Fewer repair orders, better cost controls for car dealers in 2018

The average U.S. light-vehicle dealership did a good job managing its fixed operations department last year.

That's one of the takeaways from figures on fixed ops performance released as part of the National Automobile Dealers Association's NADA Data 2018 report.

Consider: In 2017, total repair orders written by that average dealership were flat, and so was the total parts inventory it carried — after both had risen at a double-digit clip the year before.

That dealership also added more technicians — with the total rising to 19 per store from 16 in 2016 and 15 in 2015 — which helped to boost total parts and service sales, despite the repair-order slowdown.

In addition, the total parts and service revenue per repair order for warranty work continued to outpace that for customer-pay work. A separate study suggests that consumers did a better job last year than in prior years of having minor check-engine work done promptly, before those minor problems became far more costly repairs.

According to NADA Data, the average dealership wrote 18,829 repair orders in 2017. That was down 0.3 percent from the prior year, following a 21 percent jump in 2016 from 2015.

And, showing good cost control, the average dealership held $390,960 in parts inventory last year, up a scant 0.5 percent from 2016, after climbing 17 percent in 2016 from 2015.

One possible reason for the slower increase for customer-mechanical parts sales may be that consumers were getting smaller problems fixed before they became bigger problems.

The 2018 CarMD Vehicle Health Index of check engine-related car repairs, costs and trends found that the average cost to repair a check engine light-based problem fell 10 percent in 2017, to $357. The costs included a 13 percent dip in labor charges, to $141, and an 8.1 percent reduction in parts costs, to $216.

"We are encouraged by the drop in check engine light repair costs and a lower percentage of costly catastrophic repairs, which is an indication that drivers across the country are taking car maintenance and check engine light repairs seriously and vehicles are becoming more reliable," said David Rich, CarMD's technical director.

Replacing the oxygen sensor, at an average cost of $238, remained the most common such repair, representing 5.9 percent of repairs prompted by the check-engine light.

But replacing the catalytic converter, at an expensive $1,271, dropped to No. 3 on the most-common repairs list, accounting for just 5.1 percent of those repairs, down from 6.5 percent a year earlier.

Meanwhile, replacing the evaporative emissions purge control valve, at a cost of $147, edged out replacing the mass air flow sensor, a $341 repair, as the fifth most-common such repair.