Who killed the great American gas stations with auto repair shops?

By Bill Hayward

Photo by Bill Hayward.

What ever happened to the great American gas stations with auto repair garages?

Yes, there are still some of them of them around. But depending on where you live and how old you are, you may or may not know that it’s a business that certainly isn’t what it used to be.

If you aren’t sure what I’m talking about, you might be younger than Generation X and have little or no recollection of the days when small gas stations with auto repair shops—usually carrying the brand of a major oil company but still operated as small family businesses—were a mainstay of streetcorners in cities, towns, and suburbs across the U.S.

Or you might have spent all of your life in an area in which these establishments have not been prevalent for a long time, in which case you have always known a world with gasoline sold mostly at large convenience stores.

But there was a time when gas stations with auto repair shops and no convenience stores were the rule rather than the exception. If you look closely at the roadside landscape, especially as you drive through small towns, you can often still see clear signs of the transition that occurred.

You might, for example, see an auto repair shop with old gas pumps in the front that have been shut down or possibly boarded over. Others, like the shop pictured below in Red Lion, PA, clearly show remaining elements of vintage gas station architecture, but have had the pumps in front of the building removed entirely.

Then there are still others, like the Wrightsville Sunoco Deli in Wrightsville, PA, where you can see the remnants of service bays, long boarded over or covered with siding.

This Sunoco station still caters to auto enthusiasts to the extent that they have one pump that dispenses Sunoco 100 octane race fuel. But the area of the building where repair services were once available has been converted to convenience store and foodservice space. Yet they still manage to stay in business in spite of their location right next to a large Royal Farms convenience store and gas station.

Locations like these are like archeological clues to a past in which the dominant business models for fuel sales and auto repairs were quite different than they are today. If you look into the reasons for the change, you will find a complex interplay of economic, regulatory, and sociocultural factors behind the decline of gas stations with auto repair shops.

As is often the case when you inquire into the causes of historical change, the explanation can vary depending on the perspective of the expert you ask.

Jeff Lenard, vice president for strategic industry initiatives at the National Association of Convenience Stores (NACS), explains it as a matter of the basic economics and technologies of the automotive sales and repairs industry, noting in an email that “car owners are highly discouraged from bringing their cars to anyplace other than their dealerships. That, plus the high cost of computer-based diagnostic equipment, has led to the decrease of service stations as much as anything.”

Industry statistics maintained by NACS also suggest a macro-level trend toward consolidation as the automotive and fuel industries have evolved over a century of history.

“There were probably 300,000 fueling outlets in the 1920 but that number has been halved in the past 100 years.” Lenard noted.

That’s a remarkable level of consolidation when you consider that, over those same 100 years, the U.S. population has more than tripled, and that in 1920, according to Rails and Trails, there were only “7.5 million cars and trucks in the United States” compared to more than 286 million vehicles registered in the 2020, as noted by Hedges & Company.

Yet if you zoom in on some of the historical detail, you might find the story you see to be somewhat more darkly tinged, compared to the macro-level view from NACS. It’s a story of tensions between small mom-and-pop business and large-scale corporate enterprise.

Government regulators have played a role as well—in some cases taking actions that tried to help small gas station operators preserve their livelihoods, but in other cases contributing to the forces that drove them out of the industry.

The prevailing market configuration of the convenience store, gasoline retailing, and automotive repair industries as I was coming of age in the Maryland suburbs of Washington DC was illustrative of a moment when some of these tensions were in medias res.  

Until approximately the early 1980s, there was a clear separation in that region between the convenience store and fuel industries. Around the time when I first became a licensed driver, a 7-Eleven with gas pumps opened in Burtonsville, Maryland, a town near my home. The store was quite a novelty at the time.

Before that, in our area, you went to a convenience store for bread, milk, and Slurpees, and to an individually owned, branded gas station—like an Exxon, Amoco, Shell, BP, Gulf, Mobil, or ARCO, usually one that had repair service bays—for gas. The twain did not meet. Perhaps with rare exceptions that I did not encounter, convenience stores and gas stations were completely separate entities during that era in Montgomery County, Maryland.

That separation was at least in part the result of regulations intended to keep the industries separate to help preserve the ability of individual gas station owners to stay in business.

Yet, at the same time, in other regions across the U.S., the behemoth oil and gas industry was putting pressure on those same small business operators who were selling their gasoline.

Here’s how the scenario was playing out in Missouri and Kansas as of 1988, for example. According to the St. Louis Post-Dispatch (February 19, 1988), many gas station owners who leased their stations from oil companies that supplied them with gasoline were facing pressures from “massive rent increases.”

At least as the service station operators saw it, the oil companies could already see the opportunity in booting them out and building bigger gas station/C-store operations, without service bays, on the properties.

In the midst of that battle, Missouri legislators stepped in with a bill to require gas stations to be owned by separate retail service station operators, in an effort to protect small businesses. Other states including Maryland had previously enacted similar laws. But during that same era—which of course included the Reagan years—government regulation of big business was losing popular support.

So the trend continued of “service station bays closing as ‘C-stores’ keep growing,” as noted by the Lexington (KY) Herald-Leader (December 3, 1984). It set the stage for the landscape we see today across much of the country, dominated by the big convenience store with numerous pumps out front and no repair shop.

Environmental regulations, however necessary, took their toll on small operators as well. One of the potential environmental hazards of a gas station is the possibility that the underground fuel tanks could spring leaks and contaminate groundwater. The issue became the subject of national attention in the early 1980s, and in 1984 President Reagan signed a bill into law directing the EPA “to protect our nation’s land and water from underground storage tank (UST) leaks.”

The cost of replacing leaking tanks, along with related insurance costs, proved burdensome on small gas station operators, along with the cost underground storage tank liability insurance.

Consider, for example, the experience of Ray Welch, a small gas station operator in Arlington, Virginia, who, as reported by USA Today (December 8, 1989), had to exit the fuel business when faced with a cost of $150,000 to replace aging tanks and install leak detectors, plus $9,000 per year for insurance.

For some perspective, in today’s dollars that’s equivalent to over $316,000 for the tank replacement with an insurance cost of nearly $20,000—substantial sums for a small business.

Rather than bear those costs, Welch removed his tanks and shifted his business to car repair only. His experience was far from unique. Stories like his played out across the country. By the EPA’s own estimates at the time, more than half of independently owned gas stations in the U.S. were expected to be unable to afford the expense of replacing and insuring underground tanks.

Another factor in the shift, however, was the simple market reality that there is more money to be made in the C-store business than there is in the gas station or auto repair business.

The Lexington Herald-Leader, for example, noted on December 3, 1984, that the number of service stations had declined by more than half, with many converting to convenience stores (retaining gas pumps but not garage bays) as “oil companies and individual owners discovered that they could make more money selling bread and milk than they could from gasoline and repair services.”

It all paints a big picture of a trend toward consolidation that has affected numerous industries from hardware to healthcare. One can argue that it’s the inevitable result of the workings of the invisible hand of the market, but it is legitimate to ask questions about just who in the marketplace benefits.  

The gain in this scenario for oil companies and large convenience store chains is clear, but opportunities in this industry for individual entrepreneurs also clearly declined. Consumers were left with fewer choices in where to buy gas and repair their cars. Less competition generally leads to higher prices, fewer choices of what you can buy, or both.

Who else loses in this equation? Possibly those who aspire to work as automotive technicians, who as a result of these changes may have fewer workplaces to choose from. In the late 1980s I knew of a good mechanic at a small local gas station in Montgomery County, Maryland, who was pulling down a salary of $50,000 per year. That’s equivalent to a salary of well over $100K in today’s dollars. 

While government regulations are often bashed as an inflationary factor, the Seattle Times (March 6, 1985) reported that Maryland’s legislation passed in the mid 1970s to prohibit oil companies from owning gas stations seemed to work, noting that gas prices in Maryland at the time were consistently below those in neighboring markets with gas stations closing at a fraction of the national rate.

Maryland’s history of protecting individual ownership of gas stations no doubt explains why it is one of the areas of the U.S. where you seem more traditional gas stations. While you also now see plenty of examples in Maryland of the modern big C-store/gas station model, the difference is stark when you cross the line into Maryland from Pennsylvania, for example. It is simply much more common in Maryland to see a gas station that is just a gas station, and some of them still have service garages. One example is Glenmont Sunoco (formerly Glenmont Exxon) in Silver Spring, Maryland.

For a good 15 years or more, that prime example of the great American gas station was my go-to shop for keeping my cars in great running condition at a reasonable cost, in the time period during which the longtime community mainstay was still owned by the late James Richard Lowery, who passed away in 2002.

Lowery’s is really a classic American story of upward mobility through small business. According to his obituary in the Washington Post, Lowery first bought Glenmont Exxon in the early 1960s, after working “at an Exxon station in the Chevy Chase Lake neighborhood” in Maryland.

I started doing business with him after learning by word of mouth of his reputation as a repair shop owner that consumers could rely on for honest, quality work at a fair price.  In my experience, Mr. Lowery and the small team of techs he employed always lived up to that reputation. Compared to alternatives, it was a matter of differences that might seem small at a glance but can really add up.

With dealerships, of course, there was no comparison, based on the shop labor rate alone, which could be a whole-number multiple of what a small gas station and repair shop might charge. The more relevant comparison might be to places like a national name-brand auto repair chain.

For example, if I knew I needed brake work and took my car to a muffler and brake franchise, I might be told that I would need not only new pads, but also new calipers and rotors. But if I then went to Glenmont Exxon, Mr. Lowery’s tech might tell me that my calipers were fine and just needed their slides lubricated, and that my rotors still had enough meat on them to be machined to a renewed surface.

At the time, that contrasting approach—retaining parts that just needed some simple maintenance vs. unnecessarily throwing all-new parts at a vehicle—could make a difference between a $300+ brake job and a $150 or less brake job. That’s significant for someone striving to maintain a car on a shoestring.

Owned since approximately the late 1990s by John Hyon, the former Glenmont Exxon location, now operating as Glenmont Sunoco, continues to enjoy a solid reputation today, as evidenced by their 5-star rating from Consumers’ Checkbook.

I continued to do business with Mr. Hyon for a few years after he bought the station. And although it wasn’t quite the same experience as it was under Mr. Lowery, it was still pretty good—good enough for Glenmont Sunoco to still deserve a rating as a rare remaining example of the great American gas station.

On the other hand, it’s important to understand that not all gas stations with auto repair services offer such an exceptional experience when it comes to honest work at a fair price. It can really be hit or miss. It all depends on the integrity of the owner and of the techs the owner hires. I have seen good shops go south, either with a change of ownership or with an owner who pulls back from micromanaging day-to-day operations and delegates responsibilities to a service manager who might be less honest or more self-serving.

As always, it’s a matter of buyer beware. The “past performance does not guarantee future results” disclaimer applies to gas stations with auto repair shops just as much as it does to stock market investments. Your positive experiences with a particular shop in the past, unfortunately, do not guarantee that your future experiences will live up to them.

And as time continues pass, we can’t expect the trend away from the small gas stations with auto repair shops to reverse, especially if the current vision of an all-electric-vehicle future actually materializes.

In the meantime, however, we still have a few choices for car repairs other than the big retail car dealers. Independent repair shops without gas stations, of course, continue to be an option.

Although these establishments, too, can be hit or miss when you’re in search of honest, quality work at a fair price, they occupy an important niche and may continue to do so even as the shift toward alternative fuels continues.

But you can also realistically expect the great American gas station to be an increasingly rare anomaly.

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