What’s Standing Between You and 100% Absorption Rate?

Missed the perfect Christmas gift this year? You are not alone—and most dealerships feel the same way when they look at their fixed absorption report. The difference is that while you cannot go back and change what was under the tree, there is still time to change what is happening in your service drive.

At its core, fixed absorption is simple: it is the percentage of your dealership’s total fixed expenses that are covered by the gross profit from service and parts. Hit 100% and your fixed ops are effectively paying the bills, which means every dollar of vehicle sales gross can flow straight to profit. Industry data still shows most dealers below that mark, often in the 60–80% range, which leaves the store exposed when the sales department has a slow month.

So what is standing between you and 100%? Start with the basics: car count, gross per RO, and efficiency. A healthy fixed absorption rate depends on keeping bays full with profitable work, not just loss-leader oil changes. It also depends on disciplined menus, margins, and approval processes that protect your labor and parts gross instead of giving it away. On top of that, inconsistent processes—from write-up to dispatch to cashiering—create bottlenecks that drag down technician productivity and waste the capacity you already have.

Christmas and the week that follows create a unique window to close part of that gap. Customers are off work, their families are traveling, and they are acutely aware of how much they depend on their vehicles. Retailers treat post-Christmas returns as a second season; in fixed ops, that same mindset can turn “I should have done this earlier in the year” into booked hours and additional parts gross. Year-end is also when many people consciously decide to “start the new year right,” which makes safety, reliability, and maintenance an easier sell than almost any other week.

If your absorption rate is stuck, look at where you are leaking opportunity in December. Generic discount blasts often spike traffic but erode the very margin you need to cover overhead. Unstructured inspections and weak advisor scripting mean you are not converting that traffic into the recommended hours per RO top-performing stores achieve. And an underused service CRM leaves thousands of lapsed owners off the invitation list just when they are most receptive to a “wrap up the year right” message.

The solution is to “wrap your operations in guaranteed ROI” instead of wrapping another last-minute gift. Build or plug into a program that uses data to target the right customers, promotes high-margin seasonal packages, and supports your advisors with processes that consistently convert recommendations into approvals. Dealers who have focused on this kind of optimization have moved from sub-70% absorption into the 90–100%+ range within a year, turning fixed ops into the financial safety net the whole store depends on. Missed gifts cannot be returned, but missed gross can be recovered—starting with how you use this Christmas week.

One last thing: Wishing you and your loved ones a very Merry Christmas, Happy Holidays, and a peaceful New Year.