As of 2024, there are approximately 290,000 auto repair shops in the United States representing a total market size of $188.1 billion. But how profitable really are auto repair shops? How much do you really need to invest to start one? How much turnover do you (really) make on average with an auto repair?
In this study, we look at the financial data from over 3,300 real auto repair businesses in the United States to give you real, up-to-date answers to these questions.
The data is from 2023 and publicly available. It includes the revenue, costs and profit data of 3,300 auto repair businesses of some of the largest 20 franchises in the US (Carstar, Fix Auto USA, Car-X and the like).
Whether you’re considering starting your own auto repair shop or looking to understand the financial dynamics of the industry, this article offers a detailed look at the key factors that influence profitability and return on investment.
We’ll be diving into a few questions specifically:
- How much revenue does an auto repair shop make?
- How much does it cost to start an auto repair shop?
- How profitable is an auto repair shop?
How much revenue does an auto repair shop make?
Analyzing data from about 2,800 real businesses, we found that auto repair businesses make $1,226,000 in revenue per year on average.
Of course, revenue from one auto repair to another vary widely depending on various factors such as location, services offered, and business scale. Here is the detailed data:
| Franchise | Number of Businesses | Median Revenue |
|---|---|---|
| Tire Pros | 623 | n.a. |
| Carstar | 430 | $2,265,000 |
| Fix Auto USA | 178 | $2,391,000 |
| Car-X | 145 | $778,000 |
| Merlin Complete Auto Care | 24 | $1,150,000 |
| Tuffy Tire and Auto Service | 163 | $1,344,000 |
| Abra Auto Body & Glass | 57 | n.a. |
| Honest-1 Auto Care | 64 | $1,149,000 |
| Maaco | 398 | $1,281,000 |
| Meineke Car Care Centers | 705 | $897,000 |
| Rad Air Complete Car Care | 10 | $1,102,000 |
| Weighted Average Revenue | 2,797 | $1,225,778 |
How much does it cost to start an auto repair shop?
On average, it costs between $235,000 to $1,348,000 to start an auto repair shop. We heard you, that’s a big range. Well it obviously depend on a lot of factors.
Now, before we look at what kind of startup costs you can expect, let’s have a look at the detailed data from the same 3,000 businesses below:
| Franchise | Low Investment | High Investment |
|---|---|---|
| Tire Pros | $12,000 | $483,000 |
| Carstar | $298,000 | $804,000 |
| Fix Auto USA | $170,000 | $3,090,000 |
| Car-X | $315,000 | $512,000 |
| Merlin Complete Auto Care | $265,000 | $534,000 |
| Tuffy Tire and Auto Service | $229,000 | $729,000 |
| Abra Auto Body & Glass | $264,000 | $4,569,000 |
| Honest-1 Auto Care | $223,000 | $998,000 |
| Maaco | $276,000 | $1,016,000 |
| Meineke Car Care Centers | $227,000 | $562,000 |
| Rad Air Complete Car Care | $146,000 | $573,000 |
| Average Investment | $235,000 | $1,348,000 |
Startup Costs For a Medium Sized Auto Repair ($200,000 – $500,000)
On average, you would spend about $200,000 to $500,000 to start a new medium-sized auto repair business. Here’s a detailed list of startup costs you can budget for:
- Equipment and Fixtures: Costs for acquiring necessary equipment and fixtures for the business. Range: $131,000 – $193,000
- Inventory: Initial stock of parts and supplies. Range: $5,000 – $24,000
- Leasehold Improvements: Costs for improving the leased property to suit business operations. Range: $8,000 – $64,000
- Training Expenses: Costs associated with training employees before opening. Range: $3,000 – $5,000
- Pre-Opening Expenses: Various expenses incurred before opening, such as utility deposits and setup fees. Range: $10,000 – $20,000
- Grand Opening Advertising: Initial marketing and advertising costs to promote the opening of the business. Range: $7,500
- Signage: Costs for designing and installing business signs. Range: $20,000 – $100,000
- Business Licenses and Permits: Fees for obtaining necessary licenses and permits from local authorities. Range: $500
- Real Estate Costs: Initial rental costs for the business premises. Range: $0 – $30,000
- Additional Funds (3 months): Working capital to cover operating expenses for the first three months. Range: $10,000 – $50,000
- Insurance (3 months): Insurance coverage costs for the first three months. Range: $4,000 – $5,000
How profitable is an auto repair shop?
Auto repair shops report on average a 26% operating profit margin. Operating profit indicates the profitability after accounting for all operating expenses but before taxes and interest.
Here’s a detailed list of the main profitability metrics by some of the largest auto repair franchises in the United States:
Profitability Metrics for Auto Repair Franchises
| Franchise | COGS % | Gross Profit % | Labor Costs % | Operating Profit % |
|---|---|---|---|---|
| Car-X | 35.2% | 64.8% | 30.3% | 19.9% |
| Merlin Complete Auto Care | 28.1% | 71.9% | 16.1% | 38.6% |
| Tuffy Tire and Auto Service | 30.8% | 69.2% | 28.2% | 26.3% |
| Meineke Car Care Centers | 26.3% | 73.7% | 19.2% | 24.2% |
| Rad Air Complete Car Care | 25.3% | 74.7% | 24.7% | 21.0% |
| Average | 29.14% | 70.86% | 23.7% | 26.0% |
How Much Does It Cost to Run an Auto Repair?
The main costs to run an auto repair business range from COGS, direct and indirect labor costs, and operating costs like insurance, maintenance, marketing, etc. Here’s the detailed list.
- Cost of Goods Sold (COGS): Direct costs associated with providing repair services, such as parts and materials. Example: 25-35% of revenue.
- Labor Costs: Wages, benefits, and other compensation for technicians and support staff. Example: 16-30% of revenue.
- Rent and Utilities: Cost of leasing or renting the business premises and paying for utilities like electricity, water, and gas. Typically 5-10% of revenue.
- Marketing and Advertising: Expenses related to promoting the business, including online advertising, print media, and other marketing efforts. Approximately 1-5% of revenue.
- Insurance: Insurance premiums for general liability, property, workers’ compensation, and other necessary coverage. Approximately 2-4% of revenue.
- Supplies and Equipment Maintenance: Costs for maintaining and replacing tools and equipment, as well as purchasing consumable supplies. Approximately 2-5% of revenue.
- Administrative Expenses: General overhead costs, including office supplies, accounting, and other administrative functions. Approximately 5-10% of revenue.
- Training and Development: Expenses for ongoing training and development of staff to keep up with industry standards and technological advancements. Approximately 1-3% of revenue.
- Miscellaneous Expenses: Other operational costs that do not fall into the above categories, such as travel expenses, uniforms, and software subscriptions. Approximately 1-3% of revenue.
Example of a Auto Repair Profit-and-Loss (Maaco)
Here is the profit-and-loss of Maaco auto repairs (398 businesses in 2024) earning about $1,340,000 in yearly revenue and reaching 16.8% in operating profit per month.
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Auto Repair Financial Model Template
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Auto Repair Financial Model Template
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