·  Legal News, Analysis, & Commentary


How to Start Your Own Car Repair Business

— May 29, 2020

Open a business bank account for your new car repair business because it is bad practice to mix personal assets with business. If your business ever gets sued, your personal assets will be protected if you have a separate business account.

A car repair business is one of the lucrative businesses in recent times. Most people have vehicles of their own and will inevitably require the services of a mechanic to do many things from minor service like filter change to major repairs. But, before you go into starting your own car repair business, there must be proper planning and you should know what it takes to start one. 

  1. Estimate the Cost 

The first thing to do when planning to start your own car repair business is to make a list of necessary things and find out how much it will cost to get these things. Doing this will help you know the financial implications and at the same time make important decisions about the business. These decisions include scaling the size of the business to available funds and deciding on specific repair services you can afford to offer. Some of the things to consider in the estimate for a car repair business include cost of: 

  • acquiring a license; this should cost about $50 – $500 
  • renting a workshop ($15000 per annum)
  • Purchasing diagnostic equipment ($5000) 
  • Purchasing Tools ($15000)
  • Insurance ($50000) (if required)
  1. Do a financial analysis

    Socket set; image by Vinayr16, via
    Socket set; image by Vinayr16, via

This is related to the first point but only comes after estimating the cost. Such financial analysis should put into consideration the available capital. If the capital is from a loan, the analysis should calculate how long it will take to repay the loan while modeling the services you intend to offer and expected patronage. This will help you to make decisions on the prices of your services after considering other workshop’s prices. Generally, mechanics have been known to charge between $25 to $100 per hour or charge a flat fee for specific services. You can research more on prices in the locations you have in mind so that you can create a good competition and make enough profits. 

  1. Decide the location

You probably have too many locations in mind, now is the time to streamline this list and some of the factors you should consider in choosing a location are discussed here. Convenience is an important factor in deciding the location of your car repair business. Your location should be easily accessible to the highway or main road so that your workshop easily becomes preferred by car owners. Workshops that are not easily accessible would mean more towing cost and car owners will try to avoid that. You can also consider other things like future expansion and including an administrative office when choosing your location. Urban areas are usually more expensive but have more customers. Visit to setup your workshop.

  1. Obtain a license 

We mentioned this briefly while discussing cost estimates. A license gives you the right to operate your business. Different states have different laws and some might require that you obtain a license before you can start your business. The process usually includes filling a form, meeting some requirements and making a one-time payment, which has been estimated above. 

  1. Open a business bank account, register for taxes and insurance 

Open a business bank account for your new car repair business because it is bad practice to mix personal assets with business. If your business ever gets sued, your personal assets will be protected if you have a separate business account. Complete your tax registrations as soon as possible, too. They are free and a lot of states have made the process a lot easier. Having a separate business account also helps make your tax filing easier. Insurance is highly recommended for all businesses and can be compulsory at some point. For instance, some states require you to have a certain level of insurance before you can be issued a license to start a business. So, you should consult the authorities in charge in your state to know if insurance is a requirement.

  1. Marketing strategy

Design a marketing strategy specifically for your new car repair business. For this, you can hire a branding professional and work together to make your business a success right from the start. Print flyers, business cards, and run targeted ads for your new business. With a lot of advertising medium available nowadays like TV, radio, and even the Internet, there is no limit to how much audience you can reach. You can also start reward programs to attract customers and keep them. All of these can be discussed with a branding professional before you execute them. Another thing you can do is to get into a business agreement with car dealerships that do not run a workshop and get them to direct their customers to your workshop for repairs. 

Good luck!!! 

Join the conversation!