For years, new vehicle sales have been the stars of the dealership show. But as economic uncertainty, inventory fluctuations, and shifting consumer behavior reshape the auto industry, service departments are emerging as the true drivers of consistent, long-term profitability.

This shift isn’t just about selling more oil changes. It’s about recognizing the strategic value of fixed operations.

Fixed Ops Are the Steady Engine of Dealership Revenue

According to the most recent National Automobile Dealers Association (NADA) Annual Financial Report, service and parts now account for 13.2% of total dealership sales, up from 12.4% in 2023. That may seem like a modest jump but it’s part of a $45 billion increase in service and parts sales since 2020, climbing from $111.22 billion to $156.46 billion in just four years. And that number continues to grow. While sales fluctuate with supply chains and interest rates, service remains a constant.

A few key data points underscore the trend:

  • Consumers are keeping their vehicles longer. The average age of vehicles on the road in the U.S. reached 12.5 years in 2023, a record high, per S&P Global Mobility. That means more maintenance, more repairs, and more opportunity for service departments to shine.
  • Used car sales are up, and used cars typically require more service touchpoints post-sale.
  • Profit margins on new vehicles are slowly slimming, especially as OEM incentives shift and pricing normalizes post-pandemic. Service, on the other hand, offers more consistent and often higher-margin revenue streams.

Why This Shift Matters for Hiring

As service departments become more central to a dealership’s bottom line, staffing these roles strategically is critical. Yet many dealerships still treat service hiring reactively, filling gaps instead of building teams that drive growth.

That’s where Autopeople comes in.

We understand that hiring a technician, service manager, or parts director isn’t just about finding someone with the right certifications, it’s about finding someone who can elevate the customer experience, drive retention, and increase revenue per RO (repair order).

And here’s why that matters:

  • A single high-performing service advisor can generate $500,000 to $750,000 in annual gross profit
  • A poorly staffed or mismanaged service department can cost the dealership tens of thousands in lost upsells and dissatisfied customers.
  • Employee turnover in service roles, especially among advisors and techs, can drag down productivity and crush morale.

How Dealerships Are Responding

Progressive dealerships are already recalibrating:

  • Investing in technician development programs to address shortages and retain top talent
  • Hiring service advisors with customer relationship experience, not just product knowledge
  • Leveraging recruiters to build deeper benches of talent in a competitive labor market

They’re also integrating fixed ops leaders more fully into strategic planning, not just treating service as a post-sale function, but as a central pillar of profitability and brand reputation.

What’s Next

As fixed ops takes a larger role in driving dealership profits, hiring for the service department can’t be an afterthought.

At Autopeople, we specialize in helping dealerships identify and recruit high-performing service talent that aligns with your goals.

Looking to strengthen your service team?
Schedule a call with David Adragna today – 650 808-7066.