Brake service: Guess what can add $60,000 per year to your bottom line?
What independent tire dealership doesn't offer brake service? Well, there are a few, but not many. Of the 26,000 dealers in the United States, 93% offer brake service. That's 24,180 outlets.
Compared to other non-tire-related services, brake work is offered by more dealers than any other automotive service.
Exactly how beneficial can the service itself be to your business once on- or off-car brake lathes have been purchased and your technicians have been properly trained? Modern Tire Dealer's 2007 Automotive Service Survey has the answers.
The average brake service ticket price is $212, lower than other under-car services but generally more profitable.
Compared to 2003, the average ticket price for brake service is up 32.5%. The number of jobs per month (from 35 to 43) and profit margin (51% to 55%) also has increased.
Based on the average number of brake jobs per month, brake service accounts for an average of more than $9,000 a month in gross revenue. The average profit margin per brake job per dealership is 55%. Multiply that by gross revenue and the average monthly profit potential is close to $5,000, or $60,000 a year.
Of the top 10 pieces of equipment owned, off-car brake lathes are the sixth most popular. They can be found in 78% of all dealerships. On-car brake lathes are owned by 35% of the dealers (some own both types).
When dealers were asked if they planned to purchase or lease an on-car brake lathe in 2007, 6% of the respondents to our survey said yes; 2% said they planned to purchase or lease an off-car brake lathe.
Providing under-car and under-hood automotive services is more important than ever. The average age of all vehicles serviced by respondents is 5.3 years. However, the average age was eight years or greater according to 22% of the independent tire dealers surveyed.
Best Practice Tips: By the numbers
Here's an idea of what the average independent tire dealership earns annually by performing brake service. How does your service department compare?
Number of jobs/month: 43
Average ticket price: $212
Monthly gross revenue: $9,116
Average profit margin: 55%
Monthly net profit: $5,014
Yearly profit: $60,168
Source: 2007 MTD Automotive Service Survey