Legal Disclaimer: This article is written for informational purposes only and does not constitute professional financial advice. Please reference section179.org and a professional accountant for advice on financial planning and filing taxes.
As 2020 comes to an end, you might be thinking about all of this year's expenses and wondering what you might be able to write off on your taxes. You may even be considering whether or not to make a big purchase, weighing the tax deductions you could get if you bought it this year versus next.
Is it worth buying that new lift before the year ends? Or should you put it off until 2021?
What is Section 179?
Section 179 of the IRS tax code allows business owners to write off the entire cost of a piece of equipment, renovations, or other assets in the first year instead of writing off an asset a little bit at a time over a five, seven, fifteen, or thirty-nine year period. To give an example, if a shop owner buys a new tire machine, they could either write off the taxes over a seven-year period, or they can use Section 179 to get the entire deduction in the first year.
What Type of Costs Qualify for Section 179?
Tangible business property, including machinery and equipment
Leasehold improvements
Computer software*
*Is Tekmetric Eligible for Section 179?
Generally speaking, off-the-shelf computer software that has been purchased outright is eligible for Section 179. Because Tekmetric is a web-based software and does not make users sign a contract, it is not eligible for section 179, but it does qualify for a standard tax deduction.
What are Leasehold Improvements?
Leasehold improvements are any repairs or modifications that you make to your building or property, including adding a new roof, installing security or safety systems, and remodeling parts of your building without expanding the footprint. Without Section 179, leasehold improvements depreciate over 15 or 39 years, depending on what the improvements are. With Section 179, you can receive the entire deduction in the first year.
How Often Does Section 179 Change?
Section 179 is typically adjusted every several years. Most recently, Section 179 was adjusted in 2018 when the deduction limit was doubled and more types of purchases were made eligible. Section 179 may change again in the following years.
When Should You Use Section 179?
If you know that you’re going to pay taxes this year, and you have made a major qualifying purchase, then you may want to consider using Section 179 to save on your taxes and free up some cash flow for 2021.
If you financed a major purchase, you may want to consider how soon you plan on paying off that purchase and whether or not you would like to receive a tax deduction in the following years as you pay it off. For example, if you have a loan on a piece of equipment that you plan on paying over five or ten years, you may want to opt for the regular depreciated tax reduction so that you have money to offset those taxes in the following years.
Should You Make a Major Purchase Before the Year Ends to Use Section 179?
It’s not the wisest decision to buy something just to save money. It is true that Section 179, and tax benefits in general, are the best that they’ve been in years, but consider only making a major purchase if it is already in your plan and budget. If it is something that you already planned on buying in the next six months, then you may want to make the purchase before the end of the year to leverage Section 179’s tax deductions.
Talk to the Auto Repair Accounting Experts
Every situation is different. Take a look at what your tax rates are and ask yourself, "Is my income low enough this year where I'm actually reducing taxes at a pretty low rate? What do I think the tax rates are going to be in the future? Or will this benefit me more in the coming years when I think I'll be making more money?"
Talk to your accountant to form a game plan for all of this.
This article was written with the guidance of automotive repair industry CPA Hunt Demarest of Paar, Melis, & Associates, P.C.
Need help planning your taxes for 2020? Contact Paar, Melis, & Associates.
With so many different aspects of running an independent auto repair shop, the teams that keeps cars moving through your bays and repair orders flowing through your workflow function best when they run like a cohesive unit.
Just think about your favorite sports team. The players share a common goal, whether it be scoring a touchdown or hitting a home run, and they encourage each other to always perform at their best.
But there’s usually one person on the team who everyone looks to for guidance and inspiration: the team captain. Every player in the auto repair industry is important—from the technicians to the parts managers. But service writers are like the team captain. They keep everyone on track.
If you’re ready to learn about a challenging but rewarding career where no two days are the same, you’re in the right place.
In today's fast-paced digital world, connecting with your customers isn't just about turning wrenches; it's about building relationships. For the automotive industry, email marketing can be a powerful marketing tool.
A well-executed email marketing strategy can transform your auto repair business, driving new customers through your doors and fostering customer loyalty among your existing clients.
What is Email Marketing?
At its core, email marketing is a form of digital communication that enables businesses to send messages directly to a group of people via email. Think of it as a personalized billboard delivered straight to your customer's inbox.
Unlike broad social media blasts or expensive Google ads, email marketing offers a unique opportunity to tailor your message to specific segments of your email list, making your communications more relevant and impactful. It's a key component of any effective automotive repair marketing plan.
Why Auto Repair Shops Should Use Email Marketing
Many auto shop owners might wonder if email marketing is truly worth the effort. The answer is a resounding "yes!" In an industry built on trust and relationships, email marketing serves as an invaluable tool for nurturing customer relationships. Here are some of the top benefits of email marketing:
1. Cost-effective
Email marketing is very cost-effective. Compared to traditional advertising methods, the return on investment (ROI) for email marketing is often significantly higher. You're reaching a targeted audience that has already shown some interest in your services, whether by providing their email address at your shop or through an online signup.
2. Top of mind
Email marketing will keep your auto repair shop top of mind. Your customers have busy lives, and car maintenance often slips their minds until a problem arises. Regular, helpful emails ensure that when they do need service, your shop is the first one they think of. This is crucial for customer retention.
3. Customer Retention
By staying in touch, you remind existing customers about upcoming service needs and show appreciation for their business. This proactive approach significantly boosts customer retention and encourages repeat visits.
4. Measurable Results
Unlike some traditional marketing, email marketing provides detailed analytics. You can track open rates, click-through rates, and ultimately, how many appointments were booked as a result of your email marketing campaigns. This allows shop owners to refine their marketing strategy for maximum effectiveness.
5. Direct communication
Finally, email marketing provides a direct line of communication. You can share important updates, special offers, maintenance tips, and build a sense of community with your customer base. This personal touch is something that a general advertisement simply cannot replicate.
Email Marketing Campaign Ideas
To maximize your marketing efforts, it's essential to diversify the types of emails you send. Here are some of the most effective email marketing campaigns for automotive repair shops:
Welcome Emails
When a new customer provides their email address, send a warm welcome email. This is your chance to introduce your shop, highlight your unique selling propositions, and perhaps offer a small discount on their first service. This initial contact sets the tone for future customer relationships.
Welcome email template
Service Reminders
These are arguably the most crucial emails for an auto repair shop. Based on a customer's service history (which can be managed efficiently through a good CRM system), send automated service reminders for scheduled maintenance like an oil change, tire rotations, or brake inspections. Make it easy for them to book an appointment with a clear call to action.
Service reminder email template
Promotional Emails/Special Offers
Announce discounts, seasonal promotions (e.g., winter tire specials, summer AC checks), or bundled services. Use compelling subject lines to grab attention and always include a strong call to action (or CTAs).
Promotional email template
Maintenance Tips and Educational Content
Share valuable information like "5 Ways to Extend the Life of Your Tires," "Understanding Your Dashboard Warning Lights," or "Why Regular Oil Change is Crucial." This positions your shop as an expert and provides genuine value to your customer base.
Maintenance tip email template
Customer Feedback/Review Requests
After a service, send a follow-up email requesting feedback or a review. Positive testimonials are incredibly powerful for attracting new business. Link directly to your Google My Business page or other review platforms.
Customer feedback email template
Birthday/Anniversary/Holiday Emails
A small, personalized gesture like a birthday greeting, perhaps with a minor discount, can significantly boost customer loyalty.
Birthday email template
Abandoned Appointment Emails
If your shop offers online appointment scheduling and a customer starts but doesn't complete the booking process, an automated email reminding them to finish can recapture lost potential customers.
Abandoned appointment email template
Automotive Email Marketing Strategies
Now that we've covered the what and why, let's dive into the how. Implementing these best practices will ensure your email marketing strategy yields optimal results for your auto repair shop:
Segmentation is Key: Not all customers are the same. Segment your email list based on factors like vehicle make and model, last service date, service history, or demographics. This allows you to send highly targeted and relevant messages, improving open rates and conversion rates.
Craft Compelling Subject Lines: Your subject lines are the gatekeepers to your emails. Make them concise, intriguing, and benefit-oriented. Examples: "Time for Your Oil Change?", "Exclusive Discount Just For You!", "Protect Your Car This Winter."
Personalization Goes a Long Way: Always address customers by their first name. Reference their vehicle type or past service if possible. Automation can make this surprisingly easy, especially with a good CRM or shop management system.
Clear Call to Actions (CTAs): Every email should have a single, clear call to action. Whether it's "Schedule Your Appointment Now," "Claim Your Discount," or "Read Our Latest Blog," make it obvious what you want the recipient to do. Use prominent buttons or hyperlinked text.
Mobile Responsiveness is Non-Negotiable: A vast majority of people check their emails on their smartphones. Ensure your emails are designed to look great and function perfectly on all mobile devices. Test your templates before sending.
Automate Where Possible: Utilize automation tools to send welcome email sequences, service reminders, birthday greetings, and follow-up emails after a service. This saves time and ensures consistent communication without manual effort. Many CRM systems and email marketing platforms offer robust automation features.
Provide Value Beyond Promotions: While special offers are great, don't make every email a sales pitch. Offer genuine value through maintenance tips, car repair advice, and educational content. This builds trust and positions your auto repair shop as a helpful resource.
Optimize Send Times: Experiment with different days and times to see when your email list is most engaged. Tools within email marketing platforms can often provide insights into optimal send times based on your audience's behavior.
Integrate with Other Marketing Efforts: Your email marketing strategy shouldn't exist in a vacuum. Cross-promote your email list on your website, social media channels, and in your physical shop.
Monitor Performance: Regularly review your open rates, click-through rates, and conversion rates. A/B test different subject lines, CTAs, and content to continually improve your email marketing campaigns. This data-driven approach is crucial for success in the automotive industry.
Don’t overdue it: Nobody likes receiving 30 emails in one day, so make sure your email cadence is reasonable and not overwhelming to your audience. Always provide an “unsubscribe” option in your emails in case they no longer want to receive emails from you.
Final thoughts
In conclusion, for any auto repair shop looking to thrive in today's competitive landscape, a well-executed email marketing strategy is no longer optional – it's essential. By consistently delivering valuable content, timely reminders, and exclusive offers, you can build a highly engaged customer base, boost customer loyalty, and ensure your auto repair business remains successful for years to come.
Start building your email list today, embrace automation, and watch your marketing ideas turn into tangible results. Your customers and your bottom line will thank you.
The reality is that now is a better time than ever to set your auto repair shop up for success, and even start laying the foundation for multi-shop growth. Especially for shop owners willing to take the time to embrace a new toolset: a modern shop management system.
In our latest Auto Repair Industry Index we took a look at recent industry trends across the country, compiled data from industry resources, and compared it to our Tekmetric data. What we found was really promising!
With a cloud-based SMS, shops can leverage amazing features like Default Inspections and Smart Jobs to not only simplify their workflows and smooth out their operations to run like a well-oiled machine but also set their business up for future growth and success.
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