Average Cost to Open an Auto Repair Shop
Posted on Mar 6th 2020 in Best Practices
Interested in opening an auto repair shop? If so, there are many different things to think about as you plan out your new business venture. From writing a business plan, thinking through marketing tactics, and projecting your auto repair shop’s financial data, you’ll have many factors to think about in the early planning stages.
To help with planning out the financial cost of starting a new automotive repair shop, we’ve come up with the following guide of common shop equipment and their costs to help you think through your finances before taking the leap.
Estimates below are in US Dollars.
So how much does it cost to start an auto repair shop?
In total, the approximate cost to open an auto repair garage today is $37,500.
This budget includes a full equipment list, administrative fees like shop insurance and accounting fees, marketing and inventory. Below is a full breakdown of the projected costs.
Small Automotive Repair Tools - $1335
- Set of Screwdrivers ($50)
- Hammer ($20)
- Torque wrenches ($75)
- Ratchet wrenches ($75)
- Hex wrenches ($30)
- Impact wrench ($300)
- Oil filter wrench ($20)
- Oil drip pan ($20)
- Bolt extractors ($20)
- Pry bar ($20)
- Cordless drill ($100)
- Fuses ($20)
- Electrical tape ($5)
- Vice grips ($30)
- Pliers ($20)
- Small butane torch ($40)
- Allen and torx bits ($20)
- Funnel ($10)
- Bench Vise ($60)
- Jack stands ($100)
- Ramps ($100)
- Battery charger and jumper ($200)
Medium Automotive Repair Tools - $5200
- Jack ($200)
- Air compressor ($200)
- Workbench ($300)
- Tool chest ($500)
- Diagnostics and OBD machine ($4,000)
Large Automotive Repair Tools - $3500
- Hydraulic lift ($3,000)
- Engine crane ($500)
Garage Supplies - $240
- First Aid Kit ($30)
- Gloves ($30)
- Boots ($150)
- LED Headlamp ($30)
Business and Administrative expenses - $5700
- Business license, certifications, and permits ($200)
- Insurance ($5k / year)
- Accounting fees ($500 / year)
Garage Space - ($0 - $15,000)
Prices for garage space will vary greatly depending on your location. Additionally, cities and locations have different regulations when it comes to running a business from your home garage. If you’re looking to save money, double-check your city’s codes and regulations to see if it’s possible to open a home auto repair business. Otherwise, you’ll need to rent a commercial space for your garage.
Commercial garages can range in price in the United States from anywhere from $0.50 per square ft/month in smaller towns to $5.00 per square ft/month in large cities on the West Coast.
For a 3,000 square foot garage, for example, this translates to $1500 to $15,000 per month.
As an alternative, some websites like Garagetime now allow mechanics to rent temporary garage space and auto repair tools for less than a month.
Automotive Supplies and Spare Parts - ($0 - $5500)
Depending on your auto repair shop’s business model, you may find yourself needing to buy car parts and inventory. Does your garage plan on storing common repair parts or does it plan on ordering all parts on an as-needed basis? More than likely, it will be a combination of having some parts and supplies while needing to order others. If this is the case for your shop, you’ll want to set aside some budget for your initial inventory.
Additionally, here are ideas of a few common shop supplies that most repair shops have on hand:
- Oil for oil changes
- Washer Fluid
- Air Conditioning Coolant
- Radiator Fluid
- Transmission Fluid
- Power Steering Fluid
- Brake Fluid
- All Purpose Cleaner
- Brake Cleaner
Marketing costs - $1000
How do you plan on getting the word out about your new business? There are numerous free and low-cost options available, such as using social media, blogging, or building partnerships with other related automotive businesses like car dealerships or paint and body-only shops.
It’s also been said that the best marketing is simply ensuring your repair shop space is located in a visible, high-traffic location; be sure to take this into account when choosing where to locate your auto repair shop.
Alternatively, there are numerous paid options for marketing your garage. If you’re interested in increasing your automotive business’s online reach, you can look into paid marketing options such as pay-per-click advertising on search engines, as well as Facebook or Twitter advertisements. If you’re looking for physical advertising, consider sending out coupons and mailers, as well as investing in well-designed signage on your Garage building.