Auto Body Shops
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 31,700 auto body shops in the US provide structural and interior repair, paint, and customization services for vehicles, such as passenger cars, trucks, vans, and trailer bodies. Major customers are insurers, vehicle owners, and auto dealerships. Some auto body shops are members of insurers’ Direct Repair Programs (DRP) and receive referrals from insurers whose clients have filed damage claims.
Increasing Technological Complexity
The technological complexity of modern vehicles creates operational challenges for body shops.
Collision Claims Stabilize, Severity Rises
While the incidence of collision damage insurance claims has remained steady over the last few years, the severity of claims has risen.
Industry size & Structure
The average auto body shop operates out of a single location, employs less than 9 workers, and generates $1.7 million annually.
- The auto body shop industry consists of about 31,700 firms that employ about 261,000 workers and generate $54.4 billion annually.
- The industry is highly fragmented; the top 50 companies account for 20% of industry revenue.
- The industry includes multiple location operators (MLO)/multiple shop operators (MSO)/chains, franchises, and independent operators. In 2019, independent shops accounted for 54.1% of total body work sales, while chains and franchises accounted for 26.6% (car dealerships accounted for the remainder).
- Large firms include Caliber Collision, Gerber Collision & Glass, and Service King. Large franchises include Fix Auto USA and Driven Brands (CARSTAR, Maaco).
Industry Forecast
Auto Body Shops Industry Growth
Recent Developments
Mar 19, 2025 - Auto Repair Prices Up Amid Tariff Fears
- The Producer Price Index for auto repair and maintenance rose 6.27% in December 2024 year over year - per the US Bureau of Labor Statistics - continuing a steady upward trend amid tariff-related supply problems and increased vehicle complexity. According to an analysis on single-digit tariff ranges by the the Insurance Information Institute, Trump’s levies on North American trade partners could raise prices on auto parts by as much as 7.7% above inflation. (Double-digit tariffs would be even higher.) With six out of every 10 replacement parts sourced from either Canada or Mexico (per the American Property Casualty Association), extended tariff battles will drive up auto repair costs even higher. Importers are already scrambling to stockpile parts and adjust shipping schedules. Shops could cut costs if labor became cheaper or if they finish jobs quicker, but the increased complexity of today’s computerized automobiles makes that unlikely.
- Automotive right to repair laws gained a courtroom victory in February 2025 when a federal court dismissed a lawsuit by the lobby group Alliance for Automotive Innovation to strike down a Massachusetts repair law approved by voters in 2020. Modern day cars have essentially become rolling computers that constantly collect telematics - performance data that is stored on-board and can help mechanics diagnose and fix problems. Telematics is critical to repairing new cars but automakers are reluctant to share the data with non-dealer repair shops and potentially lose out on maintenance revenue. The Massachusetts law requires manufacturers to create a telematics database and share it with independent repair shops, which handle about 70% of post-warranty repairs. A similar law in Maine went into effect in early 2025, and is also being challenged in court, but the right to repair movement is growing in popularity with consumers.
- The increasing technical complexity of new automobiles is adding time and costs to auto repairs, according to automotive software maker Mitchell International. Overall auto accident insurance claims were down last year due to a milder winter with less hazardous conditions and the growing use of collision avoidance systems in cars. Volume might be down, but total loss claim volume has risen because cars are becoming harder to repair as they age and this can force consumers back into the market if repairs prove too costly. Today’s cars are a complicated mixture of components such as aluminum, composite materials, small individual parts, and technology systems. According to Mitchell, repair claims that need replacement parts grew in the US by 15% from 2019-2024, and now parts account for 51% of repair costs.
- Car repair costs grew nearly 30% in the past three years due to inflation and new technology in newer vehicles, according to a recent report in the Wall Street Journal. Specifically, the complexity of sensors and computers in newer vehicles requires additional costs and labor to fix. The average repair cost for an insurance claim in the second quarter of 2024 was $4,721, about $800 higher than three years ago. The report noted that replacing a side-view mirror on a 2020 car can range from $1,200 to $1,500 due to the addition of sensors for lane-change assistance and a heating component, compared to a $200 to $400 cost for a 2013 car. According to experts in the report, a typical car had about 10 to 30 onboard computer modules a decade ago, compared to 75 or more today. Tech-aided safety features such as blind-spot monitoring and automatic emergency braking have reduced minor and major collisions and raised the cost of repairs with the recalibration of the advanced driver assistance system (ADAS) required after some accidents. About 26% of repairs associated with insurance claims have included recalibrating sensors, up 5% in 2024 compared to 2022, per the report.
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