How are Your Garage Prices Coping With these High Inflation Times.

Firstly let me say that I an just a regular guy from the UK who is the owner of a seven bay service centre/garage. I am not a financial expert. The dreaded inflation is upon us again. For the guys as old as me then this is nothing new. Back in the 70,s we had 15% inflation, but we all got by and lived for better trading days. Here in the UK we have always looked up to the USA because of your business prowess. So what do you guys look out as your worst enemy!

When prices are going up then I find that the gap opens between rich and the poor's disposable income. So this question will effect garage owners in different areas. My garage is in a poor area with many immigrant families who drive cars. So this means we have to be more flexible with pricing. Finding out if your customer can afford that service ! For this reason we devised a three tier service pricing structure. This has also the effect of not loosing your profit margins. 

The lowest price should include an oil and filter change and a general vehicle check over. This way we find the customer will perhaps be able to afford a service and your profit margins wont drop. This is just one small idea that we carry out! What do you guys do in these times of high inflation ? 

On 9/12/2022 at 12:57 AM, Eric Roberts said:

My garage is in a poor area with many immigrant families who drive cars. So this means we have to be more flexible with pricing.

Well, if your poor are anything like my poor, it's a priority issue.   The iPhone 14 just came out and I can't be seen in the soup line with an iPhone 13.  What would people think?    They have disposable income, it's a matter of how it is disposed of.   I find most low income people spend WAY more than I do.  I'd never pay the outrageous costs for Door Dash, but some of my lowest paid employees will do this often.   They could drive the 1 mile themselves and save an hour's wages in the process.  They could use my refrigerator make or bring their lunches. 

Snide marks aside, I do have a number of low income people who value their car as an important means for their survival.   They want good service and will prioritize it.   Granted, this is a small percentage. 

How are we dealing with inflation?   Markup and rate increases.  We have to survive.   All costs are inevitably passed onto the consumer.   Redirect their ire at their inflation loving politicians.

We offer financing plans thru 3rd party vendors for some people if it helps them (3/6 months same as cash).

Coming into 2022 we were able to see the direction inflation was going. I scheduled quarterly labor rate increases of 2.5% this year. I also scheduled 10 1% increases for pay across the board for the staff. It was not a "pay raise". It was just trying to keep even with inflation. A cost of living adjustment. It was recognized and appreciated by the staff. The unfortunate part is that it probably is not enough. Our inflation is calculated differently that it was in 1979+.  Currently energy and food increases are left out of the cost of living. How can you live without energy and food? I believe from my observation our actual inflation rate is 15%.

The good news is the no one has complained about the rate increases and business seems to be holding up well. Our market is higher end Euro and Asian products.

Regards to all

Mike