There are millions of cars on the road, and the number of those cars is increasing every single day.
Associated with that, car wash businesses are one of the mandatory businesses that people will always need.
That’s why car wash businesses are generally a good idea to own because they could be very lucrative without much risk.
You might be considering opening a car wash and entering the market. Then, you might be wondering how much you will spend on opening that car wash and what the costs are.
This article will go through the details of the costs of opening a car wash and anything around the topic.
Average Cost to Open a Car Wash
The cost to open a car wash depends on many variables, like opening any kind of physical location for a business.
The average startup cost for any type of car wash is between $500,000 to $850,000.
However, everything included is over $2 million and goes up to $6 million on the high end. Here is a breakdown of common costs.
| Cost Type | Low End | High End |
| Building & Site | $1.5 million | $3 million |
| Equipment | $500,000 | $2 million |
| Marketing | $50,000 | $250,000 |
| Permits | $75,000 | $275,000 |
| Third-Party Costs | $0 | $500,000 |
| Total | $2.1 million | $6.2 million |
The biggest expenses for opening a car wash are generally the equipment and the land.
If your land is already ready or you own the land and do not rent it, then your expenses could be extremely lower than the average. Another thing that also counts is the type of car wash you will open.
If you are thinking of opening an automatic car wash, they generally cost more because the equipment is about 4 or 5 times more expensive than the self-serve bays.
For example, self-serve bay equipment costs $10,000 at maximum. The automatic bays could cost up to $50,000. This will substantially increase your total cost when opening a car wash.
Also Read How Much Does Car Wash Owners Make?
Type Of Costs To Open A Car Wash
When you are opening a car wash, the only costs you should consider are not the startup costs that you pay before you start operating.
There are also other types of costs that affect the total cost to open a car wash that you accumulate every month.
These costs happen after you open the business, and they are recurring costs.
Startup Costs
Startup costs are one-time expenses that you pay before the car wash starts operating.
These costs include site selection, construction, equipment installation, licenses and permits, insurance, and other professional fees.
| Bay | $42,000 |
| Equipment | $20,000-$800,000 |
| Licenses & Permits | $500-$1,000 |
| Construction | $0-$1 million |
Equipment costs mostly depend on your personal choice, how many you will have, and which quality you will go for.
The other costs do not take up much space on the total startup costs, and they change based on where you will be operating.
Fixed Costs
Fixed costs remain constant regardless of the number of customers you receive. This includes rent or mortgage payments, utilities, property taxes, and employees’ salaries and benefits.
Rent and mortgage payments are generally the highest fixed costs and vary depending on the location and size of the car wash.
| Employee Salaries & Benefits | $5,000-$10,000 |
| Utilities | $500-$1,000 |
| Rent & Property Taxes | $0-$10,000 |
| Marketing | $1,000-$5,000 |
Rent and property taxes of the car wash’s land are based on the value of the land and building. Your insurance premium might be included in your rent or property tax.
Employees’ salaries and benefits depend on how many employees you want to have and what kind of benefits you want to give to them.
Variable Costs
Variable costs are the expenses that change each month depending on the number of cars you wash and the customers you serve.
They generally include cleaning supplies, water, chemicals, and maintenance costs.
Cleaning supplies include soap, wax, towels, and other supplies used in the wash bays. Maintenance costs are repairing equipment, replacing parts, and cleaning the facility.
These costs vary significantly based on the age and condition of the equipment.
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Factors That Affect The Cost Of Opening A Car Wash
All the related costs to open a car wash, startup, fixed, and variable costs, have factors that affect these costs.
Generally, these factors are similar to each other because the one-off startup costs could affect your fixed costs, such as the location of the building.
If your location is in a central or expensive location, it will be expensive to do construction work, and also, its rent will be higher.
That’s why these factors could generally affect the entire picture. However, there are also factors that only affect the type of costs they are associated with.
These are the factors that affect the cost of opening a car wash:
- Location: The location will have a significant impact on the overall car wash business’ cost. Real estate prices change a lot depending on the area, and some locations may require more expensive permits or zoning requirements. In addition, if the building is in a problematic area, there might be extra construction costs.
- Size And Design: The car wash’s size and design will also play a role in your overall costs. A larger car wash with more bays and advanced equipment will be more expensive than a smaller, more basic car wash.
- Type: Depending on the type of car wash you want to open, the costs will change drastically. Self-service car washes are not the same as full-service ones.
- Equipment: Which type of equipment and its quality will also have an impact on the cost. High-quality equipment will be more expensive but may be a better choice in the long run, cost-wise. Maintenance costs also change depending on the quality of the equipment that will incur from time to time.
- Labor costs: The type of car wash will also affect your labor costs. Automated car washes definitely requires less labor than full-service car washes but may still require some staff to operate and maintain the equipment. However, if you are operating a fully self-serve car wash, there might be a need for more employees and maintenance work.
How Much Does a Car Wash Make?
The average income of car washes mostly depends on the car wash’s type, location, and size.
On average, including all types of car washes, the average annual revenue is between $40,000 to $900,000.
Here are detailed explanations per type of car wash:
| Automatic Car Wash | $90,000 |
| Full-Service | $500,000-$900,000 |
| Conveyor | $650,000 |
| Self-Service | $40,000 |
Automatic Car Wash
These types do not require a lot of space and labor and can easily be added to shops like gas stations or mechanic shops. That’s why the profit margin is high, leaving about $4 of profit per wash.
Full-Service Car Wash
Full-service is the most expensive car wash, but it generates the highest revenue and profit most of the time.
They require intense labor and maintenance costs, and the profit margin is low per wash.
Conveyor Car Wash
Sort of similar to the automatic car wash, this car wash puts the car on a motorized track and cleans it through the tunnel.
The profit margin is rather low and requires high maintenance, but it can serve more customers in a day.
Self-Service Car Wash
Self-service washes are the ones with the lowest labor and maintenance costs because the customer cleans the car themselves. They are generally one of the most favorable ones for car wash businesses.
Self-service car washes don’t take up a lot of space, and it has low labor and maintenance costs, but the price and overall revenue are the lowest.
Conclusion
The cost of opening a car wash is not easy to figure out as there are many factors affecting the costs.
The average is between $500,000 to about $1 million, but it could be well above or below this number, depending on your goals.
The car wash’s type, location, size, design, equipment quality, and other details are all important factors affecting the overall cost.
However, a car wash business could be very lucrative as full-service or conveyor type of car washes could generate up to $900,000 in annual profits on average.
If you are thinking about owning a car wash business, it could indeed be a great choice, but you must first have a goal first and understand the overall costs.
FAQ
Can I finance the costs of opening a car wash?
There could be financial institutions or banks that will give you loans to finance these associated costs.
However, it mostly depends on your current financial situation and whether you are eligible.
Can you fail with a car wash?
Similar to running any kind of business, if you can’t manage the business well, you may fail.
It depends on several factors, but car wash businesses are overall lucrative businesses, so the chances are mostly lower than some types of other businesses.
How long does it take to recoup my initial investment in opening a car wash?
You can’t exactly know this because each initial investment and the profit range of a car wash are different.
The best way to estimate this is to forecast your annual revenue and calculate it by using the total investment you have.
Amit Gupta is the founder of DrFranchises – a digital marketing agency that helps brands rank better on Google Maps through local SEO strategies. Amit has over 11 years of experience in digital marketing, SEO, email marketing, and social media marketing. He’s also the owner of multiple franchises and has helped countless brands achieve success online. When he’s not working, Amit can be found playing with his dog.