Total hours and repair orders increased across the industry, with rural areas seeing the largest increase in hours, and those using technology to boost productivity and efficiency outpacing those behind the curve.
Driving the news: Reynolds and Reynolds’ Fixed Operation Golden Metrics 2026 report looked at hours, effective labor rates, and profit per customer pay repair order, with additional breakdowns based on the location of the shop and volume.
Total hours sold increased 6.1% in rural dealerships to 519.85 per month, while urban dealerships saw an increase of 0.7% to 1,625.11 hours per month.
Shops with fewer than 300 ROs per month averaged 416 hours, while those with more than 1,200 ROs averaged 3,042 hours.
Notably, in the first half of 2026, March had the most hours in three of the four urban classifications, with community areas being slightly behind April, and hours per RO increasing year over year in community and rural areas.
Zooming in: The effective labor rate ranged from $128.15 in rural areas to $173.08 in the major urban areas.
Additionally, small shops saw an increase in the ELR by $6.19 to $143.28, and larger shops saw a $5.86 increase to $160.84.
The profit per RO ran from $252.15 in rural areas to $391.23 in major urban areas and from $255.03 in the largest high-volume stores to $389.74 in the small-volume shops.
And, nearly all areas saw a lift in customer pay ROs between February and April.
“The big jump, especially in the rural areas, stood out. You’re up 6% in hours… profit per hour up a little over 12%,” said Greg Uland, vice president of marketing for Reynolds and Reynolds. “Those rural dealers are certainly thriving.”
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Impact of technology: The report also compared dealerships utilizing AI and software for automating processes, including determining parts availability and costs and providing quotes, with those that not using said those tools.
According to the findings, the smallest shops using a solution saw a $20.73 increase in effective labor rate and $103.47 more in customer pay per repair order, bringing in $15,520 extra per month on 150 jobs.
For the largest shops, the effective labor rate was $5.35 higher, and profit per repair order was $38.54 higher, adding up to an additional $46,248 per month on 1,200 jobs.
“The effective labor rate and parts pricing are really driving revenue growth for dealers, and having those tools in place to help do those two things can have a big impact,” Uland said.
The takeaway: Labor charges increased in the past year, but Reynolds and Reynolds points out that this may not be the answer long-term with consumers, noting the need for continued efficiency.
“For the last 15 years or so, our effective labor rates have continued to go up. There’s fundamentally nothing wrong with that, but you would expect at some point for that price elasticity to kick in, and us find a ceiling,” Uland said. “That means we’re going to have to make the most of every opportunity that a dealer has… It’s very clear that every KPI, every metric increases when dealers are using software to help their technicians and their advisers quote work.”
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