Thanks to our partners Promotive, WickedFile, Maverick Shop Owners, and Overdryve

Your technicians got more productive in 2025. Your labor rate went up. Your parts margins improved. So why is the average shop owner keeping almost exactly the same percentage of every dollar as they did the year before?

The answer is hiding in your effective labor rate — and most shop owners haven't looked at it once.

In this episode, Hunt Demarest breaks down the headline findings from Paar Melis & Associates' 2026 Auto Shop Benchmark Report — the largest study of its kind, built from more than 200 real shop locations across the country. From average repair order trends to technician productivity, overhead creep, benefits adoption, pay structure breakdowns, shop management software rankings, and the labor rate shame list nobody wants to be on, this is the financial state-of-the-industry episode you didn't know you needed. And it's only Part One.

What You’ll Learn

(00:00) Intro — the 2026 Benchmark Report is live and how to get your free copy

(03:16) Who made this report possible — methodology, participation, and what Paar Melis clients get that nobody else does

(05:30) How to read benchmark numbers without misleading yourself — context, outliers, and the ARO trap

(13:15) Sales are up 10-11% — but how much of that is real production vs. a labor rate increase you already gave yourself?

(16:20) Productivity jumped from 47% to 55% — so why didn't net profit follow?

(18:30) Effective labor rate: the silent margin killer hiding in plain sight in 2025

(27:30) Benefits adoption hits an all-time high: 73% of shops now offer health insurance

(29:30) Retirement plans, tool reimbursement, Trump Accounts, and the fringe benefits arms race

(30:45) Four-day work weeks and non-cash comp — how shops are winning the talent war without raising base pay

(34:30) Good management makes money, not good pay plans

(36:30) 83% of shops are doing digital vehicle inspections — Hunt thought it would be closer to 100%

(37:30) Shop management software rankings: Tekmetric at 56%, Mitchell likely on the way out, Shopware and Protractor tied for third

(40:30) The labor rate shame list — 11% of shops haven't raised their rate in 18 months or more

If you're ready to stop guessing where your numbers stand, start benchmarking against 200+ real shops across the country, and finally understand why doing more work doesn't always mean making more money — this episode is essential listening.

Get the FREE 2026 Auto Shop Benchmark Report: https://hubs.ly/Q04j-grh0

Thanks to our partner, Promotive

Promotive has over 40 years of recruiting and automotive experience. If you need qualified technicians and service advisors and want to offload the heavy lifting, visit https://gopromotive.com/

Thanks to our partner, WickedFile

Turn chaos into clarity with WickedFile, the AI for auto repair shops. Transform invoices into insights, protect cash flow, and stop losing parts, cores, or credits to maximize your bottom line. visit https://info.wickedfile.com/

Thanks to our partner, Maverick Shop Owners

You're working on growing a more profitable shop - that's critical. That's exactly what the 24-video Blueprint course by Maverick Shop Owners addresses - customers, sales, profit, people, systems, and freedom. Get free access for our listeners only at https://maverickshopowners.com/blueprint

Thanks to our partner, Overdryve

Overdryve is your AI-powered marketing operating system. It predicts slow weeks before they happen, automatically launches revenue-driving campaigns, tracks ROI down to the dollar, and optimizes performance in real time. Visit https://overdryvemarketing.com/

Paar Melis and Associates – Accountants Specializing in Automotive Repair

Visit us Online: www.paarmelis.com

Email Hunt: podcast@paarmelis.com

Text Paar Melis @ 301-307-5413

Download a Copy of My Books Here:

The Automotive Repair Podcast Network: https://automotiverepairpodcastnetwork.com/

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