Are you looking to start your own car wash business? As part of your business plan, make sure to consider the total cost and all the relevant expenses to start and run a car wash, from rental costs to equipment and salary expenses.
In this article we’ll go through all the different costs you will need to incur to start your own car wash business. Finally we’ll also look at the break-even point for a typical car wash.
Let’s dive in!
Car Wash Startup Costs
The costs involved in starting a car wash business depend on the level you plan to operate. Assuming you do not buy the land and the building but decide to rent instead, typically startup costs will represent anywhere from $50,000 to $150,000 depending on the type of car wash you operate.
For example, the equipment of the most advanced car wash type (touchless washing) will typically cost anywhere from $20,000 to $100,000. A car wash startup will require a considerable upfront investment. The upfront costs shall be:
|Car wash bay||$42,000|
|Car wash equipment||$8,000 – 100,000|
|Total||$50,000 – $150,000|
Car wash bay costs
Once you have rented or bought, the following item is building the carwash bay. Typically, you will need to take care of landscaping, lay a stable foundation and construct the carwash bay.
Expect to invest approximately $42,000 to construct a decent carwash bay.
Car wash licenses and permits
You must have a carwash license to offer vehicle cleaning services such as washing, detailing, drying, polishing, vacuuming, and other cosmetic care of vehicles. You can apply for carwash permits and licenses online. The average cost of a carwash license in New York City is $550.
Car wash equipment costs
In addition to building the carwash bay, you will need to pay for the equipment as well. The average cost of carwash equipment depends on the carwash services you intend to offer. Typically, the cost for a self-service carwash bay is between $8,000 and $10,000. For an automatic carwash bay, equipment costs range between $31,000 and $100,000.
All in all, see below an example of the total startup cost to start a car wash business:
Car Wash Operating Costs
In addition to the one-off startup costs, you must also consider the total recurring cost of running a car wash business. The expenses vary depending on the number of cars you wash per month and your services. Here is a brief overview of the carwash running costs to expect:
|Startup Operating Costs||Amount (per month)|
Salaries & commissions
You can offer carwash attendants a monthly salary or a commission depending on the number of vehicles they clean. As per Indeed.com the average salary for a car wash attendant in the United States was $15.38 per hour.
Assuming you hire 2 car wash attendants to run your car wash with you the first few months, this will cost you approximately $5,000 per month for the 2 attendants. Adding up your own salary (assuming $40,000), the total cost is $8,000 per month.
Water and electricity account for one of the most important expense for car wash businesses. Water especially, which depends on the type of car wash you are operating. For example:
- A high-volume car wash with 100 cars a day would consume approximately 105,000 gallons a month which would cost approximately $1,000 a month (assuming $10 per 1,000 gallons)
- An automatic touchless car wash with 100 cars a day would use in comparison 210,000 gallons a month, costing approximately $2,000 a month in water expenses
As you can see, the monthly expenses on water can vary significantly depending on the volume, the type of car wash and the price per gallon you are paying.
Make sure to budget accordingly when you set up the prices customers will pay.
Assuming you are just starting your business and service only 40 cars a day with a high-volume car wash, this will cost you anywhere from $500 to $1,000 a month (electricity & water included).
The typical car wash lots are at least 5,000 to 10,000 square feet. Depending on the location and size, renting the carwash lot ranges between $5,000 to $25,000 per month.
Assuming you are renting a 5,000 SF lot in a tier 2 location next to Portland at $15 per year per SF, you will pay $6,250 in rent each month.
You will need to spend some money in marketing and advertising. Car wash are local businesses, so it will mostly be offline marketing expenses (vs. online marketing) which can include billboards, posters, partnerships with companies, radio ads, etc.
Let’s assume here you are investing in billboards and posters in the vicinity for which you must pay $2,500 per month.
Finally, you will need a monthly budget to finance soaps, sponges, dryers, brushes and other car wash supplies. The typical expense on the car wash supplies ranges between $1,000 to $5,000 per month, depending on the number of vehicles you will be cleaning.
In addition to the expenses presented above, you will need to set aside more money for expenses like: phone subscriptions, HR and finance software, bookkeeping, etc.
Let’s assume here you are spending another $2,000 per month in other expenses.
Finally, see below an example of the total operating cost to start a car wash business (per month). In other words, you will need to spend $20,000 per month to run your car wash the first few months.