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How Much Does It Cost To Build An Auto Repair Shop

Exploring the Costs and Considerations of Opening Your Own Auto Repair Shop: From initial setup to running and growing your business, this comprehensive guide breaks down the key expenses and phases involved in the journey of becoming a successful auto repair shop owner
August 5, 2021

Any idea takes time to get a proper shape and then consequently implemented. If you decide to open your own auto repair shop, then it surely is going to take some time to make plans and then execute them. Traditional construction is generally expensive and takes a lot of time. It is not merely about having an idea but also understanding the various areas and stakeholders that are required to be involved in order to efficiently give the dream of opening a successful auto repair shop some light.

Most people who graduate from automotive repair training schools prefer to join an auto garage and serve a year or two years there. Most hone their skills here and gain experience before opening their own auto repair mechanic shop. This starts the next great leap in their careers from being mechanics to becoming owners of their own businesses.

It is not easy to run a successful business and the auto repair shop building cost is also something that requires careful planning. There are major differences between being a technician at a garage shop and owning a shop of your own. The perspectives change and so does the way you deal with people. The responsibilities increase when you own your shop.

When you have started your business of auto repairs, the start-up cost for an auto repair shop is something you have keenly looked into. The costs have to be less or optimized initially and eventually if things are in place, there would be a steady flow of money.

The business has various stages and each of the stages requires different costs. If we come to calculations for the auto repair building cost then we have to keep in mind that not all mechanic shops perform all kinds of services. It is good to start an auto repair shop with basic services and then expand operations as per the demand.  The various costs can be divided into the following stages-

Phase 1- Workshop/ Garage set up costs:

The costs mentioned here are generally the ones that are incurred when a business first opens or when it is in the initial days of operation

Tools and equipment costs:

  • Using equipment that is readily available versus buying fresh new ones helps in optimizing costs. Some of the equipment that you would be needing are brake lathes, jacks, stands, tools and lifts. You can also opt for the option of buying some equipment in advance at large discounts which would help in saving costs. It is important to source good quality and reliable equipment but this however does not mean you have to spend a fortune over it. Doing a nice market survey to locate the reliable brands for such tools and equipment can actually help. Equipment like brake lathes and lifts are long lasting and would not require to be replaced very soon. If another shop is discarding some equipment which is in relatively good condition or is closing their business, it is the right opportunity to pick up some of these equipment at very affordable prices. It is not necessary to spend a lot of decorating the interiors and just the right kind of furnishings would be enough. People would judge you for services you would be rendering and not other things. The customer service should be the priority over anything else.
  • Essential tools would require approximately $ 15,000 which can be a one-time expense. Businesses can either purchase new tools or use the existing ones from other businesses. As stated above, businesses should procure basic tools in the beginning in order to save costs and then plan for purchasing better tools as the time progresses
  • Lifts would require around $ 4,000 each for purchase and installation. These are extremely essential however in order to contain auto repair building costs, businesses could start with one or two of them and then increase their numbers later.
  • Diagnostic machines or equipment was cost something within the range between $ 5,000 and $ 10,000

Also read:- Ways To Increase Auto Repair Shop Profit Margin

Land and property/building costs:

  • There would be costs of buying or leasing the piece of land where the factory would be built.
  • Rent for the shop is dependent on a number of factors ranging from size of the shop, area in which it is located and even the geographic area. All auto repair shops typically want to be located near the highways or roads which see a big volume of vehicles. Some prefer central locations within the cities where they can easily attract customers. The more central the location, the more expensive is the rent. Some auto repair shops start their shops in the outskirts and once business picks up they open their shops in the city eventually.
  • In case you want to build /construct on your own then better to use steel structure as there are no worries of damages by pests like termites or from dangers like fire. Steel is environmentally friendly compared to wood and other things. It is expected that costs on an average for steel auto repair buildings range between $15 to $20 per square foot and adding insulation to it adds more costs.

Other Infrastructure costs:

It is important to also research the building’s utilities and piping needs which may include water supplies and septic tanks. The power connections also need to be installed and would require prior approvals. A steel structure for the auto repair shop will be a durable option at a lower cost compared to traditional construction.

Costs for Business permits or licenses:

Some localities or areas require business permits for operations. These licenses or business permits have some fixed fees that need to be paid and then obtained. It depends on local government rules and regulations. Some of the costs are one-time whereas many have recurring costs towards renewal of licenses and permits periodically.

Phase 2- Workshop/ Garage running/maintenance costs:

The costs incurred in the second phase are generally towards maintaining operations and reaching out to a wider audience. They are as follows-

Insurance costs:

It is a good idea to take insurance for shops to mitigate the risks of any accidents, theft, or fire. The business may decide to increase insurance spends once the business generates more profits.

Maintenance costs:

There are many items that need to be considered while maintaining the auto repair shop, most of the costs are towards infrastructure and would be less in case of a steel structure due to no occurrences of rust or decay. Apart from regular maintenance towards wear and tear of the building, tools & equipment, furniture, we need to make provision for expenses like electricity, water, phone, broadband, stationery, etc for the proper running of the business.

Labour/manpower costs

You as a business owner cannot be in charge of all aspects of the business and therefore you may need the help of some people as your staff who would look after the front desk, accounts and various other departments. The right people with the right set of skill sets need to be hired. You may start with a lean team with a few people with relevant skill sets and gradually expand. These costs are salaries and other benefits you provide to your staff and vary based on their skills and experience.

Phase 3- Workshop/ Garage marketing and business growth costs:

Once the business achieves some stability it plans for expansions and adding more services to its kitty. Here are some of the costs that need to be accounted for while opening a mechanic shop in this phase-


Helping your mechanics gain certifications helps in uplifting the perceived image of the auto repair garage in front of the customers. Certified mechanics mean better customer service and can attract more customers. As an auto repair shop owner, one should take a keen interest in helping mechanics complete certifications and allocate small budgets for the same.

Advertising and promotions:

An auto repair garage may boast of the best services and tools available in the market with the best mechanics in place but if it does not have the right marketing and advertising plan in place, then it will fail to attract customers. In these competitive times, it is imperative for auto repair shops newly set up to advertise in newspapers, distribute coupons and offer discounts in order to attract more customers. A good referral system should be in place in order to make existing happy customers the channel for getting more new customers. Word of the mouth is the most valuable and inexpensive form of marketing even today and new businesses should use it to their advantage. This will help also in saving some of the advertising and marketing costs.

Addition of new services:

The business may decide to add new services which would entail extra costs related to purchasing new equipment and new rental spaces. Some auto repair shops may add niche services targeted to certain sections of the audience. It may also require the hiring of specialized professionals and workers for providing these services.

A new auto repair shop also needs to be prepared for all unexpected situations that may arise during daily operations when the business starts running. These may include dealing with customers who do not pay on time, managing leaves and time offs of workers, and preparing for the peak and slow times in a business. Some of the experience of dealing with these things may come from situations while running the operations.

Auto repair shop building cost is different for each business and it is up to the business owner to plan things in such a way which ensures maximum profits and minimum costs. Opening an auto repair shop of your own is not a simple task and various nuances to it which owners should quickly understand. It is important for them to figure out what kind of services and customer segments they want to target in advance before they start construction in a full swing. A business owner should be open to new ideas and should constantly adapt to the changing situations in order to become successful.

Also read:- Difference Between An Auto Body Shop And An Auto Repair Shop