9 Auto Repair Industry Financial Statistics: Sales, Expenses, Profit and More

March 8, 2023

Adam Hoeksema

The IRS publishes tax return data each year on the roughly 28,000,000 sole proprietorships in the U.S. We analyzed the 228,853 tax returns that were filed in the auto repair industry to pull out some key statistics and insights to help our customers ensure that they are creating realistic financial projections for their auto repair business.  

We hope that this data will be helpful for you as a “reality check” for your financial projections and auto repair business planning process.  We hope you create a forecast for your unique situation and plan, and then use this data to make sure your projections seem reasonable based on industry averages.   

Here is what we will cover in this article:

Learn How to Use this Financial Data

If you are creating projections for your startup business, or you just want to see how your existing business stacks up to industry averages, you can take your income statement and compare key ratios and percentages for your business compared to this industry average data.

How many auto repair businesses in the US are sole proprietorships

There are approximately 229,000 auto repair businesses in the US organized as sole proprietorships.  We specifically analyzed 228,853 companies based on the 2019 IRS tax return data. 

Average annual revenue for auto repair companies

The average annual revenue for all sole proprietorship auto repair businesses in the U.S. was just $68,019.  

While this number seems quite low, you have to remember that this likely includes people that are operating a 1 person repair shop out of their garage as a side business which could bring the total average revenue down. 

This underscores the importance of actually creating your own auto shop revenue projections based on your specific business plan.  

Average annual expenses for an auto repair business

The average annual expenses for all sole proprietorship auto repair businesses in the U.S. was $60,924.  

The raw dollar amount is less important here, the important thing to note is that all expenses for a auto repair business amounted to 90% of total revenue.   

Average net profit margin for a auto repair business

The average net profit margin for an auto repair company was 10%.  

How much can I make by owning an auto repair business? 

If you are wondering how much you might be able to make by owning your own auto repair practice, you can get a good idea by creating an auto repair revenue projection. Once you have a revenue forecast then simply multiply that by 10% (the net profit margin) to come up with a forecasted profit as the owner of the business. 

Top 9 expenses for an auto repair business

Based on the tax returns of 228,000+ sole proprietors operating in the auto repair industry, the following were the 9 largest business expenses as a percentage of revenue. 

Expense % of Revenue
Parts 34%
Labor 13%
Supplies 7%
Other business expenses 7%
Rent 6%
Car and truck expenses 5%
Depreciation 4%
Utilities 3%
Taxes paid 2%

Average parts cost for an auto repair shop

The average auto repair shop spent 34% of revenue on material costs, or parts.    

Average labor cost for an auto repair shop

The average auto repair business spent 13% of annual revenue on labor.  

If this sounds low to you, keep in mind that these are sole proprietors where the owner might be contributing a significant portion of the labor and not taking a salary, so the owner’s labor would be excluded from this calculation. 

Average supplies expense for an auto repair business

The average sole proprietor auto repair business spent roughly 7% of annual revenue on supplies for the shop.

Average rent expense for an auto repair business

The average sole proprietor auto repair company spent roughly 6% of annual revenue on rent.

Important Details about the Data

I want to point out a few key items about the data:

  • You can download this data for free from the IRS website
  • The data includes 228,853 auto repair sole proprietorships in the U.S. in 2019.  
  • This data will include businesses that operate full time, and businesses that only operate on a part time basis. 
  • Because of this, you should take the raw numbers for revenue, expenses and profit with a grain of salt, but the percentages can still be quite valuable when trying to forecast expenses for your business.  
  • This data includes businesses from all across the country, keep in mind that revenue and expenses can vary greatly based on your specific geographic location. 
  • We used 2019 data because we felt it was most likely to be representative of a “normal” environment for the industry.  COVID-19 caused disruption to almost every business in 2020 and 2021, so we wanted to utilize “normalized” data. 

If you have any questions about the data or how to utilize the data in your financial forecasting process please don’t hesitate to reach out to us! 

About the Author

Adam is the Co-founder of ProjectionHub which helps entrepreneurs create financial projections for potential investors, lenders and internal business planning. Since 2012, over 50,000 entrepreneurs from around the world have used ProjectionHub to help create financial projections.

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