Declining car sales providing boost to auto repair shops

Declining automobile sales present an upside to business for John Sain, president of National Auto Service Center in Las Vegas.

If people aren’t buying new cars, they’re probably keeping their old cars, hoping they go the extra miles.

New-car sales declined for every major automobile manufacturer in 2008, a result of recessionary times, low consumer confidence and a tight credit market, among other things.

Dealerships such as Bill Heard Chevrolet in Las Vegas were forced to close.

In a blitz to clear year-end inventory, GM dealers are offering zero percent financing with no payments until 2010 and cash rebates. Centennial Hyundai is throwing in a $2,000 shopping spree.

So, is it out with the old and in with the new?

“What we hoped it would mean is people will hold on to their cars,” said Chris Publow, manager of Ted Wiens Complete Auto Service stores in Las Vegas. “In the early ’90s, people started to hold their cars for more years, something like seven or nine years. Of course, when the economy gets better, people swap cars and increase their debt.”

Cars and trucks continue to break down at the same dispiriting rate, always at a frustrating time, regardless of the state of the economy.

Some people don’t have the option of buying a replacement vehicle. They’re forced to make repairs rather than take on a big monthly payment. That makes automotive repair shops a little more recession-proof than the 20,000 car and truck dealerships in America.

“Business has been a little better than the last two years,” said Sain, owner of National Auto Service Center since 2004. “People still have to get their cars fixed. They can’t buy (new) because their credit is shot and they don’t want to create more payments and insurance is high.”

Consumers have become acutely aware of car costs, watching expenses more closely than ever, Publow said. He’s seen the repair side of Ted Wiens’ business hold up better than other aspects, such as tire sales.

“People can’t pay $400 for a set of tires, but a leak in the radiator ... I’ve got to get that fixed,” he said. “People are hesitant to spend for preventive maintenance. They may push their 25,000-mile service to 30,000, or oil changes from three months to four or five months because they’re not driving as much.”

They might turn in their leased automobile and live without it or downsize the family fleet from three cars to two, Publow said. That takes away from new-car sales.

Gasoline prices also affect the auto repair business, Sain said. Now that prices have receded — they averaged $1.79 a gallon locally on Tuesday according to AAA — people are driving more, which requires more maintenance, he said.

The cost for the same repair might vary greatly from one shop to another, so it’s advisable to get more than one written estimate.

“It’s very competitive,” Sain said. “Your business depends on your honesty and integrity and keeping the price down to a minimum and doing the job right so people come back.”

The U.S. auto repair shop industry includes about 170,000 companies with combined annual revenue of $90 billion, according to Hoovers.com. About 70 percent of industry revenue comes from mechanical repair and 30 percent comes from collision repair.

Automotive repair shops employed 683,640 workers in 2001, according to the latest statistics from the U.S. Census Bureau, at an average wage of $14.79 an hour.

Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491.