How Much Does It Cost to Start a Car Wash?
Looking to start a car wash? Everything you need to know about starting a car wash and the potential earnings are provided here.
Even though a car wash can generate up to $900,000 annually, starting one requires extensive research, a significant upfront investment, and a lot of work. Whether or not you already have the property lot depends on the type and size of car wash you choose to build.
In this article we’ll go through all the different costs you will need to incur to start your own car wash business.
Car Wash Startup Costs
The costs involved in starting a car wash business depend on the level you plan to operate. Assuming you do not buy the land and the building but decide to rent instead, typically startup costs will represent anywhere from $50,000 to $150,000 depending on the type of car wash you operate.
For instance, the equipment for the most sophisticated type of car wash (touchless washing) can range in price from $20,000 to $100,000.
Car Wash Bay Costs
The next step is to construct the carwash bay after renting or purchasing. Usually, you have to build the carwash bay, lay a solid foundation, and take care of the landscaping. Building a decent carwash bay will cost you about $42,000.
Car Wash Licenses and Permits
To provide services for washing, detailing, drying, polishing, vacuuming, and other cosmetic maintenance of vehicles, you must hold a carwash license. Carwash permits and licenses are available for application online. A carwash license in New York City typically costs $550.
Car Wash Equipment Costs
You will have to spend money on the equipment in addition to building the carwash bay. The average cost of carwash equipment varies depending on the carwash services you plan to provide. A self-service carwash bay typically costs between $8,000 and $10,000. The equipment price ranges from $31,000 to $100,000 for an automatic carwash bay.
All in all, see below an example of the total startup cost to start a car wash business:
Car Wash Operating Costs
In addition to the one-off startup costs, you must also consider the total recurring cost of running a car wash business. The expenses vary depending on the number of cars you wash per month and your services.
Salaries & Commissions
Depending on the volume of vehicles they clean, you can pay carwash attendants a monthly salary or a commission. According to Indeed.com, the average hourly wage for a car wash attendant in the United States was $15.38.
Utility Bills
For businesses that operate car washes, water and electricity are among the most significant costs. Water in particular, which depends on the kind of car wash you are running. For example:
- A high-volume car wash with 100 cars a day would consume approximately 105,000 gallons a month which would cost approximately $1,000 a month (assuming $10 per 1,000 gallons)
- An automatic touchless car wash with 100 cars a day would use in comparison 210,000 gallons a month, costing approximately $2,000 a month in water expenses
As you can see, your monthly water costs can vary greatly depending on the volume, the type of car wash, and the price per gallon you are paying. When you determine the prices that customers will pay, be sure to allocate a suitable budget.
Rent
Car wash lots typically range in size from 5,000 to 10,000 square feet. Depending on the location and size, renting the carwash lot ranges between $5,000 to $25,000 per month.
Marketing
Spending money on marketing and advertising will be necessary. Car wash are local businesses, so it will mostly be offline marketing expenses (vs. online marketing) which can include billboards, posters, partnerships with companies, radio ads, etc.
Supplies
Finally, you’ll require a monthly spending plan to pay for soaps, sponges, dryers, brushes, and other car wash supplies. Depending on how many vehicles you’ll be washing, the average monthly cost for car wash supplies ranges from $1,000 to $5,000.
Miscellaneous
You will also need to budget additional funds for costs such as phone subscriptions, HR and finance software, bookkeeping, etc. in addition to the expenses listed above.
The total operating cost to launch a car wash business is shown below as an example (per month). In other words, for the first few months, you will need to spend $20,000 per month to operate your car wash.
Different Car Wash Types and Their Average Car Wash Income
In-Bay Automatic Car Wash
The in-bay automatic car wash doesn’t take up much room and can be easily added to an already established company, like a gas station or a mechanic shop. Additionally, it doesn’t require much labor because it begins operating automatically as soon as the customer pays and enters the bay.
This particular style of car wash typically costs $6.34 with a $4.35 profit per wash. Following the exterior conveyor car wash and full-service car wash in terms of potential profit, it comes in third. On average, it can make an annual income of $139,000, which can result in an average profit of $86,531.
Exterior Conveyor Car Wash
Due to some similarities in how the service is provided, the exterior conveyor car wash, also referred to as the tunnel car wash, is frequently compared to fast-food drive-throughs. Your car would move forward to receive the service in an exterior conveyor car wash, just like in a fast-food drive-through, but from a variety of car wash machines.
Next to the full-service car wash with a small difference, it is one of the car wash types with the highest profits. The in-bay automatic car wash costs $15, more than twice as much on average. You can make an average yearly income of $686,250 with this kind of car wash.
Full-Service Car Wash
Cleaning services are offered for the interior and exterior of cars at the full-service car wash. It provides additional services, including vacuuming and car detailing services for car interior. An in-bay or conveyor car wash may be used to perform the exterior service in some circumstances.
Although it is the most expensive type of car wash, it also has the potential for the highest profit. The average charge for this car wash is $15, which is also more than double the cost of an in-bay automatic car wash. Additionally, 20% of this type of car wash would charge $18 or more. So they slightly earn more than an exterior conveyor car wash.
Self-Serve Carwash
Similar to the in-bay automatic car wash, the self-serve car wash is a great addition to an already established company like a gas station or rest area because it also doesn’t require labor from the self-serve car wash owner.
The customers themselves will do the car washing by simply inserting cash into a machine to start the car-cleaning machinery.
It has lower business traffic and lower profits than the aforementioned car wash varieties. However, as an added service to an already established business, it’s unquestionably a great way to generate extra revenue. This is a low-cost enterprise that can generate $1,489 per bay each month and an average annual revenue of $41,000.
Summary
A car wash can be expensive. But hopefully the analysis above gives you a useful starting point and some guidelines for determining how much money you should budget for the planning and construction of the car wash you’re thinking about.
As per SBA’s own definition, the break-even point is the point at which total costs and revenue are equal. In other words, when you generate enough revenue to cover your expenses, you have reached the break-even point.