Car Talk: Volume 25

Research evidence excerpt

Car Talk: Volume 25

June 7, 2026 Car Talk: Volume 25

WHAT YOU SHOULD KNOW: Car Talk is our recurring publication where we highlight Marvin Fong, CFA news and developments in the auto services space over the past week or two that we (212) 527-3562 mfong@btig.com

believe investors will find of interest. In this volume: 1) over a quarter of consumers

are deferring car maintenance, particularly the middle-class; 2) calibrations continueAUTOMOTIVE

their relentless rise in repair activity; 3) EV repair costs are rapidly converging with

hybrid/ICE vehicles; 4) an active two weeks for car wash M&A; and 5) two of three Auto

Services subsectors underperformed on the week.

■ One in four consumers are deferring maintenance. According to a survey of 2,000SERVICES Americans, 27% of drivers have deferred necessary vehicle maintenance such

as brake checks, tire changes and other routine servicing. Interestingly, a higher

percentage of Americans earning $85K-$90K said they were deferring maintenance

than those earning $25K-$35K. Our take: The strain on consumers has been

evident at operators including Driven Brands' (DRVN, Buy, $17 PT) Take 5 segment

and Monro (MNRO, Not Rated) which reported 1Q26 comps that were 270 bpsINDUSTRY below expectations. Expensive tire work has been a particular sore point with

units declining 5% y/y in 1Q26. While the resilience in lower-income workers is

potentially surprising, this income segment typically has many retirees in it who

can pay for work out of savings.

■ Calibration work is soaring. Data from software provider Mitchell (Private) showsREPORT

calibrations were included in 34.7% of all repair estimates in 2025, a 31.4% increase

from 26.4% in 2024. Additionally, the number of calibrations per repair rose 10% to