The auto repair industry in the United States is a massive sector, encompassing approximately 290,000 auto repair shops and boasting a staggering market size of $188.1 billion as of 2024. For those considering entering this market or simply curious about its financial health, key questions arise: How profitable are these businesses? What’s the initial investment required? And what kind of turnover can one realistically expect?
To provide concrete answers, we’ve delved into the financial data of over 3,300 auto repair businesses across the United States. Our analysis is based on publicly available 2023 data, examining revenue, expenses, and profit figures from a wide range of businesses, including some of the largest franchises in the industry such as Carstar, Fix Auto USA, and Car-X.
Whether you are an aspiring auto repair shop owner or an industry observer, this article offers a detailed, data-backed exploration of the financial landscape of auto repair, focusing on the critical factors that determine profitability and return on investment.
We will address the most pressing questions:
- What is the average revenue for an auto repair shop?
- What are the typical startup costs for opening an auto repair shop?
- How profitable is an auto repair business in today’s market?
Decoding the Revenue of an Auto Repair Shop
Our analysis of nearly 2,800 auto repair businesses reveals an average annual revenue of $1,226,000.
It’s important to note that revenue figures can fluctuate significantly based on factors like geographic location, the range of services offered, and the scale of operations. Below is a breakdown of median revenue across various franchises, offering a more granular view:
| 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 |
* non available: some franchisors do not disclose publicly that information
Startup Costs: Investing in Your Auto Repair Venture
The initial investment to start an auto repair shop typically ranges from $235,000 to $1,348,000. This wide range reflects the numerous variables influencing startup expenses.
Let’s examine the investment ranges reported by the franchises in our dataset, providing a clearer picture of potential upfront costs:
| 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 |
Detailed Startup Costs for a Medium-Sized Auto Repair Shop ($200,000 – $500,000)
For a medium-sized auto repair business, anticipate startup costs in the $200,000 to $500,000 range. Here’s a more detailed breakdown of typical expenses:
- Equipment and Fixtures: Essential tools and equipment for repair services. Range: $131,000 – $193,000
- Inventory: Initial stock of auto parts and supplies. Range: $5,000 – $24,000
- Leasehold Improvements: Modifications to the leased space to meet operational needs. Range: $8,000 – $64,000
- Training Expenses: Costs for training staff prior to opening. Range: $3,000 – $5,000
- Pre-Opening Expenses: Utility deposits, setup fees, and other initial costs. Range: $10,000 – $20,000
- Grand Opening Advertising: Marketing and promotional activities for the launch. Range: $7,500
- Signage: Business signs for visibility. Range: $20,000 – $100,000
- Business Licenses and Permits: Legal and regulatory compliance fees. Range: $500
- Real Estate Costs: Initial lease payments for the shop location. Range: $0 – $30,000
- Additional Funds (3 months working capital): Funds to cover operating expenses during the initial months. Range: $10,000 – $50,000
- Insurance (3 months): Initial insurance premiums for business coverage. Range: $4,000 – $5,000
Profitability: Gauging the Financial Returns of Auto Repair
Auto repair shops generally achieve an average operating profit margin of 26%. Operating profit is a key indicator of financial health, representing earnings after covering operating expenses, but before accounting for taxes and interest.
The following table provides a closer look at the profitability metrics across different 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% |
Understanding Operational Costs in Auto Repair
Running an auto repair business involves various ongoing expenses. These primarily include the Cost of Goods Sold (COGS), labor costs (both direct and indirect), and general operating expenses. Here’s a detailed overview:
- Cost of Goods Sold (COGS): Direct costs linked to repair services, such as parts and materials. Example: 25-35% of revenue.
- Labor Costs: Wages, benefits, and compensation for technicians and support staff. Example: 16-30% of revenue.
- Rent and Utilities: Lease or rental costs for the premises and utility bills. Typically 5-10% of revenue.
- Marketing and Advertising: Expenses for business promotion, online ads, and marketing campaigns. Approximately 1-5% of revenue.
- Insurance: Premiums for liability, property, workers’ compensation, and other essential insurance. Approximately 2-4% of revenue.
- Supplies and Equipment Maintenance: Maintenance and replacement of tools and equipment, plus consumable supplies. Approximately 2-5% of revenue.
- Administrative Expenses: General overhead, office supplies, accounting, and administrative tasks. Approximately 5-10% of revenue.
- Training and Development: Ongoing staff training to stay updated with industry advancements. Approximately 1-3% of revenue.
- Miscellaneous Expenses: Other operational costs like travel, uniforms, and software subscriptions. Approximately 1-3% of revenue.
Real-World Example: Maaco Auto Repair Profit & Loss
To illustrate, consider the Profit & Loss statement of Maaco auto repairs. With 398 locations in 2024 and an average yearly revenue of $1,340,000, Maaco demonstrates a solid operating profit margin of 16.8% per month.
Maaco Profit and Loss Example
Auto Repair Financial Model Template: Plan for Success
For a deeper dive into financial planning for your auto repair business, consider utilizing a specialized financial model template.
See the template
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