Average Repair Order for an Auto Shop, and 4 Other Weekly Numbers
By Mecano Team · Published· Last reviewed · 9 min read
The average repair order (ARO) is your total repair order sales divided by the number of repair orders closed in the same period. It is one of five numbers worth checking every week, alongside car count, effective labour rate, gross profit on parts and comeback rate. Together they take about fifteen minutes to review and tell you whether the shop is busy, priced well, profitable on parts and doing the work right.
What are the five weekly numbers and their formulas?
| Number | One-line formula |
|---|---|
| ARO (average repair order) | Total repair order sales ÷ repair orders closed |
| Car count | Vehicles (or repair orders) opened or closed in the week; pick one and stay with it |
| Effective labour rate | Labour sales ÷ labour hours billed (define the hours once, see below) |
| Gross profit on parts | Parts sales − parts cost, shown in dollars and as % of parts sales |
| Comeback rate | Comeback repair orders ÷ repair orders closed |
All dollar figures below are in CAD. Every worked example is illustrative: the numbers are made up to show the arithmetic and are not benchmarks. This post cites no industry averages on purpose. Your own trend is a better yardstick than anyone else’s number.
1. What is the average repair order (ARO) for an auto shop?
Definition. ARO is what a typical closed repair order is worth in sales.
Formula. ARO = total repair order sales ÷ number of repair orders closed.
Illustrative example. For example, assuming a shop closes 60 repair orders in a week with $21,000 in total sales (parts, labour and shop fees, before tax), ARO is $21,000 ÷ 60 = $350.
Where it comes from. The invoices closed in the week. Use pre-tax sales, otherwise GST/HST/PST inflates the number and makes you look better than you are.
Question to ask. “Did ARO move because of what we recommended, or because of what we happened to get?” A week with two engine jobs and a lot of oil changes can look the same on paper as a week of steady mid-size repairs, so check the spread, not just the average.
Two cautions. First, ARO is an average, so a few large jobs hide a lot of small ones. Second, a high ARO with a falling car count may mean you are doing fewer, bigger jobs and losing the routine work that fills the bays. Which of those is true is a decision for you, not the number.
2. What is car count?
Definition. Car count is how many vehicles the shop serves in a week.
Formula. Car count = vehicles with a repair order opened (or closed) in the week. Choose one rule and keep it. If you sometimes count vehicles and sometimes count repair orders, your trend line will lie.
Illustrative example. For example, assuming 60 repair orders closed this week against 68 last week, car count is down 8, or about 12%. With ARO unchanged at $350, that is roughly $2,800 less in weekly sales ($350 × 8).
Where it comes from. The count of repair orders or work orders in your system, or the count on your whiteboard if you are not on software yet.
Question to ask. “Where did the missing cars go: fewer new customers, fewer repeat customers, or more no-shows and declined appointments?” The answer sends you to different fixes, from reminders to your phone handling to your estimate follow-up.
Sales are, in the simplest terms, car count multiplied by ARO. That is why these two sit side by side: a change in either one moves revenue, and you want to know which.
3. What is effective labour rate?
Definition. Effective labour rate (ELR) is the dollar amount of labour you actually collect per hour, as opposed to the posted rate on your sign.
Formula. ELR = labour sales ÷ hours billed. Be explicit about which hours. Many shops use hours billed to customers (flat-rate or book hours sold). Some also track labour sales ÷ clock hours worked by techs, which blends in efficiency. Pick one definition, write it down, and use it every week. See labour rate vs effective labour rate for a longer treatment.
Illustrative example. For example, assuming a posted rate of $150 an hour, and in one week $9,000 of labour sales on 72 hours billed, ELR is $9,000 ÷ 72 = $125. The shop discounted, rounded down, or gave away time worth $25 an hour on average, which is $1,800 over those 72 hours.
Where it comes from. Labour lines on closed invoices, and the hours attached to them.
Question to ask. “Where did the $25 go?” Typical leaks are discounts at the counter, a menu price that was set below the posted rate, jobs quoted on book time that ran long and were not re-quoted, and no-charge diagnostic time.
4. What is gross profit on parts?
Definition. Gross profit is sales minus the direct cost of what you sold. Accounting references define it as revenue minus cost of goods sold: Xero gives “Gross profit = Revenue - Cost of goods sold (COGS)” and a margin of gross profit divided by revenue, times 100, and Square Canada gives revenue less cost of goods sold and cost of revenue, with the same margin formula (both re-read 2026-10-31). For this weekly check we apply it to parts only, so you can see what your parts pricing is doing. Shop-wide gross profit, which also deducts technician pay, is a separate and equally useful number your accountant can help you define.
Formula. Gross profit on parts = parts sales − parts cost. Gross profit margin % = gross profit ÷ parts sales. Do not mix this up with markup, which divides by cost.
Illustrative example. For example, assuming $8,000 of parts sales in a week on parts that cost $5,200, gross profit is $2,800. Margin is $2,800 ÷ $8,000 = 35%. Markup on cost is $2,800 ÷ $5,200, about 54%. A 35% margin and a 54% markup describe the same dollars, which is why people talk past each other when they do not say which they mean.
Where it comes from. Parts sales on invoices, and the cost on supplier invoices or your inventory cost field. Include shipping, core charges and any supplier credits that belong to the job, or you will overstate the result.
Question to ask. “Which parts lines made the least gross profit, and was that on purpose?” Brake pads sold at list because nobody updated a price matrix is a very different story from a deliberate low price on a loyalty customer’s tires.
5. What is a comeback rate?
Definition. A comeback is a vehicle that returns for the same problem you have already charged to fix. Comeback rate is how often that happens.
Formula. Comeback rate = comeback repair orders ÷ repair orders closed, in the same week or rolling four-week window.
Illustrative example. For example, assuming 3 comebacks among 60 closed repair orders, the comeback rate is 3 ÷ 60 = 5%. Assuming each one eats 1.5 hours of unpaid tech time and $40 of parts, the cost is about 4.5 unpaid hours and $120 in parts, before you count the customer’s patience.
Where it comes from. Repair orders that you flag as a return on the same complaint. This one needs a written rule. For example: same vehicle, same complaint, within 30 days. Without a rule, comebacks get argued about instead of counted.
Question to ask. “Is this a pattern: one tech, one type of job, one parts supplier, or a rushed diagnosis?” Three comebacks in a week matter less than three comebacks on the same job type.
How do you read the five numbers together?
No number is good or bad on its own. Use this as a starting point for where to look.
| If this is down or up | Look here first |
|---|---|
| Car count down | Phone answering and missed calls, appointment no-shows, reminders and follow-ups, recent comebacks, season |
| ARO down | Mix of jobs (more small jobs), declined work, how inspection findings are presented, discounting |
| ARO up, car count down | Whether routine work is being lost, whether the shop is turning away small jobs, customer retention |
| Effective labour rate down | Discounts, menu prices below the posted rate, quotes not updated after the job grew, free diagnostic time |
| Gross profit on parts down | Price matrix out of date, supplier cost increases not passed on, parts quoted before cost was known |
| Comeback rate up | Diagnosis time, one tech or job type, parts quality, missing final check |
The pattern to watch for is a number that looks fine while another one quietly slips. A rising ARO that comes with a falling effective labour rate usually means you are selling more but giving more away.
What is a 15-minute Monday routine for the five numbers?
- Minutes 0-3: pull the week. Get closed repair orders, total sales (pre-tax), labour sales, labour hours billed, parts sales and parts cost for last week.
- Minutes 3-7: do the five formulas. Write them in the same place every week, next to last week and the four-week average.
- Minutes 7-10: circle one. Pick the single number that moved most against your own trend. Do not try to fix five things.
- Minutes 10-13: find three example invoices. Open three repair orders that explain the move. Numbers tell you where to look; invoices tell you why.
- Minutes 13-15: one action. Write one change for this week, for example “call all declined brake estimates from last week” or “update the pad price matrix.”
Keep it to one page. If it takes longer than 15 minutes, your data is not in one place yet, and that is the first thing to fix.
How do you calculate the five numbers in a spreadsheet?
You do not need special software. Paste this into a spreadsheet, one row per week, and fill in the first eight columns (week through comebacks). The last five columns are formulas.
week,ro_closed,total_sales,labour_sales,hours_billed,parts_sales,parts_cost,comebacks,aro,effective_labour_rate,parts_gross_profit,parts_margin_pct,comeback_rate_pct
2026-W01,60,21000,9000,72,8000,5200,3,=C2/B2,=D2/E2,=F2-G2,=(F2-G2)/F2*100,=H2/B2*100The sample row reuses the illustrative numbers from this post. Replace them with yours. The shop-level number to add later is car count, which is simply the ro_closed column if you count repair orders.
Glossary of related terms
- Technician efficiency: hours billed to customers divided by hours the tech actually worked on those jobs. Above 100% means the tech beat book time.
- Technician productivity (or utilisation): hours worked on repair orders divided by hours the tech was clocked in. It shows how much paid time had a job attached.
- DVI (digital vehicle inspection): an inspection recorded with photos, notes and condition ratings, usually shared with the customer to support recommended work. See DVI to approved work without pressure.
- Matrix pricing: a price table where the markup on a part changes with its cost, for example a higher percentage on cheap parts and a lower one on expensive parts, so margin stays sensible across the range.
- Margin versus markup: margin is gross profit divided by selling price; markup is gross profit divided by cost.
Where should you go next?
If the labour numbers puzzled you, read labour rate vs effective labour rate. If you are deciding whether software could make these numbers easier to pull, read how to choose auto repair shop management software. If missed calls may be behind a falling car count, see AI for auto repair shops: what it can and cannot do for a missed-call formula you can fill with your own numbers. Tax on each invoice is covered in GST, HST and PST by province.
Mecano Shop is built around the board, estimates, inspections, texting and pay links, so the work that produces these numbers lives in one place. You can see what it covers on the home page. The formulas above work with a spreadsheet, a whiteboard or any shop system.
Assumptions
- All examples are illustrative, in CAD, and made up to show arithmetic. They are not benchmarks, averages or claims about any real shop.
- Sales figures are before tax. Sales tax (GST/HST/PST) varies by province and changes; check current rules with the CRA or your provincial authority and your accountant.
- Definitions of car count and comeback vary between shops. The ones here are working definitions; adopt a written version of your own and apply it consistently.
- Gross profit definitions follow general accounting usage. Your accountant may treat shop supplies, sublet work and core charges differently.
Related reading
- Auto Repair Comeback Policy: How to Handle Warranty Claims
- Winter Tire Changeover Shop GTA Playbook: Capacity, Pricing and Storage
- How Do You Reduce No-Shows at an Auto Repair Shop? Reminders, Deposits and Texting Consent
- Mecano Shop facts: plans, features and limits
Sources
Last reviewed: 2026-10-31. Written by the Mecano Team.
Frequently asked questions
- What is the average repair order (ARO) in an auto shop?
- ARO is total repair order sales in a period divided by the number of repair orders closed in that period. It tells you how much a typical visit is worth, before you consider what it cost you to deliver.
- How often should a shop owner check ARO and car count?
- Weekly is enough for most independent shops. Daily numbers swing too much on a small base, while monthly numbers arrive too late to fix a slow week.
- Is a higher ARO always better?
- No. ARO can rise because you sold a few large jobs while car count fell, or because you pushed work customers declined later. Read it next to car count, gross profit and comebacks.
- What is the difference between gross profit on parts and parts margin?
- Gross profit is the dollar amount left after parts cost. Margin is that amount as a percentage of the selling price. Markup is the same amount as a percentage of cost, so the three are not interchangeable.
- What counts as a comeback?
- A comeback is a vehicle that returns for the same problem you already charged to fix. Decide your own written rule, for example a return within 30 days for the same complaint, and apply it the same way every week.
Sources
- Xero, What is gross profit? (xero.com)
- Square Canada, What is gross profit? (squareup.com)
Last reviewed November 2, 2026 by the Mecano Team. Figures are sourced above or labelled as illustrative examples. Not legal, tax or accounting advice; check current rules.