Auto repair shops hate automobile clubs. From their perspective, they’re the 600 pound gorilla of the industry – dictating towing rates, encroaching on their more profitable business segments and proselytizing their customers. On the other hand, the auto clubs are an inevitable fact of doing business. This love/hate relationship is good for the auto repair customer.
Emergency road service is a good example of the power of the club. Tow truck operators sign a contract to service club members at a predetermined price which is well below the market price for a jump start, tire change or tow job within their trading area. The operators also agree to equip their trucks up to club standards and maintain certain thresholds of insurance. Of course, 24 hour availability is a prerequisite. All of these are great for the club member but tend to squeeze the operator’s bottom line. The service is covered (within limits) under the club member’s yearly fee.
AAA’s mobile battery service demonstrates how a new feature of the mammoth auto club has infringed upon the turf of the independent repair shop. Battery sales have always been a desirable profit center for the auto repair shop. The sale of this single part costing between $100 to $200 with little exposure to comebacks and minimum installation time has always been coveted by repair facilities. AAA’s program dispatches a truck capable of either jump starting your car or checking your alternator output and selling and installing a battery at the site of the failure. If the battery is not the problem, the member is referred to a AAA affiliated shop. What AAA taketh away with one hand it givith back with the other. Interestingly enough AAA member shops pay a monthly fee to be in the Approved Auto Repair program. Meanwhile, the individual member is well served as long as the battery performs as promised.
So here is the dilemma independent shops face. They either suck up their distaste for a large organization that has the strength to dictate the way they operate and enjoy what peripheral business the club may generate, while risking the loss of a segment of their client base. Or they operate outside of the umbrella of the auto club free of monthly dues, free to operate as they choose, but absent any stream of club generated business. For the club member and to a certain extent the general public, however, there is no downside. The pressure the auto clubs put on the marketplace suppresses prices and raises the expectations of consumers in terms of the quality of service.