Auto Repair Shops, Garages Industry Terminology

ARO (Average Repair Order)

The average revenue collected per closed repair order. Calculated as total sales divided by the number of ROs; a key profitability and pricing-mix indicator.

Our ARO moved from $485 to $620 after adding DVIs; Target an ARO of $700+ on European makes; Lower ARO this week suggests we sold too many oil changes without add-ons.

ASE (Automotive Service Excellence)

U.S. certification body that validates technician knowledge across specialties; shops use ASE credentials for hiring, pay plans, and marketing credibility.

We’ll reimburse techs for ASE A5 and A8; Hire an ASE Master to lead diagnostics; Display ASE certifications at the front counter.

Bay Utilization

Percent of available bay time occupied by vehicles actively being serviced. Core capacity metric tied to scheduling and throughput.

We’re at 78% bay utilization—aim for 85%+; Alignments block a bay too long—stagger scheduling; Add a quick-lube bay to lift utilization.

Brake Lathe

Equipment that resurfaces brake rotors/drums to correct thickness variation and runout; may be on-car or bench style.

Machine front rotors on the on-car lathe; Decide replace vs resurface based on thickness and runout; Train new techs on lathe safety and finish specs.

CAN Bus (Controller Area Network)

Automotive network protocol connecting control modules for robust, real-time communication; critical in diagnostics and module interaction.

Diagnose U-codes indicating CAN communication loss; Verify 60Ω across CAN with the ignition off; Use a scope to view CAN high/low waveforms.

COGS (Cost of Goods Sold)

Direct costs tied to sales, typically parts cost and sublet; used to compute gross profit. Treatment of technician wages varies by accounting policy.

Parts COGS ran 52%—we need better pricing; Technician direct labor often booked as cost of sales; Sublet glass goes into COGS for that RO.

Digital Vehicle Inspection (DVI)

Digital, photo/video-backed inspection shared with customers to increase transparency, trust, and ARO.

DVI photos boosted approval rate; Text the DVI link to the customer; Red/Yellow/Green findings help educate not pressure.

DTC (Diagnostic Trouble Code)

Standardized or manufacturer-specific fault codes stored by control modules indicating detected issues; retrieved via scan tool.

Pulled P0300 random misfire; Pending codes not yet mature; Clear DTCs only after verifying the root cause.

ECU Reflash/Programming

Updating a module’s software or calibration to fix issues or add features; done via pass-thru or OEM tools following strict procedures.

Perform PCM reflash per TSB using J2534; Maintain battery support during programming; Purchase a 3-day OEM subscription for calibration files.

Estimate (Repair Estimate)

An itemized projection of parts, labor, and fees for a repair; sets expectations and obtains customer approval.

Customer pre-authorized up to $400; Line-item estimate shows parts, labor, fees; Add notes on diagnostic uncertainty and re-checks.

First-Time Fix Rate (FTF)

Share of jobs resolved without comebacks or additional visits; indicator of diagnostic accuracy and quality control.

Our FTF dropped after two comebacks; DVI checklists improved FTF; Track parts accuracy to support FTF gains.

Flat Rate (Labor System)

Compensation/billing model where jobs have set labor times; technician earnings relate to billed hours versus clocked hours.

The book pays 3.5 hours for that clutch; A 120% efficiency tech bills 9.6 hours in an 8-hour day; Effective rate differs from posted door rate.

GDI (Gasoline Direct Injection)

Fuel delivery system injecting gasoline directly into the combustion chamber; offers efficiency with unique maintenance and diagnostic needs.

Recommend intake valve cleaning for GDI at 60k; Diagnose low-pressure vs high-pressure fuel side; Watch for LSPI on turbo GDI engines.

Gross Profit (GP)

Sales minus COGS (by category like parts and labor). Core profitability metric guiding pricing and purchasing strategies.

Parts GP at 52%—on target; Labor GP improves by controlling tech cost and efficiency; Blend GP across good-better-best parts.

HVAC (Heating, Ventilation, and Air Conditioning)

Systems managing cabin temperature and airflow; includes compressor, evaporator, heater, blend doors, sensors, and controls.

Confirm blend door actuation with a scan tool; AC recharge after leak repair and vacuum hold; Calibrate the sunload sensor on reassembly.

Hybrid High-Voltage Disable Procedure

Safety-critical steps to de-energize hybrid/EV high-voltage systems before service; always follow OEM procedures and safety gear requirements.

Follow OEM HV disable before any orange-cable work; Use insulated gloves and verify zero potential; Tag-out the service plug during repair.

Inspection, Multipoint

Structured vehicle health check covering safety and maintenance items; often standardized to drive education and approvals.

50-point inspection with photos; Note green/yellow/red to prioritize; Tie findings to OEM maintenance schedules.

Inventory Turnover

How many times inventory is sold and replenished in a period; higher turns reduce carrying costs and obsolescence.

Raise turns by reducing slow-moving filters; Count turns separately for fasteners vs electronics; Return dead stock to vendors.

J2534 Pass-Thru Programming

A SAE standard allowing aftermarket devices to program or reflash ECUs with OEM software access and proper procedures.

Use J2534 for non-security PCM updates; Confirm tool firmware and drivers; Some brands still require OEM factory tools.

Job Costing

Allocating all direct costs to each repair to evaluate profitability at the RO level and identify process improvements.

Track actual parts cost vs quoted; Analyze labor hours billed vs invested; Review GP by job to coach advisors.

Key Drop (Night Drop)

After-hours vehicle intake system using secure drop boxes and forms to authorize initial diagnostics or work.

Customer used key drop for Monday open; Ensure envelopes collect contact and authorization; Video-monitor the drop box for security.

KPI (Key Performance Indicator)

Quantifiable measures of performance (e.g., ARO, GP%, productivity, close rate) used to monitor and improve operations.

Watch ARO, car count, GP%, and productivity; Weekly KPI huddle with advisor scorecards; Set KPI targets by service category.

Labor Rate

Posted hourly price for labor; may vary by job type. Distinct from tech pay rate and effective realized rate.

Our door rate is $165/hr; Effective rate fell due to discounts; Use a rate matrix for diagnostics vs maintenance.

Loaner Car Program

Providing courtesy vehicles to customers during longer repairs, governed by clear policies and risk controls.

Require proof of insurance and valid license; Limit mileage and fuel chargebacks; Track utilization to justify fleet size.

Maintenance Schedule (OEM)

Manufacturer-prescribed service intervals and tasks based on time, mileage, and operating conditions.

Severe-duty interval applies to rideshare; Use VIN-specific OEM schedule in your DVI; Recommend coolant service at the prescribed mileage.

MIL (Malfunction Indicator Lamp)

Dashboard warning commonly called the check engine light; indicates emissions-related faults detected by the ECU.

MIL flashing indicates misfire risk—advise immediate stop; MIL on but no drivability complaint—check readiness; MIL off yet pending codes exist.

NPS (Net Promoter Score)

Customer loyalty metric based on likelihood to recommend; correlates with retention and referral growth.

Send post-service NPS surveys; Turn promoters into Google reviews; Detractors trigger a same-day manager callback.

NVH (Noise, Vibration, and Harshness)

Subjective and objective measures of ride quality; diagnostics focus on sources like tires, bearings, mounts, and driveline.

Use chassis ears to isolate front-end NVH; Road force balance to cure highway vibration; Document NVH baseline on the QC drive.

OBD-II (On-Board Diagnostics II)

Standardized emissions diagnostics framework with a 16-pin port, DTCs, live data, and readiness monitors.

Check mode 6 data before clearing codes; Verify readiness monitors before state inspection; Use freeze-frame to see failure context.

OEM vs Aftermarket Parts

Sourcing decision between original manufacturer parts and third-party alternatives; affects fit, function, cost, and warranty.

Choose OEM for complex modules; Aftermarket pads with better dust control; Discuss warranty and availability trade-offs.

Parts Gross Profit (PGP)

Gross profit earned on parts sales (sale price minus cost). A primary margin driver alongside labor GP.

Target 50% PGP on maintenance items; Use a parts matrix to protect PGP; Sublet parts affect blended PGP.

Preventive Maintenance (PM)

Planned services to prevent failures and preserve performance; typically based on OEM schedules and operating conditions.

Sell brake fluid exchange at 2 years; Bundle PM items to lift ARO; Educate on severe-service intervals for short-trip driving.

Quality Control (QC) Road Test

Structured test drive and verification process after repairs to ensure the concern is resolved and no new issues created.

Post-repair drive verifies NVH and alignment; Use a standard route and checklist; Document scan results before and after.

Quick Lube Bay

Dedicated express-service lane for fast maintenance items, optimized for speed and volume.

20-minute oil changes for throughput; Separate staffing and SOPs from main shop; Use inspection add-ons to boost conversion.

R-1234yf Refrigerant

Modern low-GWP refrigerant replacing R-134a in many late-model vehicles; requires specific equipment and procedures.

Quote higher YF refrigerant cost upfront; Use certified YF recovery equipment; Confirm 609 certification is current.

Repair Order (RO)

The legal and operational document capturing customer concerns, authorization, parts/labor, and final documentation of work.

Close the RO only after QC; RO must include authorization, complaints, causes, and corrections; Track RO aging daily.

Scan Tool

Diagnostic device reading data, DTCs, and performing tests/calibrations; ranges from generic OBD-II to OEM-level tools.

Needs OE subscriptions for full functionality; Bi-directional controls for component tests; Keep software and firmware updated.

Service Advisor

Frontline role managing customer communication, estimating, approvals, and workflow coordination between techs and customers.

Advisor’s close rate hit 62% last week; Role-play phone scripts for better appointment setting; Advisors review DVIs with customers.

TPMS (Tire Pressure Monitoring System)

System monitoring tire pressure and warning of under-inflation; involves sensors, receivers, and vehicle relearn procedures.

Program new sensors and perform relearn; Distinguish direct vs indirect TPMS; Warn about battery life in sealed sensors.

TSB (Technical Service Bulletin)

Manufacturer-issued repair guidance for known issues; not recalls but often provide time-saving diagnostics and fixes.

Check TSBs before deep diagnostics; TSB calls for PCM update to cure rough idle; Access via OEM info systems.

Upselling/Education (Ethical)

Helping customers understand needed and optional services to make informed decisions, using transparency and consent-based communication.

Use photos to explain leaks rather than pressure tactics; Offer good-better-best brake options; Decline list builds trust.

Utilization Rate

Share of available technician or bay time used productively; complements efficiency and productivity metrics.

Tech utilization at 82%—improve scheduling; Measure by billed hours vs available hours; Reduce waiting-for-parts time blocks.

VIN Decoding

Extracting vehicle-specific data (engine, trim, emissions) from the VIN to ensure correct parts, procedures, and documentation.

Decode VIN to ensure correct timing belt kit; Use VIN for OEM service schedules; Identify emissions family for parts ordering.

Voltage Drop Test

Diagnostic method measuring voltage loss across connections under load to find high-resistance faults more accurately than static ohms tests.

Measure 0.2V drop on ground—within spec; Load the circuit before testing; Diagnose dim headlights via voltage drop, not resistance alone.

Warranty Policy

Defined coverage terms for parts and labor after service; sets customer expectations and controls comeback liability.

24-month/24k-mile nationwide warranty; Parts-only on customer-supplied components; Document exclusions on performance mods.

Work In Progress (WIP)

Open jobs not yet closed or invoiced; monitored to manage cash flow, cycle time, and bay capacity.

Review WIP aging every morning; Too much WIP ties up bays and cash; Move stalled ROs to sublet or parts escalation.

Xenon HID Retrofit Compliance

Considerations and regulations around converting halogen systems to HID/LED; often non-compliant without proper housings and aim.

Verify DOT compliance before retrofits; Recommend OE-spec housings and proper aiming; Document customer acknowledgment of legal limits.

YMM (Year/Make/Model) Data

Basic vehicle identifier used for parts lookup, estimating, and assigning correct inspection/maintenance templates.

Build YMM in the POS to quote accurately; YMM filters in the parts catalog; Use YMM to pre-pick inspection templates.

Yield Rate (Estimate-to-Approval Conversion)

Percentage of proposed work approved by customers, measured by dollars or line items; core sales effectiveness metric.

Our labor-dollar yield is 68% this month; DVIs increased line-item yield; Coach advisors to present priority items first.

Zerk Fitting

Grease fitting allowing lubrication of serviceable joints and bearings using a grease gun.

Grease the zerk at every LOF; Replace damaged zerks on tie-rod ends; Note lack of zerks on sealed chassis components.