Car repair services thrive in tough economy

January 6, 2009 12:10:00 AM PST
We all know the slowed-sales are hurrying car-makers, but the people who repair cars are doing OK. Now, people are following the trend to repair, rather than replace.

Csilla Maximovitch drives a 1988 Toyota Camry and her husband's 1995 Isuzu Rodeo has an oil leak. It's about that time to buy a new car.

"Right now we feel it's still better to maintain it," said Csilla Maximovitch, a car owner.

Dan Chin's Auto Service in Berkeley is one of many repair shops across the country that is thriving in this recession.

"Because it is costly. It's always way over $1,000. But still I do believe we do not have the monthly payments we would have to pay when we have a new car," said Maximovitch.

J.D. Power and Associates estimates about two-thirds of the decline in retail auto sales is due to consumers delaying purchases and maintaining their old cars. Even luxury car owners are choosing to repair instead of replace.

"So if a person has a car worth $5,000 to $10,000, then a $4,000 or $5,000 overhaul is a big deal. But people seem to be stepping up and spending that kind of money right now," said Alan Hardy, from H&B Specialists.

Also, at the end of a car's warranty, people are realizing the full cost of dealership service.

In some cases, customers from dealerships are literally walking across the street to get their cars repaired at a cheaper price.

"And they give us a call and find out for the same job we can do it for almost $200 cheaper. Then they start coming to us," said Rody Wong, the General Manager from Dan Chin's Auto Service.

Dealerships have a higher overhead so their labor rates are about $120 per hour compared to about $90 an hour at independent repair shops. Auto experts say the tendency is to repair instead of replace in hopes of riding out the recession.