How do I read an auto repair shop’s labour, parts and tire sales?

A shop’s total sales hide a lot. Two shops with the same revenue can run very differently, depending on how much comes from skilled labour, how much from parts and how much from tires. As a buyer you want the split, because each line has its own costs, its own seasonality and its own risks. Reading it takes patience, but it tells you what the shop actually does well.

Billed hours against technician hours

Ask for the hours billed to customers and the hours technicians were paid. A gap is normal, since not every paid hour is sold. What matters is whether the gap is steady and whether the owner can explain it. Ask how flat-rate work is handled, who sets the labour rate and whether any technician is carrying more than their share.

Parts, rebates and sublet work

Ask how parts pricing is set and how supplier rebates are recorded, because rebates can sit outside regular sales. Find out which suppliers the shop depends on and whether those accounts transfer to a new owner. Sublet work, such as alignments or machine work done elsewhere, should show as both a sale and a cost. Ask your accountant to confirm each is recorded cleanly.

Tire sales, comebacks and warranty

Tires often follow the seasons, so look at monthly figures instead of a yearly total. Then ask how often jobs return for redo or warranty and who pays when they do. A shop that tracks comebacks has usually thought about quality, and one that cannot say may not measure it. Ask to see any open warranty claims before closing.