What is average repair order: ARO is the average value invoiced per repair order over a period, calculated as total labour and parts sales on closed repair orders divided by the number of repair orders closed.
Average repair order, shortened to ARO, is total sales divided by the number of repair orders closed in the same period. It tells a service manager how much each visit is worth, on average, in labour and parts combined, and it is the number most often quoted when a department describes its performance.
It matters because a workshop's revenue is repair order count times ARO, and the count is largely set by the market and the booking desk, while ARO is set by what happens on the ramp and at the desk: what gets found, what gets presented, and what gets approved. It is also written average RO value, average ticket, or in independent garages average invoice; in North America the same metric is ARO or average RO, sometimes split into customer pay ARO and warranty ARO.
Average repair order formula
ARO = total sales on closed repair orders ÷ number of closed repair orders
Three decisions make the number comparable from month to month.
- What goes in the numerator. Labour and parts on closed ROs is the usual definition. Sublet, tyres, oil and shop supplies are included in some workshops and excluded in others; pick one and stay with it. Never include vehicle sales or finance income.
- Which ROs count. Customer pay only is the cleanest measure of what the department sells. A blended ARO that mixes customer pay, warranty and internal moves with warranty volume and reconditioning rather than with selling.
- Closed, not opened. An RO opened in March and closed in April belongs to April. Counting on open date lets a busy booking week flatter a slow invoicing week.
The metric splits usefully into its two parts: hours per repair order times effective labour rate gives labour ARO, and parts ARO sits beside it. A department that watches all three knows whether a change in ARO came from selling more hours, earning more per hour, or a different parts mix.
What moves ARO
- Identification. Work found on a vehicle health check. A department where every car gets a consistent check identifies more per visit than one where the check depends on the technician's mood.
- Presentation. Identified work that is priced, explained and shown converts; identified work read out from a sheet does not. This is where the approval rate on amber and red items lives.
- Approval. The share of presented work the customer says yes to. Declined work is the gap between identified and sold.
- Mix. Menu-priced services pull ARO down per visit and push count up; a month heavy with brakes and tyres pulls it up. Read ARO next to the mix before drawing a conclusion.
- Pricing. Labour rate and parts markup set the ceiling; discounting at the desk sets how far below it the department lands.
Average repair order example: one month, one workshop
A workshop closes 420 customer pay ROs in a month with 189,000 in labour and parts sales. ARO is 189,000 ÷ 420 = 450.
Split it: labour sales were 84,000 and parts 105,000, so labour ARO is 200 and parts ARO is 250. At 1.6 hours per RO the workshop sold 672 hours, which puts the effective labour rate at 125. The manager compares to the previous month, when ARO was 420 on 440 ROs, or 184,800 in sales. Count fell by 20, ARO rose by 30, and total sales went up by 4,200. Digging in, the health check completion rate had risen from 70 to 90 percent of vehicles, and the approval rate on presented brake work had gone up after advisors started sending a video of the worn pad with the quote. The extra was almost entirely brakes and tyres approved on cars that had come in for a service.
Had the manager read ARO alone, the story would have been "prices up". The split says "more found and more approved on the same cars", which is a different and more repeatable result.
How average repair order gets misread
- Chasing ARO by discouraging small jobs. Turning away a menu service to protect the average removes a visit that would have produced a health check and, often, a larger job.
- Comparing across sites. A prestige brand with a 300-per-hour labour rate and a budget brand at 120 will never share an ARO. Compare a site to its own history.
- Reading a rise as good news. ARO rises when warranty and menu work fall away. Read it with repair order count and total gross.
- Ignoring the deferred book. Work deferred at this visit is next visit's ARO, and only if somebody follows it up.
- Using it to judge technicians. ARO is a desk number. Technicians are judged on identification and efficiency; advisors on presentation and approval rate.
Who owns the number
ARO is calculated from the DMS, usually in the month-end report and often on a daily dashboard. The service manager owns it and is measured on it; the advisors own the presentation and approval steps that move it; the technicians own the identification step. Groups with several rooftops report it by site, by payer and by advisor, and the by-advisor view is where most of the variance shows. For benchmarks across the department, see dealership service department statistics 2026.
The approval step is where video fits, because the customer is deciding on a part they cannot see. Workshops using Venta Video have the technician record a short clip on a phone during the check, and the customer receives it as a branded page over SMS, WhatsApp or email with approve, book or pay buttons, so identified work is presented with evidence. More on the automotive aftersales page.
