Remember when everyone thought borrowing money would get cheaper in 2026?

That hasn’t exactly worked out.

Interest rates are still putting pressure on businesses and consumers, and auto repair shops are feeling it from both directions.

Your own financing costs may be higher than expected, while customers are becoming more hesitant to approve expensive repairs. Even people with substantial assets can struggle to come up with cash when they need it.

The problem isn’t just what interest rates are doing today. It’s how those rates are changing the financial decisions people make.

Higher Rates Affect More Than Your Loans

When the Federal Reserve adjusts interest rates, the effects eventually reach everything from credit cards and vehicle financing to mortgages and commercial loans.

That matters because your customers are dealing with those expenses too.

Someone who could comfortably finance a major repair a few years ago may now be juggling higher payments across several accounts.

And while inflation may appear to be improving in certain reports, that doesn’t automatically mean borrowing costs will fall anytime soon.

For shop owners, planning around an expected rate cut can be risky. Your financial decisions need to work with the borrowing costs you’re actually facing, not the ones you’re hoping to see.

Your Customers May Have Equity but No Cash

Consider a homeowner who purchased a house when mortgage rates were around 3%.

Their property may have increased significantly in value, giving them substantial equity on paper. But accessing that equity today could mean borrowing at a much higher rate.

That makes a big difference when they’re facing a $10,000 vehicle repair.

The money may technically be available, but the cost of borrowing it can make the repair much harder to justify.

This helps explain why some customers are delaying work or declining larger estimates even when their financial situation appears strong.

For shops, understanding that pressure is important. Customers aren’t necessarily spending less because they don’t value the repair. Sometimes their financial flexibility has simply disappeared.

Commercial Debt Can Create Expensive Surprises

Customers aren’t the only ones dealing with the consequences of higher rates.

Businesses that borrowed money several years ago may be approaching refinancing deadlines.

A commercial loan originally financed near 3% could now be facing rates closer to 9%, depending on the terms and market conditions.

That’s a substantial increase in borrowing costs, especially for a business already operating with tight margins.

Commercial property owners can face similar problems. Even a building with tenants and consistent rental income may become difficult to finance when its loan resets at a much higher rate.

Shop owners who own their buildings and have favorable long-term financing may be better protected from some of these pressures.

If you have variable-rate debt or a loan coming due, now is the time to understand what refinancing could mean for your monthly cash flow.

Make Decisions Based on Today’s Economy

Higher interest rates aren’t bad news for everyone.

People with substantial savings can benefit from stronger returns on interest-bearing accounts. Meanwhile, businesses and consumers carrying debt face a very different situation.

That’s part of what makes today’s economy so uneven.

For auto repair shops, the practical response is to pay closer attention to debt, pricing, and cash reserves.

If your operating expenses and financing costs have increased, your pricing needs to reflect what it actually costs to run the business. Holding prices steady while everything else gets more expensive only puts additional pressure on your margins.

It’s also worth reviewing upcoming loan renewals, evaluating major purchases carefully, and maintaining enough cash to handle unexpected expenses.

Interest rates will eventually change. The question is whether your shop can operate profitably while waiting for that to happen.

Build your financial plan around today’s reality, and lower rates can become a welcome benefit rather than something your business depends on.