Industry
Average repair order (ARO)
Average repair order is the average revenue an auto repair shop earns per repair order in a period.
ARO = Total repair order revenue ÷ Number of repair orders
Worked example
| Repair order revenue for the month | $180,000 |
| Repair orders for the month | 400 |
$180,000 ÷ 400 = $450
Why it matters
With car count, ARO drives almost all of a shop’s revenue. Small changes in inspection quality or how work is presented move ARO more than most marketing does.
Common mistakes
Where it misleads
Mixing in no-charge or warranty orders, which pull the average down without meaning much.
Comparing shops with very different work mixes, such as quick service against heavy repair.
Watching ARO without car count: ARO can rise simply because fewer small jobs came in.
Related terms
Keep reading
- Gross marginGross margin is the share of revenue left after paying the direct costs of delivering what you sold.
- Budget vs actualBudget vs actual compares what happened in a period with what was planned, line by line, to show where the business is ahead of or behind its plan.
Stop calculating it by hand.
Dear CFO keeps your statements, forecasts and metrics current from the systems you already run.