The demand for car washing services has grown steadily over the past few years, hitting $15 billion in 2022. Buying a car wash or opening a new one could be a promising venture. But how profitable is a car wash? And is a car wash a good investment?
While the car wash industry has huge earning potential, it’s competitive and takes a significant up-front investment. But with the right approach and a little luck, you can take this business model to new heights.
How Much Do Car Washes Make?
Many would-be car wash owners start by asking key questions like how much money you can make owning a car wash and how much a car wash makes in a year. The answers depend on many factors, but some preliminary research can help you get a sense of what your return on your investment might look like.
A car wash’s annual profit depends a lot on the kind of car wash you’re running in the first place. For example, a small, self-service car wash can earn around $40,000 annually. In-bay automatics generate on average $85,000 per year. A bigger car wash conveyor business (exterior of car only) comes in just shy of $700,000 a year. Full service car wash businesses earn on average between $500,000 and $900,000 as of 2023.
Larger car wash businesses, including those with an in-bay automatic or tunnel car wash, tend to make more over time but require a much higher startup cost. While less profitable, other car washes – like self-service washes – are far less expensive to get off the ground. There are also plenty of variable costs to consider in the wash industry, like labor expenses, water bills, franchise fees, and the cost of daily operation.
Revenue Streams in a Car Wash Business
More than 72% of drivers in the U.S. say they frequently use professional car wash services. Car wash owners capitalize on this demand using one of three revenue streams.
Car Wash Service Charges and Additional Services
Most car wash revenue comes from the service charges. For an automatic car wash, you can expect to see income of between $3-$10 per wash. Full-service car washes can earn the most – around $15 to $25 per vehicle – because they offer internal and external cleaning services.
Additional services can also add to your revenue. Think of add-ons like vacuuming, waxing, interior deep-cleaning, and other detailing services.
The amount of revenue will also depend on your target market — a generic, self-serve car wash in a rural area might not make as much as a full-service car wash serving luxury car owners.
Membership and Subscription Plans
Some car washes operate using a subscription model. For drivers who expect to get more than one car wash a month, signing up for a subscription plan can be more cost-effective. Plans usually start around $20 for unlimited washes, but more expensive packages can include other services, like interior cleaning and detailing.
A subscription program can help your car wash business bring in a more consistent monthly income, even in the slower rainy seasons. It’s also a great way to reward loyalty for repeat customers.
Vending Machines and Retail Products
While customers will spend most of their money on car wash services, drivers can also use on-site vending machines to purchase snacks, drinks, air fresheners, and other car maintenance products. For self-service car washes, customers can purchase materials to help with their wash, like glass cleaning kits or towels.
Key Elements That Impact Profitability
Not every car wash business owner will bring in the same revenue. Also, while the size and type of car wash play a role, plenty of other factors can affect your profitability.
Location, Target Market, and Area Competition
For a car wash business, location is everything. Most customers don’t think to use a car wash until seeing signs when driving by. That means if your business and its signage aren’t easily visible from the side of the road, you won’t attract enough people to keep your business going.
It’s also essential to research the neighboring community. Are the people in the area likely to use car washes? Is there heavy commuter traffic? Is it densely populated? Does it rain often, reducing the need for a car wash? And most importantly, what kind of competition will you be up against?
Pricing Strategy
Car washes typically have low overhead costs and can service a high volume of drivers every month, which is what makes them so profitable. If prices are too high for the services you provide, you could lose that high volume, and your revenue could dip. But if prices are too low, even a high volume of customers might not be enough to keep up with operational costs.
One pricing strategy is to analyze the prices of similar businesses in your area to ensure you remain competitive. But if the target market in your area can afford it — and you have the value to back it up — don’t be afraid to increase the price. Some customers will be willing to pay extra for premium products and services.
Operational Efficiency and Productivity
When hundreds of drivers go through your car wash every week, efficiency is everything. The more productive and cost-effective your day-to-day operations are, the less money you’ll lose to costs like labor, maintenance, equipment, utilities and more.
To keep up with customer expectations for a fast and effective wash, operators should always maximize the performance of their equipment. This can mean investing in quality equipment and effective cleaning chemicals.
Customer Satisfaction and Retention
Having a successful car wash business is about more than just attracting new customers. It’s also about delivering an exceptional customer experience that keeps them coming back for more. Subscription models, loyalty programs, discounts and complimentary add-ons can also improve customer retention. But it all comes down to the quality of your wash. Did the vehicle come out clean, dry and shiny the way it should?
Marketing and Promotional Efforts
Marketing strategies can increase brand awareness to attract new customers. The best ones provide enticing offers that keep customers coming back for more. Hands-on marketing can include sending out flyers and putting up eye-catching signs. But you can also use social media, website bookings, and online ads to promote your business locally.
Partner With the Industry’s Leading Carwash Company To Maximize Business Success
Starting a car wash business can be lucrative if you’re willing to make a significant investment. But to achieve the full profit potential of carwash requires the right solutions, know-how and guidance. Working with NCS for all your car wash is a great way to get the best results.
National Carwash Solutions is the largest provider of car wash equipment and supplies. We have the quality carc wash equipment, parts, service and chemistry you need to make your wash a winner in the competitive car wash industry. Contact us today to get started.
