The car wash industry is booming in the United States. According to the Commercial Real Estate Development Association, over three-quarters of American consumers utilize car wash facilities. Which is sure to make potential investors wonder: how much does a car wash cost?
The high-profit potential of starting a car wash business – from $100K to $250K annually – is especially attractive to entrepreneurs, but it’s important to consider the initial investment and operating costs of getting a car wash facility off the ground.
When learning how to start a car wash business, many factors will influence the amount of capital you’ll need. In this article, we’ll go through the different factors and types of costs you can expect.
Factors Influencing the Cost of Starting a Car Wash
How much does it cost to start a car wash business? There’s no one-size-fits-all estimate. With that said, car washes will cost somewhere between $250,000 and $500,000 at the low end, on up to into the millions for more sophisticated car washes in prime locations.
But there’s more to a car wash than just capital and overhead costs. Below are some primary variables influencing the cost of opening a car wash facility that you should be aware of.
The Type and Scale of the Car Wash Investment
The cost of starting a car wash largely depends on the type of business you want to create. A small-scale automatic car washing machine such as a tunnel car wash station may not require a huge staff to maintain, but the equipment costs and ongoing maintenance expenses can get expensive, especially if you’re purchasing higher-end components like touch screens or cutting-edge sensors.
Operating costs tend to be easier to manage with a self-service car wash business. With less complex equipment, overhead costs for repairs and replacements remain fairly consistent. However, self-service car washes use an enormous amount of water compared to an automatic car wash, potentially leading to substantial monthly utility bills.
You could also open a full-service car wash operation that combines both options. This type of car wash relies on high volumes of customers each day and a full crew of laborers who specialize in various areas, such as detailing or waxing. Full-service car washes can offer a much higher profit potential by providing a more convenient customer experience than self-service businesses, but initial construction costs can be significant. You’ll also have to factor in higher equipment costs, payroll for more staff, and the recurring costs of chemicals or supplies.
Location Considerations and Real Estate Expenses
Like in residential real estate, the average cost of land for your business will fluctuate depending on location. If you’re hoping your car wash will attract a wealthier customer base, you should be prepared to pay more for a lot in a desirable area. You’ll also want to consider the costs of any improvements the location may need, such as water and drainage hookups, pavement resurfacing, or lighting additions.
Equipment and Machinery Costs for a Car Wash Business
One of the most substantial startup costs for a new car wash is procuring car wash equipment, machinery, and replacement components. These expenses will vary based on the type of car wash you plan to run.
For self-service or full-service car washes, you’ll need pressure washers, water tanks, and reservoirs for the various chemicals used in washing vehicles. This can all cost around $10,000 to $20,000 per self-service bay.
Modern automated car washes have many sophisticated pieces of equipment working in tandem. Some parts will inevitably break down, so you’ll likely want to invest in spare components to expedite repairs.
Licensing, Permits, and Regulatory Compliance Expenses
You should also factor in the costs of compliance. Check with your state and local agencies to learn what permits or licenses you’ll need to open your business. In general, business licenses cost a few hundred dollars, depending on what you must acquire.
Some state or local authorities may have more stringent environmental compliance standards for managing wastewater or maintaining equipment, so be sure to thoroughly research regulations in your area ahead of time.
In addition to state or local compliance standards, there are also various environmental and safety standards proposed by the EPA that will ensure your car wash follows all regulatory guidelines. You may want to budget for a consultant who can help you ensure adherence to all the standards and regulations that apply to your business.
Construction and Infrastructure Costs When You Buy a Car Wash
When prospective business owners consider how much it costs to start a car wash, the first car wash investment that often comes to mind is construction costs. The projected initial investment to build a car wash can range from a few thousand to several million dollars or more, depending on your operation’s size, scope, and sophistication.
In addition, it’s important to remember that car washes require various infrastructure upgrades to function correctly, such as grating for drainage, car wash pits, or water recycling systems. Additional construction costs may include signage, upgraded plumbing, landscaping, and painting designated parking or vehicle queue areas.
Operational Expenses and Ongoing Costs
Wash companies also need to budget for the recurring costs of a car wash business:
- Employee wages
- Business loan payments
- Utility bills
- Rent for commercial or office space
- Equipment repair
- Maintaining a stock of wash chemicals and other supplies
State and federal taxes will also affect your expenses. (Can’t forget about Uncle Sam when answering the question ‘how much does a car wash cost’).
Unlock Efficiency and Success in Your Car Wash Investment Venture
At National Carwash Solutions, we provide complete, high quality car wash solutions. From car wash equipment installation and repair to comprehensive training that covers all the basics of running a car wash, we’ll ensure your carwash operates at peak efficiency around the clock. NCS has remained a leader among car wash equipment manufacturers for over five decades. Our partnerships with today’s most trusted industry brands allow us to provide the top-tier chemicals, aftermarket parts, and technical support your car wash needs.
To learn more about how National Carwash Solutions can help make owning a car wash a success and a pleasure, contact us today.