Auto repair labor rates: national averages, by region and how shops compare

The one labor-rate number our research found published on a regular schedule belongs to the dealerships.

NADA’s 2026 Midyear Report puts the customer mechanical labor rate at franchised new-car dealerships at $192 an hour for the first half of 2026, up from $186 for full-year 2025.

That figure is an average across the franchised-dealer population, not an independent-shop reading.

The base behind that number is wide.

NADA counts 16,990 franchised new-light-vehicle dealerships, which together wrote more than 276 million repair orders and topped $164 billion in service and parts sales in 2025.

Per store, NADA counted 16 technicians including body shop, 16,252 repair orders and $9.69 million in service and parts sales in 2025.

The $192 rate is NADA’s 2026 midyear reading on that population, whose scale the 2025 counts above describe — a dealership statistic by construction, not a reading on independent shops.

NADA’s own definition of effective labor rate is labor sales divided by hours billed — a realized figure, as opposed to the posted menu rate.

Because the formula divides labor sales by hours billed, discounts, menu-priced specials and any hours billed at a lower price pull the realized rate below the posted one, so the two figures move differently even inside a single dealership.

Independent shops have no equivalent figure in our research: no government or standards-body source we checked publishes posted labor rates for them, so a national average quoted for independents should be treated as a survey or marketing figure unless it names a primary source.

The working numbers for your shop are your own posted rate and your own effective labor rate, and both come straight out of your shop management system.

The honest comparison stops where the data stops.

NADA’s figures cover franchised dealerships only, and our research found no government or standards-body source that publishes posted mechanical rates for independent shops.

That means our research holds no verified side-by-side national comparison of dealer and independent rates to point to; a table claiming to rank them nationally is a survey or marketing figure unless it names its sources.

What the published material does show is structure.

NADA’s 2010 service-department guide gives dealers a work-mix guideline: 60 percent competitive and maintenance labor against 40 percent repair labor, each with its own rate.

The category rates differ by design in NADA’s 2010 guideline.

It prices competitive work — lube, oil and filter services, rotations — near local quick-lube rates, sets maintenance labor at the shop’s target rate and never below its warranty rate, and puts repair labor perhaps $8 to $10 above the maintenance rate.

That $8 to $10 spread is NADA’s 2010 example structure, not a current dollar gap — the takeaway is that one shop can post several rates across labor categories.

Dealers run those categories side by side, and NADA’s own numbers track them separately: in 2025, franchised dealerships booked $31.48 billion in customer-pay mechanical labor, $15.46 billion in warranty labor and $12.22 billion in internal labor.

Run those categories together through NADA’s formula — labor sales divided by hours billed — and the result is one blended number, which is why a dealer’s posted menu and its realized rate tell different stories.

An independent shop reads the same two numbers from its own books: labor sales and hours billed, month to date, per category if you run one.

Customer-pay work is the base; if you take contract work — fleet accounts, extended-warranty administrators — track its agreed rate separately.

The comparison that matters is internal: your posted rate next to your realized rate, per category, so the categories carrying discounts cannot hide behind a blend.

Our research found no published map to lean on: no government or standards-body source that posts repair-shop labor rates by state or region, and no national average for body-shop labor rates either — the collision side has the same gap.

Treat a state-by-state rate table you find online as a lead-generation or vendor survey, not a primary source, until it names where each number came from.

What varies by region still shows up through the inputs the published guideline names.

NADA’s 2010 guide prices competitive work near local quick-lube rates, which makes quick-lube pricing in your own market a documented input into a rate structure.

Competitor menus work the same way: each figure a shop posts on its menu is that shop’s real number rather than an estimate.

Run the comparison in that order.

Collect the posted rates from the quick lubes, independent shops and dealer service departments in your market, note the spread between them, then read your own effective labor rate against where your menu sits.

Three menus from your own area tell you more about your region than any national table, because they are the rates actually posted around you.

Specialty rates have the same data problem.

Our research found no primary benchmark for diagnostic fees, and it did not establish benchmark rates for EV shops or European specialists either, so a shop running those menus sets its own numbers rather than drawing from a national table.

Where coach or software-vendor figures circulate in shop-management material, treat each one as a vendor number unless it names a primary source.

What is documented is the structural logic.

NADA’s 2010 guideline runs different rates for different labor categories inside one dealership, anchoring competitive work to local quick-lube rates.

Apply the same structure to an independent menu and each category gets its own rate against local reference points — whether it is diagnostics, hybrid and EV work, or a European brand menu — rather than a lookup from a national specialty table.

Read it per category, not blended.

If you post a diagnostic rate or a specialist rate, track labor sales and hours billed for that category on its own and compute its effective rate separately.

A blended shop-wide number can hide a specialty category priced below what it costs you to deliver — the discount pattern only shows up once the category is broken out.

The posted rate is what the customer is billed per labor hour.

Technician pay is what the tech earns against the hours they produce.

The link between the two is labor cost of sales: what tech labor costs the shop, measured against labor sales.

NADA’s 2010 dealer guideline holds service labor cost of sales at 30 percent or lower, which keeps 70 percent or more gross profit in every labor category.

That is a Best in Class 20 Group guideline for dealerships, not a benchmark for independents.

The same arithmetic runs on your own books: labor gross profit funds training, tool allowances, benefits and the shop’s other costs, so a rate cut narrows what is left for all of them — including what you can offer a tech.

The realized rate is where a pay plan actually lives.

Worked example: if the menu posts a $150 labor rate but written discounts pull labor sales down to an effective labor rate of $135, the pay plan is working against $135, not the posted $150 — example figures, not a target.

NADA’s definition, labor sales divided by hours billed, is the check to run monthly, per category.

Hours are the other half of the math.

NADA’s monthly formula multiplies technicians by hours per day by working days to get clock hours available, then multiplies clock hours by the effective labor rate to get monthly labor sales potential.

Say a shop runs 4 techs × 8 hours × 20 days — 640 clock hours for the month — and bills them at a $150 effective labor rate: the monthly labor sales potential is $96,000 (example figures rather than a target).

However you structure technician pay — hourly, flat rate or a hybrid — the plan lives between the produced hours and the realized rate, and both numbers come from your own records rather than a published table.

None of the math produces hours by itself.

That takes techs in the bays: our guide to hiring for your shop picks up from there, and the automotive technician job listings show what candidates are seeing.

Shop operating information for owners and managers, not legal, tax or accounting advice; every labor-rate figure above is the named source’s own and carries its date.