The automotive repair industry, as we know it, is changing—thanks to Buy Now, Pay Later (BNPL) solutions. For customers, auto repair disrupts their financial planning when it’s often an unexpected expense. Offering BNPL as a service for your auto repair business isn’t about giving your customers more payment options; it’s about keeping your auto shop competitive in the future. In 2025, profitability and payment processing integration will come from satisfying customer expectations and reducing sales process friction starting today.
Why BNPL Relates to Auto Repair Shops
BNPL financing as a service for your auto repair shop isn’t just a value-add for the customer experience; it’s a value-add for your operation. The truth is that most consumers aren’t in the position to spend a lot of money on unexpected expenses. Therefore, when they realize that they can avoid paying interest by choosing BNPL to finance/repair their current installment, they’re more inclined to spend (cash or credit) with the intention of a legitimate payment plan instead of pushing off the expense until later[1]. For your auto shop, this means higher average ticket prices, quick resolution approvals, and clients who are more likely to get serviced with you vs. the competition. In addition, providing BNPL as a service to your customers gives them peace of mind and builds trust. You’re the company that’s up-to-date with revenue offerings during these tenuous financial times.
Why BNPL Relates to Payment Processing
To offer a BNPL solution, your auto repair shop needs a payment processing solution that’s already in place. Most BNPL solutions are seamlessly integrated into your credit card processing systems; however, they need to allow for high-ticket transactions. Not all BNPL platforms provide chargeback compliance, protection, or reporting required for these high expenses, either[2]. Therefore, when investigating which BNPL option is worthy for the future of your auto repair shop, make sure it integrates with rather than disrupts your payment processing needs.
Find a BNPL Provider That Integrates With Your POS
It’s important to note that there are a lot of BNPL providers; not all of them are equal. Shops should search for BNPL providers who integrate directly into the shop’s POS systems and payment processors. This reduces confusion and lessens human error. Seek systems that allow for in-the-moment financing approval during the purchase. The less a customer has to divert attention from the screen to execute a sale, the better. In addition, the BNPL provider must seamlessly integrate into your merchant services provider so that all payments route appropriately for bookkeeping and oversight.
When you integrate BNPL with your payment processor, your merchant account needs to be compatible. This is even more crucial in high-risk areas like automotive. For example, you’ll need to understand processing fees, returns and how BNPL transactions are categorized. Some BNPL applications charge higher fees than credit card processors, so knowing your margins is crucial to understanding whether or not BNPL is an option for your shop[3]. Strong reporting and customer service from your payment processor can facilitate— or get in the way of—this integration.
BNPL for Mechanics: Shops Getting it Done
Whether it’s a franchise or a local garage, BNPL is changing the auto repair game. Shops that implemented BNBL say they receive faster approvals, better average ticket per visit and higher customer satisfaction across the board. For example, Afterpay and Affirm report that service companies that utilize BNBL achieve an average increase in conversion rates of 20-30%[4]. It clearly isn’t a trend; it’s a payment solutions approach that works for those businesses that have access through their payment processor.
Benefits of BNPL for Increased Repair Shop Profits
Higher Approval Rates
BNPL providers often accept clients with poor credit history. Therefore, you expand your potential client base/margin. BNPL usually applies a soft inquiry into credit which won't negatively impact someone's credit score and is far less aggressive and more inclusive than any financing that other options provide. Therefore, aftermarket shops see higher successful closure rates and higher customer satisfaction. If some are on the fence, BNPL gives them that additional nudge to say yes.
Higher Average Repair Orders
A customer is more likely to approve upsells or recommended repairs if they don't have to pay out of pocket today. Average repair order increases as presenting these payment opportunities within a customer's control allows for more accessible approval of necessary comprehensive repairs today instead of wished work down the road. Over the life of a project, this equals increased revenue per car.
Less Collections & Delayed Payments
When a BNPL plan is in effect, your shop either gets paid upfront from the BNPL company or partial payment. You are not getting paid, and the customer is responsible for subsequent payments to the BNPL company but never to you. Therefore, your employees do not have to engage in collection activities, and cash flow is expedited. With BNPL solutions, there are fewer disputes since customers agree immediately to payment plans, meaning fewer outstanding invoices. This creates more in-house resources. Profitability-wise, guaranteed payments at specific intervals mean a lot.
Greater Customer Loyalty
When customers don't have to worry about payment, especially during an already vulnerable experience at your shop, this means they'll return. If a customer can go home after being hit with an unexpected, negative financial moment, and you're able to provide options through BNPL, you're kicking the ball back into their court and minimizing financial stress/insecurity. Customers will remember that you provided them with options instead of pressure. Loyalty is built within small windows in the automotive industry.
Competitive Differentiation
As many shops are still without BNPL capabilities, those that adopt it are already ahead of the curve. Promoting this option in marketing and during the estimating process sets your shop apart from the rest. Once price is not a dealbreaker, you don't have to fear your customers going to the next shop because you have a handful of reviews or not as extensive an online presence. Instead, customers remain focused on quality of service and trust. In addition, you'll secure a better reputation for working with young drivers who may not be as credit-savvy.
Higher Upsell Opportunities
Fee shocks are much less frequent when a customer can pay over time. When your shop suggests aftermarket upgrades, extended warranties and suggestions for preventative maintenance, it'll be easier for the customer to swallow. Since BNPL allows customers to take advantage of the split payment option, they'll see these additions more on par with necessities than luxuries. It increases their spend organically without them even realizing it.
FAQ
Q: How does BNBL work for my auto shop?
A: BNBL allows your customers the ability to break up their payments owed to your auto shop over time. Instead of paying you hundreds to begin with, they can pay you less four times. You still get your money owed up front from the BNBL company, and the BNBL company gets paid back by your customer. This minimizes payment friction for the customer while maximizing revenue cash flow for your business. Most BNBL options come with instant approvals and low-friction applications.
Q: Do BNPL solutions work with credit card payment systems?
A: Yes. Most BNPL solutions are built to integrate with credit card payment systems and POS. However, they might not all be compatible with yours, so ensure that you choose a BNPL provider that easily integrates with your existing merchant services and software stack. You want to integrate to avoid data silos and checkout slowdowns.
Q: What are the BNPL processing fees?
A: BNPL processing fees are typically higher than credit card processing fees. BNPL fees typically fall in the 2-6% range[5]. Furthermore, some have a per-transaction fee that is a flat fee that, while adding to your cost of acceptance, is offset somewhat by increased average ticket sizes and delinquencies. Ensure you do your research with profitability assessments before launching.
Q: Is BNPL safe for my auto repair shop?
A: BNPL is safe for auto repair shops and, in many ways, safer as the provider takes on the repayment risk. As long as a customer is approved for BNPL, the auto repair shop gets paid instantly or within a few business days, meaning businesses don’t have to fund their own collections efforts and won’t have to worry about revenue loss from compromised customers.
Q: Will BNPL help me get more customers for my repair shop?
A: Having a BNBL solution is a desirable opportunity for potential new customers, especially for large one-time transactions that were never anticipated. Marketing that you have flexible payment opportunities signifies trustworthiness and decreases resistance to booking for necessary services. It’s a strong piece of marketing that conveys to those who want value, at the same time, reliability.
Q: Who are the best BNPL providers for my shop?
A: The best BNPL providers for your shop are those who specialize in high-ticket service categories, have transparent fee structures and can seamlessly integrate with your current POS and payment processor. Affirm, Sunbit and PayPal are reputable BNPL providers with service business-specific offerings. Just make sure to check reviews, customer service options and regulatory/legality paperwork before making a decision.
Final Thoughts
As the auto repair industry is becoming more competitive than ever, offering Buy Now Pay Later processing options is not an optional luxury anymore, but instead, a requirement. BNPL allows for increased profitability and improved average order value while decreasing financial friction and increasing customer loyalty. However, for businesses to benefit from everything BNPL has to offer, it must connect to a payment processor for compliance, security and effective transactional capabilities. Those shops ready for such transformation will not just be able to survive but also flourish and expand. With the right partners, like a trustworthy payment processing provider, your ability to offer flexible financing will translate to sustainable success.
Sources
- Forbes. “How BNPL Is Disrupting Traditional Auto Financing.” Accessed July 2025.
- PYMNTS. “BNPL Use in Service Industries.” Accessed July 2025.
- NerdWallet. “Top BNPL Providers of 2025.” Accessed July 2025.
- Affirm. “BNPL Solutions for Automotive Services.” Accessed July 2025.
- Afterpay. “Consumer Financing Trends.” Accessed July 2025.
