Auto Body Shop Business Overview
Auto body shops repair and customize vehicles after collisions, accidents or when modifications are needed. These businesses fix damaged vehicle bodies, restore their original appearance, and perform various automotive services.
Related: Checklist to Start a Business
How Do Auto Body Shops Make Money?
Auto body shops generate income through various repair and customization services provided to vehicle owners. These businesses serve both individual customers paying out-of-pocket and those filing insurance claims for covered repairs.
The revenue streams for auto body shops can include:
- Body Repair Services: Fixing damaged vehicle bodies, removing dents, and replacing damaged parts represents the largest source of income.
- Painting Services: Applying new paint, fixing paint damage, and providing custom vehicle paint jobs.
- Glass Services: Installing new windshields, repairing chips and cracks, and window tinting.
- Upholstery Work: Repairing or replacing vehicle interiors, including seats, headliners, and carpeting.
- Parts Sales: Selling replacement auto body parts and components needed for repairs.
- Detailing Services: Providing thorough cleaning, paint correction, and protective coating applications.
- Custom Modification: Installing aftermarket parts and creating unique vehicle modifications.
Industry Statistics
Auto body repair shops fall under NAICS code 811121: Automotive Body, Paint, and Interior Repair and Maintenance. These businesses handle collision repairs, painting, glass replacement, and customization services.
Here are some statistics about the industry:
Auto Body Shop Industry Size & Growth: The auto body industry generated $67.9 billion in revenue last year. The industry has grown at an annual rate of 2.3% over the past five years. Growth is expected to continue as more vehicles on the road lead to increased demand for repair services. Rising vehicle costs are also prompting owners to repair rather than replace damaged vehicles. (IBISWorld)
Number of Auto Body Shops: There are approximately 107,000 auto body shops operating across the country. The industry includes both independent shops and larger chains. Major companies like Boyd Group, Driven Brands, and Caliber Collision Center control small portions of the market, with Boyd Group holding the largest share. Despite having major players, the industry remains largely fragmented, with most shops being independently owned and operated. (IBISWorld)
Auto Body Shop Profit Margin: The average profit margin for auto body shops is 7.8%. Margins vary based on factors like labor costs, parts pricing, and relationships with insurance companies. (IBISWorld)
Startup Stories
Costs To Start an Auto Body Shop
Starting an auto body shop could range from $75,000 to $400,000, depending on the size and scope of services offered. The higher cost estimate represents a full-service collision repair center, while lower costs reflect smaller shops focusing on basic repairs and services.
Here are some of the main costs to consider when starting an auto body shop:
Building and Location: A shop location requires the first and last month’s rent plus a security deposit. Building modifications include ventilation systems, paint booth installation, and electrical upgrades. Initial costs for space and renovations could range from $30,000 to $150,000.
Equipment and Tools: Auto body shops need frame machines, welding equipment, air compressors, paint booths, and various hand tools. Basic equipment packages start at around $25,000, while comprehensive setups with new equipment can cost more than $150,000.
Insurance and Certifications: Business insurance, garage liability coverage, and industry certifications cost between $5,000 and $15,000 for initial coverage and training requirements.
Initial Parts Inventory: Maintaining a stock of commonly needed repair parts, paint supplies, and materials requires $10,000 to $50,000 in initial inventory.
Vehicle Management System: Software for estimating, parts ordering, and customer management systems range from $2,000 to $10,000, including installation and training.
These estimates serve as general guidelines, and actual startup costs will vary based on location, business size, and service offerings.