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Auto Repair Shop Monthly Expenses To Help You Create A Budget

Creating a strict budget for your auto repair shop is crucial for long-term success. Learn about common monthly expenses, including rent, utilities, insurance, marketing, employee wages, maintenance, taxes, and automation software costs. Stay financially sound and profitable with proper budget management. #AutoRepairShop #Budgeting #BusinessExpenses
January 14, 2022

Before you open your automotive repair shop, one of the most significant aspects of a day-to-day business plan is the budget. That’s where you need to be extremely careful and calculated. Unfortunately, more than 60% of the new auto repair shops fail due to not having a strict business plan and budget or not adhering to it. So you’ll have to create a fixed budget and adhere to it if you want to make a profit every month and stay afloat. In addition, you’ll have to calculate any overhead expenses that may come in the future. So you should know what the regular auto repair shop expenses are:

Rent & Utilities:

First and foremost, you’ll have to pay your rent (if the shop space is rented), which may differ according to area and size. On average, the rent goes for roughly around 8000$. But it will depend a lot on what kind of services you are availing, and how much space they are going to take. The same goes for utilities like water, gas, and electricity. These utilities have to be paid regularly. Otherwise, the simplest jobs like car-washing and tire changing may suffer. Rent may take around 6 to 7% of your auto repair shop monthly expenses.


Insurance is one of the most significant auto repair shop expenses. You’ll need to have insurance for your shop space as well as for individual instruments and equipment, which is quite necessary, in case you, unfortunately, have an accident. The insurance amount may increase or decrease depending on what kind of deductible and coverage your insurance provider is offering. You may also go for a policy tailored for small to medium-sized businesses, known as business owners policy or BOP. There are four primary types of insurance:

Commercial property:

This insurance usually takes care of your assets, including your equipment, insurance, etc.

General liability:

this type of insurance coverage can help you safeguard against any injuries, accidents, property damage, and cases for misleading adverts.

Garage keepers liability:

This type of insurance covers any expenses towards damage caused to any customer car in your shop for repairs.

Workers compensation:

It covers any expenses towards an illness or injury caused to an employee working in your repair shop.


If you have just started your repair shop or looking to start one, you’ll require extensive marketing to reach as many people around the city. You’ll make your potential customers aware of your services so as to get your business going. Around 7% to 8% of your auto repair shop monthly expenses should be reserved for marketing strategies:

Website development:

Almost everyone looking for anything new initially visits the internet and looks for different websites related to that topic, which in this case, is an auto repair shop.


There are modes of advertisements like magazines, flyers, newspapers, billboards, television, etc.


Employees are what makes your company successful, and you need to keep that in mind at all times. And the best way to respect your employees is to pay them in full on time. One of the most common mistakes employers commit is accounting only the wages in an employee’s compensation, but in reality, it makes up for only about half of the total compensation. The salary of an employee on average is around 20$ per hour.


With any business, you require regular maintenance for upkeep, like paint jobs, waterproofing, mending leaks, maintaining the equipment and instruments, which may take around 1% of your total auto repair shop expenses.


If you are running a business, paying your taxes on time should be a priority. You must be prepared to reserve around 30% of your auto repair shop monthly expenses for the taxes. Here are a few ways you can ensure regular payments:

Keep regular records:

Maintain your records regularly with the help of accounting software. You must have a book-keeping system to keep a record of your income and expenses.

Pay your taxes quarterly:

Taxes are supposed to be paid every quarter. So schedule it on a fixed date to ensure you don’t miss the payment.

Invest in an accountant:

You may be able to run your daily operations with the help of regular bookkeeping. But an accountant can help you file your taxes on time and make a budget more effectively to keep a track of your auto repair shop expenses.


There are many softwares that can help make the day-to-day operations of your automotive repair shop more manageable. This software can help you in every aspect of your repair shop, be it CRM, digital vehicle inspection, repair shop management software, etc. These softwares can help you offer your customers loyalty programs with rewards, better marketing techniques, maintenance and track records, etc. So you may want to allow a sizable amount from your auto repair shop monthly expenses towards automation software.  

You may consider consulting with our experts at Garage Plug via GaragePlug is one of the most advanced workshop management platforms that primarily adhere to giving a premium & digital experience to your customers.

GaragePlug will be that one software that you’ll ever need for your entire business.

Talk to us! Find out what we can do for you.

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