The “new normal” among consumers is to make due with automobiles long after they’ve lost that new car smell. Plenty of drivers plan on sticking with their aging cars well past the six-figure mileage marker, until they can’t be driven any more. That’s bad news for automakers and car dealerships, but has spelled rising revenues for mechanics and auto repair shops in the business of keeping old clunkers on the road.
Drivers just aren’t buying new cars like they used to. Last year, the vast majority of car owners said they planned on hanging onto their current vehicles for at least 50,000 more miles than their previous automobiles. Especially high auto prices over the past several months have also caused would-be car buyers to hold off on making purchases until better deals arrive.
Naturally, while consumers have prudently been avoiding big-ticket new car purchases, they’ve been more likely to spend smaller amounts in order to keep their old rides plugging along. The trend has meant that while most businesses have struggled through the past few years, auto repair shops have never been busier.
Last year, auto repair garages in the U.S. reported $36 billion in sales, according to estimates from the Automotive Aftermarket Industry Association. That’s up 10.5% from 2007.
Sales figures at auto repair shops are expected to rise another 5% this year.
In the same way that thrift stores are doing brisk business because consumers are less likely to be buying new clothes and home furnishings lately, garages specializing in repairs have been booming because consumers have been holding off on buying new cars. Americans bought around 16 million automobiles annually between 1999 and 2007. But in 2009, dealerships sold only 10.4 million new cars as unemployment remained stubbornly high and consumers sought ways to avoid large purchases. Sales remain slow this year, with 12.5 million new vehicles expected to be purchased by the end of 2011.
So long as economic growth remains stifled and drivers keep trying to get by with “good enough” vehicles rather than feeling the need for spotless, scratch-free, brand-spanking new cars, it should continue being a great time to be in the auto repair business.