Passing the $30 threshold is an important milestone, NOLN Editor Garrett McKinnon told Lube Report. Fast lube operators held the line on price for many years, but finally have passed their increased motor oil costs along to customers.

The average per-gallon cost of a stores highest-volume bulk oil rose just slightly from $6.41 in 2006 to $6.45 in 2007. However, the price for bulk motor oil jumped 17 percent in each of the two preceding years, while the cost for a standard oil change hung below $30.

Seventy percent of the LT30 stores and 91 percent of the MT30s reported increasing their oil-change prices in the past 12 months. Average ticket totals, including add-on services, rose soundly, from $45 in 2006 to over $47 in 2007 for the LT30 stores, and from $55 to over $56 for the MT30s.

The average ticket increase was pronounced, McKinnon noted. Operators walk a fine line, to offer services without overselling. Educating [customers] versus overselling is key to separating successful operators from unsuccessful ones. Among the most profitable add-on services are automatic transmission fluid exchange, air filter replacement, fuel injection cleaning and tire rotation, the survey shows. Thirty-nine percent of LT30 stores are now offering on-site carwashes, and another 25 percent plan to add a carwash to an existing fast lube store.

While LT30s said that 72 percent of their business comes from oil changes, the MT30s reported that only 53 percent of theirs does.

Despite an uptick last year to 36.5, the average number of cars serviced per day – close to 35 for both LT30s and MT30s – continued its longer term decline, according to the 2007 survey. Car counts wont decline rapidly, McKinnon said, but people are stretching out oil change intervals, and theres more competition for oil change business. I dont know how low it will go. The break-even car count is 25 for LT30s and 29 for MT30s.

Reflecting todays high cost of petroleum, all of the MT30 stores and 94 percent of the LT30s report that they are being paid for their used oil, with the larger chains receiving 64 cents per gallon on average, and the smaller operators receiving 54 cents.

NOLN asked operators last year for the first time if they refused to service any vehicle makes or models, and 28 percent of the LT30s said yes. That number rose sharply this year, to 36 percent, for the LT30s. Concerns about liability, particularly with high-end European cars, and the special supplies needed to service those vehicles, were cited as reasons. Interestingly, for MT30s, 40 percent last year turned away at least one make or model, but that plummeted to just 11 percent this year. Presumably, the larger chains are acquiring the expertise and supplies needed to keep the business from going to a dealership.

Pennzoil and Valvoline continued to be the number one and number two best-selling motor oil brands among LT30s, with their shares up from last year. Mobil 1 continued to be the dominant synthetic motor oil, with 56 percent of the LT30 business. NOLN reported the following:

The complete 2007 NOLN operators survey is for sale for $60. For more information or to purchase the survey, go to www.noln.net and click on surveys.