Purchasing a car wash for sale offers many advantages over building one from scratch. This article outlines those advantages, some of the realities and the specific circumstances that make for an ideal purchase are related below.

There are several models of car washes proliferating throughout the country and the world today. However, they can be categorized into three general classes; self service, full service and express car washes. Understanding the differences between these models will be critical is defining your selection criteria as you evaluate car washes for sale.

Self service car washes are by far the easiest models to manage. Self service car washes are characterized by bays, wands and vacuum cleaners. Customer feed their coins, bills or credit cards into a variety of cleaning apparatus for the privilege of cleaning their own cars. Usually, customers will park their car in a bay and use a wand to spray and scrub their car. A timer controls the amount of water, soap and wax that the consumer can use. Once clean, the consumer exits the bay to dry and vacuum the car. Many self service models will have one or two bays converted to house “in-bay automatics.” In-bay automatics are automated car wash arches that pass back and forth over the vehicle dispensing water, soap, wax and hot air. The average wash times with the in-bay automatic ranges between 8 and 13 minutes depending on the options selected by the consumer. For projection purposes, that means that the likelihood of processing more than 4 cars per hour per bay is low.

Self service car washes are popular investments for many professionals. The general conception is that they run themselves and one can simply stop by and collect the cash on a regular basis. This model of car wash definitely lends itself to minimal labor costs. Compared to the express and full service models, service car washes can be manned by a single employee during busy times and not all during slow times. In reality, many are not staffed at all. However, most successful operators have someone at the site on the weekends to ensure that the bays are clean, the equipment is operational and customers can properly change their money for services.

Self service car washes for sale have the simplest configuration of the three types of car washes with respect to equipment and maintenance. Most operators have a relationship with a local service firm in case significant issues arise, although most learn quickly to handle their own problems and avoid the monthly maintenance costs.

Customer complaints are the lowest in the self service model, because the customer cleans their own car. As long as the operator keeps the equipment in good condition and the customers can exchange their money for service and understand how to use the equipment there are few problems. Some customers use the car wash for unconventional tasks, such as flushing air conditioning units, cleaning animals, etc. A good security monitoring system, well advertised, can reduce problems relating to improper usage of the bays.

The key to success for finding the right self service car wash for sale is location. There must be 2,000 households per bay within one mile to support the self service car wash. In addition, the wash must be on the “go home” side of the road and have easy ingress and egress from both sides of the road. Good signage is a must and traffic speeds should be below 30 mph. If these basic criteria are absent, then the prospective buyer should pass on the deal.

More so than the other models, the self service car wash is plagued with the “cash” problem for the buyers. Most operators disable or reset the equipment counters and collect the cash from the money changers and vending operations personally. What they report and what is actually collected will vary. It is nearly impossible for the potential buyer of this business for sale to obtain accurate historical records. However, you can sit and watch the activity at various times on different days and factor that into your traffic counts, households, etc. to project volume. Regardless of your approach, buyers can expect to struggle with sellers about the pricing because of this cash income verification issue.

With the self service, keep an eye on the existing competition. Industry insiders will say that the express model will bring an end to the self service car wash. They reason that customers will pay nearly $6 or more during their visit to a self serve car wash. Express models deliver a decent wash for the same price in only a few minutes, with no effort required from the customer. It does seem compelling.

Full Service Car Washes For Sale

Full service car washes for sale are on the opposite end of the spectrum from the self service car wash. In the traditional full service model, the consumer leaves their car with a car wash employee and waits for its return in 20 or 30 minutes. Typically, the car will be vacuumed first and then sent through a conveyor driven tunnel full of equipment that cleans and drys the car. Additional detailing services are encouraged and the price point is usually well over $30.

Full service models are a handful to manage. They are not absentee owner opportunities. The owner must be on site and is usually supported by one or more full time managers. Full service car washes have boatloads of labor. There are people to sell services, maintain the counter, pre-treat for bugs, maintain the equipment, vacuum the car, dry the car, manage the register, perform various detailing tasks, etc. Staff count at a busy location can easily exceed 50 people on a Saturday.

Full service car washes have plenty of equipment that is complicated and in constant need of maintenance and repair. Operators spend plenty of time trying to find the right configuration to produce a clean dry car. However, the conveyor line of equipment is there to do the majority of the basic cleaning and drying work, while the employees handle most of the details that consumer really notice. Full service car washes tend to worry less about how well their equipment cleans and drys because they have employees touching the car before and after the vehicles enters the tunnel to ensure a better quality wash.

For potential buyers of full service car washes for sale, get someone in the business to evaluate the equipment. The worse the equipment performs, the more labor is required. Evaluate how the wash is configured. Can it handle large volumes of traffic all at once? How long does a car sit at the exit of the tunnel before it is dried? What percentage of the traffic is being detailed?

Customers expect the most from full service car washes and have plenty of time to think about all the things they expect from the wash while waiting for their cars. People who use full service car washes pay more than they would in any other model and want their money’s worth. The car wash operator also absorbs a lot of liability since his employees are fully responsible for the car at the moment the owner leaves the vehicles in their care.

The key to a full service car wash is maximizing your employees and efficiency. For example, two people can detail an interior faster than one, because neither has to walk to the other side of the car. You have to balance conveyor line speed with the number of people pre-treating the cars for bugs and you have to balance the number and type of fans with the number of people drying cars. Little services are the key to profitability. Most of the money is made in the up-sell services like shining the tires. These services take 30 seconds to perform and a couple of pennies in chemicals. The customer may pay and extra $5 for the service. This margin adds up over volume.

Unlike the self service model, the full service car wash is very expensive to maintain and these costs can destroy any profitability if the weather turns sour, even at the best location. Due to these undesirable characteristics of the full service car wash, many operators are looking to move to the express car wash model. For that reason, I don’t recommend purchasing a full service car wash, except under the very best conditions. Most full services car washes cannot be converted to an express model because the tunnels are too short. Unless the wash is located in a high traffic, very affluent area it is terribly difficult to make money in the full service car wash business.

Express Car Washes

Express car washes of different types are all the rage right now in the car wash space. While popular for years in the Northeast and Midwest US, they are now gaining popularity in the South and West. There was a perception that customers would not be interested in the express model in the Southern and Western United States, but recent success has proven that assumption incorrect.

An express car wash is most closely related to the full service car wash with two important distinctions. The first important difference is that customer stays with the car throughout the process. The second difference is that the order of the cleaning is reversed. In the express wash, the exterior is cleaned first and the interior cleaning is an optional second.

Consumers will appreciate many of the features of the express wash. The price points usually start in the $6 range, making the wash very affordable for every budget, although extra features can increase the price to the $10-$12 range. In any case, it is priced similar to a self service wash and it much less expensive than a full service wash. Consumers used to full service washes will also notice the speed of the wash. Even on busy days, the entire process won’t take more than 5 or 6 minutes, and the actual tunnel wash portion won’t take more than a few minutes. Finally, the customer stays in control of the car and can leave immediately following the tunnel portion of the wash. Alternatively, the customer can opt to drive over to a separate area for interior cleaning and/or detailing.

The one thing the customer will also notice is that while cheaper and faster, the wash is not of better quality or even the same quality as a full service wash. The wide range of vehicle configurations, dirt, bugs, etc. makes it impossible for a single configuration of equipment to produce the same result as a full service wash. Thus, many consumers will use a full service wash to really deep clean their vehicles and use express washes to maintain cleanliness between full service car washes.

Express car washes were designed to increase automation while reducing labor costs and liability. Express car washes center on the same type of tunnel found in the full service car wash, except that the tunnel is typically longer. A longer tunnel affords several advantages. A longer tunnel, perhaps 170 feet, can hold more cleaning and drying equipment as well as leave ample dwell space for gravity drying. Longer tunnels are designed to accommodate as many as 8 cars at once, going at faster conveyor speeds, and exiting clean and dry (mostly). This is a difficult task to achieve, due to differences in temperature, humidity, types of bugs, types of dirt, etc.

The express model operates in this way. Someone greets the customer, sells them a package and collects the money. Some companies are relying on automated attendants to handle the selling, up-selling and money collection process. Once a wash package is selected, the consumer follows prompts given by signs or people to position their vehicle on the conveyor. The conveyor is computer controlled and activates the right equipment to produce the wash package the customer selected. A few minutes later the car emerges, both clean and dry (mostly).

Most operators will re-arrange and/or change their equipment in their tunnel several times before finding a solution that works pretty well. Unless of course, the operator cannot afford to change the equipment or configuration, then they will need to backfill the quality of the wash with labor.

To build an express car wash is a fairly expensive task. The owner must purchase very expensive land in the busiest traffic area and create an attractive and functional design. Average land cost in high traffic areas will easily exceed $10/foot and he will need a lot with a minimum of 100 feet of frontage and 300 foot of depth, assuming there are no significant mandatory setbacks. Tunnel equipment can cost more than $400,000, while the actual construction costs, including drainage, paving, electrical, plumbing, sewer, building, etc. can run more than $1 million these days. I priced a express car wash project in a small, well developed town. The tunnel was 190 feet, sitting on 1.65 acres of land. The total projected cost - $3.5 million.

Given the investment necessary, the owner looks to maximize throughput of this wash model. The express wash is designed to handle as many as 150 cars per hour, but new car washes can take up to three years to reach their maximum traffic flow. The owners quickly recognize three things:

1. They quality does not please most customers. They try changing configurations, but are more or less stuck with what they have. Instead they hire a few people to pre-treat the car before entering the tunnel and a few people to dry the car when it exits. Now they have some labor to manage.

2. The owner needs every bit of traffic possible to maximize revenues and cover his costs, including that big loan he undertook for the project. Many consumers still feel that the full service model represents a more complete offering. The owner, with some labor onsite, will introduce a comprehensive suite of detailing services to keep his labor busy. In this way, they hope to capture those customers that want the simple express service as well as those that want a full service wash.

3. Lube centers keep the bills paid on rainy days. In the end, most express washes turn into full service washes, offering a complete set of services and featuring slightly less labor cost as a full service car wash. The term used for these is usually “flex service.” The advantages, however, remain. There is less labor since the customer handles the movement of their own vehicle. This also reduced liability. More of the basic work is done by the equipment tunnel, leaving the labor to provide more profitable services. Finally, the model appeals to customers wanting a quick, cheap wash and those wanting a full service wash.

In my opinion, express washes with 150+ feet of tunnel length are the best purchase for those wanting to be heavily invested in the car wash game. High traffic count, lots of roof tops, easy ingress and egress, high visibility and proximity to a traffic light are critical factors to success in every car wash model. If you are evaluating an express car wash for sale, be sure to evaluate these factors.

The Good (about car washes for sale)

Car washes are big business. 90 percent of car owners get their cars washed a t least once each month. The are several advantages to buying an existing car wash business for sale, including:

1. Most towns hate car washes and can be very stingy with permitting them. However, once a town had allowed a car wash in, two paths will develop. In some cases, the town will not allow any more car washes into the town, which is a huge bonus for the operator. In other cases, the town begins to let all kinds of car washes in, which creates a very competitive market. The best thing about buying an existing car wash is that the seller or a previous owner fought and won the battle with the town. As a buyer of an existing wash, you don’t need to spend any time or money on this approval process.

2. To build a car wash in most towns today is very expensive. The difference between what is a necessity and what looks attractive to the town’s Planning and Zoning Board can mean millions of dollars for the developer. Since you are buying an already established car wash, these costs are not your problem. In many cases, car washes for sale are much older and are “grandfathered” in many ways and have avoided the costs of developing architecturally expensive layouts. If you are considering the purchase of a wash that was built recently, you can be sure that the owner’s price will reflect his building costs. Either way, you have saved yourself the development time. You should look carefully at the deed restrictions associated with the property or the conditions on the lease. In the event that your car wash doesn’t work out, you would like to have fee simple title, so you can sell the property for any other use the land is zoned for.

3. This industry is well developed and there are a lot of vendors competing for your car wash business. This usually means that there is someone who can help you with your configuration in the event that you get stuck after purchasing the car wash.

4. Digital security cameras and related recording equipment drastically lower consumer complaints, theft and other destructive behaviors that used to plague this industry.

5. Most car washes take 3 years to really mature. In other words, if everything is done properly, a car wash will reach its peak volumes in 3 to 5 years. Between 3 and 5 years, the traffic levels will level off and you should be able to get a real feel for the volumes throughout the year. This really helps with due diligence.

6. This is one business where you can validate customer traffic by parking across the street and watching.

7. The car wash is a well understood business for many banks. There is actually an inordinate number of car wash financing sources for folks entering established or new car wash businesses. There are actually brokers that can help put the prospective buyer in tough with the appropriate financier. Talk to Alan Bussey at www.carwashloan.com or check with you friendly banker.

8. There is a lot of expertise in the car wash industry. You can spend a few thousand dollars to hire one to come out and evaluate your potential acquisition. If you select an independent consultant, they will be paid to give their opinion and are not motivated to be positive or negative. Once again, the buyer must beware. Many of these consultants want you to jump into something you can’t make work, so they can continue to provide expensive guidance. Robert Roman at www.carwashplan.com is an example of an industry consultant that can help you.

The Bad (about car washes for sale)

The key to the car wash business is location. Of course, you have always heard that the three most important factors in the success of a business are location, location and location. This is terribly important with car washes. There are several factors that affect the success of a car wash, including:

1. On what side of the road is the car wash that is for sale? There is the “go home” side and the “go to work” side of most thoroughfares. If the car wash is not on the “go home” side it will perform poorly and you should think carefully before investing. Most people do not wash their cars on the way to work.

2. Can you see the car wash clearly? A good location will be visible from 300 feet traveling at 30 mph in every direction. If the car wash is located behind another building, positioned too far back on the lot or the municipality restricts signage you should pass on that car wash for sale. Car washes are a matter of convenience and visibility. There is nothing you can do to make up for the lack of either.

3. What is the traffic count for that road? There are many ways to get traffic count, although the easiest is probably www.demographicsnow.com. You will have to pay extra to get access to traffic count data, but if you are evaluating several car washes for sale, the $50 per month is likely worth it. You can usually validate this information by contacting the town or state, depending on the type of road the car wash sits on. Sometimes the police department will have this information. If you want to be certain, the best choice is to hire a traffic count service to do the exact location. The cost is less than $1,000 and it is well worth the piece of mind. With the exception of small towns, most consumers will not drive out of their way to get their car washed. Either the traffic flow in front of your location is enough to sustain the business or it is not. A general rule of thumb is that your car wash, if properly situated and clearly visible, will capture .4% of the traffic count on any given sunny day.

4. Take a look at the speed of the traffic. Ideal traffic flow would be less than 30 mph. This usually means that the ideal spot for a car wash is 1 or 2 lots from a busy intersection and a traffic light. If the wash is on the corner, the gridlock at the light will make it impossible for consumers to enter or exit, while a wash too far from a traffic light will allow traffic to reach speeds well beyond 30 mph, which is too fast to stop and get a wash.

5. How many other car washes are within a mile of your potential location? No matter what type of car wash it is, other competitors will take market share from you. I have always found this to be a deal killer on washes. Equally as important, don’t look at the competition today, look at what it will be 3 years from now. Take an accounting of the number of vacant lots near your closest intersection. If there are not any available, you may be in good shape. If there are other lots nearby that would make for good car wash locations, you should think twice. Someone with more money than sense will gladly create an over competitive market that neither of you can prosper in.

6. Car washes tend to be cash businesses and sellers are not likely to claim much of it to the government or record it anywhere. Most owners figure out how to manage the counters on their equipment and “rob” the cash regularly. It is considered to be one of the bonuses of the business. The issue for you, the buyer, is how to quantify this unrecorded, unreported bounty.

7. The car wash is completely dependent on weather. On warm sunny days, washes will be very active. On cloudy days, the wash will likely be close unless it has a lube facility. This means that your income is dependent on Mother Nature. Also remember that week day lunch time and weekends are the busiest times for the car wash. If you have a cloudy or rainy weekend, ninety percent of your revenue for that week is most likely lost.

8. The car wash business is either feast or famine. The car wash is either busier than it can manage on a sunny Saturday or the wash is completely empty. Equipment failure during the busiest times can have devastating effects on volume and income. More difficult, however, is managing your employees. You low skilled, unreliable employees are also dependent on the weather for their pay check. If it rains, the owner usually sends the team home, because there is no reason to pay them to stand around. If it is busy, then the employees are forced to hustle. Managing this roller coaster of activity and balancing your unreliable labor pool can be challenging.

9. Unless the car wash is a self service model you will need to be on site regularly or hire someone to manage it for you. The latter task is very challenging. Nobody likes to work for car washes. The pay is usually poor and it is hard work. Labor in full service car washes and any other type of express wash is a nightmare for most owners and finding someone that you can compensate to manage it, while staying profitable, is quite a trick.

10. Every single type of car wash model requires labor. The self service requires the least, but even there you really do need someone to be there at busy times. You need someone onsite the keep the bays clean, ensure that the equipment is functional, help consumers struggling with the change and vending machines and ensure that your in-bay automatics are not causing unnecessary delays. Other models, including full service and any type of automated tunnel wash require plenty of labor. Many sellers will tell you that tunnel based models, where the customer stays with their vehicle throughout the wash, requires only “one or two” staff. That is nonsense. As soon as the customer realizes that the bugs are still on the hood or that the back of the car is not dry, he will be demanding service. You can choose to ignore him and lose him as a customer or you can address his issues. Addressing the issues means hiring people to remove the bugs at the pre-wash and towel dryers to catch the last bit of water coming off the car. There are no tunnel systems in existence today that completely clean and dry the car, regardless of what anyone tells you. Operators and vendors alike will expound on dwell times, variable fans, automatic tire cleaners, etc. In the end, you will need labor to produce a clean, dry car. Once you have labor, you will want to make more money to cover their costs and you will introduce some type of detailing services. Once those services become busy, you will need more labor. In my opinion, most express or flex serve washes have almost as many people as a full serve car wash.

11. The car wash business is a fairly open book. In other words, it is terribly difficult to hide your competitive strategy. Competitors just have to come in and get their car washed to evaluate your operation, pricing, sales efforts, quality, etc. Most seasoned operators can evaluate your entire equipment configuration in one ride through the tunnel.

12. How many rooftops are nearby? “People wash where they live” is a popular motto in the space. One rule of thumb for the self service car wash is to ensure that you have 2000 households per bay within a one mile radius.

The Ugly (about car washes for sale)

If an existing operator has fouled up any one of the critical location factors, including side of the road, traffic count, proximity to a traffic light, feasibility of ingress and egress, traffic speed, visibility, etc., the car wash is done. Put a fork in it. There is nothing that can be done to overcome a bad location. I think most washes fall into this category and buyers should stay clear of these businesses for sale.

Most operators simply do not record most of their cash. As a result you will have to go on faith or work your way back from the equipment counters (if they are not reset) or simply sit and watch the wash for several months. None of these are very good options. In most cases, the buyer will need to develop an entirely new business plan from the data available and pretend it is a startup opportunity. In most cases, the seller will use this nebulous cash figure to prop up an unsupported blue sky price.

Take some time to understand what the traffic patterns are and what types of road construction that is planned by any government entity. Road construction can destroy a car wash. No one wants to transverse a filthy road to get their car cleaned. Road construction can also change the traffic patterns. A highway overpass, for example, can reroute traffic away from your location.

The last important thing to remember about the car wash business is the artificially low barriers to entry. While it is expensive to enter the car wash business, it is well understood and has lots of bankable assets. As a result, may new operators will gladly enter the business with the full backing of bank. They may believe that they can outperform any existing operators and happily build directly down the street from your location. You may recognize that it doesn’t make sense to split the market and that neither of you can succeed well under those conditions, but your new competitor may be clueless and choose to see it differently.

The Opportunity

In general, it is far easier to acquire an existing car wash than to build a new one from scratch.

The only car wash I would consider buying is one that has its location and visibility factors right. Most washes with these factors will be producing for their owners and won’t be for sale. However, occasionally you might see a wash that has all the attributes of success, but performs poorly. This is usually the case with an absentee owner who bought the business as an investment but cannot or will not run the business himself. Without proper attention, the business withers and the investor tires of the business. As a cautious buyer, you need to be certain that all of the location criteria are in good order and seek out those opportunities where the car wash suffers from poor management. Be careful because it can be very difficult to determine which came first. Did the wash suffer because it did not make enough money to support its own maintenance or did the operator let maintenance lapse and the wash now performs poorly?