Car washes continue to be a big business in America. According to the International Carwash Association, up to 77% of car owners report using car washes regularly, up from 48% a couple decades ago. Life is busier, car washes are convenient and carwashes are (correctly) perceived as being more eco-friendly than washing cars at home.

Recent economic headwinds have slowed the pace of industry growth. But the substantial profit potential and steady annual growth rate of owning a car wash continue to make this business venture an attractive investment. Maybe one reason why the demand for car washing services has grown to $15 billion in recent years and will grow by two billion more by 2030.

A Look at the Numbers

What are the expected returns on car wash investments? There are many variables, especially 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.

If you’re looking to invest in a car wash, read on to learn essential details that all prospective business owners should know before breaking into this booming industry.

Different Types of Car Washes

The profitability and estimated operating costs of car wash investments will vary depending on the type of business you plan to run. Before you decide on buying a car wash business, you’ll want to consider which option is right for your long-term investment goals and overall budget. 

Self-Service Car Wash

Thanks to their relatively low startup cost and reasonable overhead expenses, self-service car washes make an excellent investment for new entrepreneurs with limited startup capital. As the name suggests, these businesses provide customers with equipment, such as a high-pressure hose and foam brushes, to wash their vehicles.

While this type of car wash tends to produce modest profits, you won’t need to worry about maintaining expensive automated equipment or paying for the labor costs of multiple wash operators. Best of all, self-service car washes can operate around the clock with little to no supervision.  

Automatic Car Wash

Also known as a tunnel car wash, an automatic car wash offers customers enhanced convenience by carrying their vehicles over a conveyor system where automated wash equipment and sophisticated sensors do all the work. Customers only need to select the wash service they want at the tunnel entrance, pull the vehicle into the bay, and let the machines take care of the rest. 

This type of car wash often resides outside a gas station, mechanic shop, car dealership or other locations where traffic tends to concentrate. It can produce more income than its self-service counterpart, but keeping up with maintenance, component replacement, and refilling chemical reservoirs can become an ongoing challenge.

Luxury Car Wash

If you’re in the right market for it, you can also invest in a luxury car wash. These car washes typically feature automated washing bays supported by a large crew of experienced workers who help direct traffic and perform various deluxe services like interior detailing, towel drying the vehicle exterior, or other custom services. 

Although professional car washes are the most expensive to maintain, they also tend to attract a wealthy customer base willing to pay more for premium services.

Key Factors To Consider Before Investing in a Car Wash

Here are additional important factors that every car wash investor should bear in mind before making any decisions.

Steady vs. Seasonal Business Demand

Before you purchase a car wash for sale, bear in mind that the lion’s share of annual revenue from these businesses tends to come during the winter months. Throughout the summer, customers are more inclined to take advantage of the warm weather to wash their vehicles themselves, which can cause a slump in overall demand.

Car wash owners seeking to maintain a steady income during the slower months should offer discounts and promotions to attract more customers. However, if sales are substantial during the winter, it may be worthwhile to use the downtime over the summer or fall to repair wash equipment, upgrade signage, or renovate the property.

Market and Financial Projections

It’s a good idea to carefully evaluate the prevailing market trends in the car wash industry. For instance, knowing what car wash equipment customers seek can help determine how much money you need to buy a car wash equipped to meet the latest customer demands.

Another thing to do before buying a car wash business is to make profit projections for the type of car wash you plan to buy. The best way to do this is by creating a comprehensive business plan that includes an in-depth overview of your expected operating expenses versus potential revenue.

Putting all the relevant data, research, and statistics on paper will make it much easier to forecast how your car wash will likely perform. Meanwhile, lenders will be far more likely to provide business loans for startup capital if you already have a concrete roadmap for success.

Scalability and Growth Opportunities

You may want to consider whether or not your business model will be scalable and capable of sustained expansion in the future before jumping into car wash ownership.

For instance, taking over a self-service car wash in a small town may not bring the high rate of return needed to invest in new locations right away. Meanwhile, opening the only luxury car wash near a high-income suburb will likely have much more promising growth potential, quickly generating the profits needed to build new wash bays or open additional locations sooner.

Management Capabilities

Double-check the management capabilities of the car wash you intend to buy. Ideally, car wash owners should find an investment opportunity capable of sustaining itself with little or no direct supervision. Without a competent management team, you may have to spend more time than expected handling inventory management, maintenance routines, and ensuring operations run smoothly.

Location and Competition

One of the most important factors to consider when exploring owning a car wash is the potential business location and local competition. A prime car wash location is almost always in an area with high traffic, conveniently positioned between residential and commercial zones.

However, opening a car wash at a busy intersection downtown amid four or five other similar businesses could be just as unprofitable as buying the only wash station in a rural area. It’s critical to consider nearby competitors when choosing a car wash location so you can strategically position your business where it’s most likely to build a strong customer base.

Regulatory and Environmental Factors

There’s one final factor to consider before you start exploring how to buy a car wash. State and local governments have regulations that govern how car washes should handle wastewater treatment and runoff that can negatively impact the environment. If you’re considering car wash investing, you’ll want to take some time to educate yourself about the rules in the area you hope to open your business. 

The U.S. Environmental Protection Agency offers helpful tips and resources for ensuring car washes follow compliance standards.

The Right Support for a Profitable Business Venture

At National Carwash Solutions, we understand the challenges of starting a successful car wash business from scratch – or maintaining and expanding an existing one. That’s why we work hard to provide our clients with the top-tier solutions they need to succeed. 

From car wash equipment, service, parts and consulting – as well as cutting edge technology designed to maximize your success – we provide everything you need to keep operations running smoothly year-round. 

Contact us today for more information on how National Carwash Solutions can help your car wash grow and thrive.