.
What small business make the most money?
Most profitable small businesses
- Personal wellness.
- Courses in other hobbies.
- Bookkeeping and accounting.
- Consulting.
- Graphic design.
- Social media management.
- Marketing copywriter.
- Virtual assistant services. Finally, last on our list of the most profitable small businesses: virtual assistant services.
What dealers pay for used cars?
A dealer will usually spend between $250 and $500 preparing the vehicle for sale. So all you need to do to get an idea of what a dealer will pay for your car is to check the listing prices of similar cars, take 80% of that price and subtract $250 to $500 to get your “rough estimate”.
How can I improve car repair sales?
8 Keys to Selling Auto Service Professionally and Ethically
- Be prepared to cost-justify.
- Know your customers’ buying habits.
- Have the right tools available.
- Emphasize the benefits.
- Let the customer know you have great news.
- Use an assumptive close.
- Schedule the next appointment.
- Never put money ahead of people.
What car made the most Ford?
Ford Model T
Ford Model T Strictly looking at sales, it sold 16.5 million units in its 20-year run (1908-27). That alone makes it the most successful automobile ever produced (especially if you consider its massive market share in the period).
