Recession boosts car repair business
1:00 pm
Thu May 7, 2009

Recession boosts car repair business

It's been well-publicized lately that Americans aren't buying new cars, choosing instead to ride the recession out in their current car. That's made things miserable lately for automakers and car dealers. Chrysler is in bankruptcy and Charlotte's Fortune 500 company Sonic Automotive is fighting to stay out. But for those who specialize in keeping those older cars on the road, it's actually meant a boost in business. WFAE's Scott Graf reports:

The latest numbers on vehicle sales show Americans are on track to buy fewer than 10 million new cars this year. That hasn't happened since 1970. That means more older cars on the road, and common sense says an older car needs more upkeep than a new one.

"We love a recession here at Car Care."

Neil DeGraff runs a AAA Car Care center in north Charlotte. Business has been great lately, and DeGraff attributes it to the poor economy. He says people are taking better care of what they have - and that means paying more attention to car maintenance than they used to.

"It was not on their agenda," he says. "Banks were handing out money, just get another car. Manufacturers are slowing down. Big Three are running out of money. Banks are not loaning it. So now there's more broken on these cars because it's been neglected for so long."

DeGraff says a few of the cars he's seen lately are too far gone and can't be fixed. But he points to a Ford Taurus sitting in a hoist that is salvageable. He says its owner went too long between oil changes and now it needs a new engine. That's expensive, but DeGraff says it makes sense.

"Overall the car's structural integrity is in great shape. The body's in great shape, the interior is in great shape. It's treated them well. And this will get them where they need to be."

Last week, DeGraff told customer Alan Threatt his 2002 Chevy Suburban needed nearly $2,000 worth of work on the electronics that control his braking system. Threatt, who says the car is paid for, okayed the repair.

"Because a new car would be up $30,000 or 40,000," he says, " and I'd be paying for it for the next five years, when I can pay for this one in one week."

AAA Carolinas says as the economy has faltered, its 22 repair shops have seen more customers. Tom Crosby is a AAA spokesman. He says the decision to invest in their older cars is a sign that people see a new car as just too big of an investment right now.

"If you keep your old car, you may have had it paid off, then you're just paying for the maintenance," Crosby says. " If it runs well, a comfortable vehicle, why trade it in? It's no longer keeping up with the Joneses, it's just keeping ahead of the economy."

Here's another example. Crosby says oil changes were up 30% in the first three months of the year, compared to last year.

In Mooresville, John Bland owns a transmission shop called "All-Tranz". His bottom line is up about 15%. But the number of cars is up by 40%. Bland says he's doing a lot of basic, preventative maintenance like oil changes and transmission flushes. And lately, Bland says when faced with the prospect of a $2,500 transmission rebuild, a lot of his customers say the same thing: Fix it.

"They're not gonna trade their car," says Bland. "They bought these cars when there was zero down, no interest. They normally traded in a vehicle that they were already upside down in. So now they're 3 times upside down in a car and they're just not trading the cars in. They can't."

The recession has also been good to stores that sell the replacement parts people like Bland need to put a car back together. Missouri-based O'Reilly Auto Parts last week reported an increase in first quarter earnings of 36%. John Ramsey manages the O'Reilly store in Mooresville. He's selling more parts to repair shops, he says, and shade tree mechanics looking to do the job themselves. And, Ramsey says, it's not just the 'must-have' parts like brakes and alternators, but a lot of non-essentials too.

"Now you see more people actually buying wheel cleaners, and waxes and stuff, that was kind of a dying business kind of coming back up. Because they're not trading them off. They want to keep them looking new. So they're actually keeping 'em cleaner now."

And as long as the rest of the economy sputters, the prospects for those in the auto repair industry, appear to be bright.

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