Hotspot in tight economy: auto repair shops

SIMI VALLEY, Calif. -- New car sales are up slightly compared to last year, but a lot of drivers still aren't rushing to make a deal.

That's because they're finding a much cheaper alternative that saves them lots of money.

As CBS News Correspondent John Blackstone reports, many Americans are choosing to hang onto the cars they already have by repairing them, rather than buying new ones.

One such motorist, Tony Rodriguez.

He's having a lot of new parts put on his old truck.

"I am playing it safe. That's a good way to put it."

After 100,000 miles, the engine on his 2006 truck gave out. He considered buying a new truck -- and then he considered the economy.

"A brand new vehicle, I love my truck, was $37,000, OK?" Rodriguez remarked. "So, the alternative was $6,500 for a new engine. I went with that route."

Rodriguez was assured he has nothing to worry about, due to the accompanying three-year, 100,000 warranty."

At Schnieder's Automotive Repair, Mitch Schneider is not only keeping Rodriquez's truck going by installing the re-built engine, he's keeping the business going that his father started 45 years ago.

And these days, business is good, as more people put off buying new cars and instead keep their old ones on the road.

"Now," says Schneider, "they're thinking they will be driving it longer -- maybe a year or two longer than they might have driven otherwise."

According to the Automotive Aftermarket Industry Association, Americans spent $36 billion dollars at auto repair garages last year - an increase of 10.5 percent from 2007, as the economy started having troubles. And this year, auto parts sales are already up 5 percent from last year.

"There are people who come in and tell us that, in the past, they would have thought nothing of going into a dealership and buying a new car," notes Schneider, "and now, it's just not an option -- they gotta keep that car. We had one yesterday - a gentleman in a Mercedes, saying he is making a third of what he was making three years ago."

In 2006, Americans bought 16.5 million new vehicles. In 2009, such sales collapsed to just over ten million. This year, sales are expected to creep back up to 12.5 million.

But plenty of potential buyers, such as Rodriguez, aren't yet ready to go car shopping.

"Three years ago," Rodriguez observes, "if it would have happened with my vehicle, I would have bought a vehicle right off the bat. I'm not kidding. I would have gone with a new vehicle. I probably wouldn't thought about it."

But now, he figures repairs are the best solution, at least until the economy is repaired.

  • John Blackstone

    From his base in San Francisco, CBS News correspondent John Blackstone covers breaking stories throughout the West. That often means he is on the scene of wildfires, earthquakes, floods, hurricanes and rumbling volcanoes. He also reports on the high-tech industry in Silicon Valley and on social and economic trends that frequently begin in the West.

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