Can we Replace the Profit We’re Losing on MOTs?

Can we Replace the Profit We’re Losing on MOTs?

With the MOT market becoming increasingly saturated, the MoT Club suggests that garages could be doing more in order to make up for the shortfall in MOT revenue. 

S ince 2005/06, the number of MOT Testing Stations in the UK has increased from 18,300 to 22,500 –that’s an increase of 23%. The number of MOT tests, however, has only increased by 11.5%, from 26 million to 29 million, so it’s likely you are carrying out fewer MOTs than you were 10 years ago.

Despite this decline, the DVSA continues to approve applications for new Testing Stations every year.

The reduction in MOT tests could be as much as 131 fewer tests per VTS per year, according to statistics soured from Couple this with the additional costs we now have for MOT training, which was provided free of charge by the DVSA until 2016, and profitability can only be going one way.

The number of staff at the DVSA has reduced dramatically over the past few years, and the staff who remain are being stretched further with the part privatisation of HGV testing. It has led to fewer risk assessments being carried out and fewer inspections – some Testing Stations have not seen a Vehicle Examiner (VE) in years! The impact of this is significant and it will lead to reduced road safety and sub-standard Testing Stations not being identified and shut down. This is compounded further by the number of approved Testing Stations growing year on year.

The reduction in VEs is also slowing down the appointment of new Testers, many of which are on a waiting list for their observed test. This means it’s taking longer for a garage to get a return on investment after paying for the four to five-day training course.

If you factor in the price freeze for the MOT test, inflation, vehicle exemptions and other factors, experts in the trade are forecasting these changes cost the average VTS up to £20,000 a year. Fewer MOTs being carried out will lead to fewer MOT-related repairs from failure and this is where the real money is made. We all know that many VTSs use MOT as an add-on service to increase footfall into the garage. So, the average garage must surely find ways to improve revenue and profit from other areas in its business. The MoT Club has recently seen an increase in customer requests for technician clocking software to track the time spent by technicians on repairs. Could this be down to the reduction in revenue from MOT-related work? Are garages looking at other avenues? A good quality, efficient clocking tool can really help here.

Looking at the actual time spent on repair work and comparing this to what has been quoted can give valuable information. It shows which technicians require more training so tasks can be completed quicker, and this leads to improved workshop capacity. It can highlight repair work that is being consistently over-quoted, therefore permitting price reductions and making the business more competitive. For larger garages it is a useful way to make sure staff are performing well and ensuring that bonus structures are effective and being applied correctly.

By analysing the workshop utilisation and efficiency, it should be possible to forecast how much free capacity is required, based on the volume of MOTs booked in. Optimal workshop capacity management will lead to less waste, improved customer satisfaction and ultimately higher profit. It is not an exact science but if a garage can book in an extra three jobs a week, then over the course of a year this could easily make up for the £20k per year lost in MOT revenue.

For more information about the MOT Club, click here.

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