How Car Wash Businesses Make Money (And Where They Fail)

Car Washes Aren’t What You Think — The Models That Make (or Lose) Millions

Car washes look like the perfect “easy business.”

Recurring memberships. Cars lined up. Low labor. Simple operations.

But that’s exactly where most buyers get it wrong.

In this episode of JackQuisitions, Jack Carr breaks down the biggest mistake people make when evaluating car washes—and why asking “Is this a good business?” is the wrong first question.

Because “car wash” isn’t one business. It’s four completely different models—with different economics, risks, and upside.

From self-serve sites to express tunnels backed by private equity, Jack walks through what actually drives profit, where deals fall apart, and how buyers end up overpaying for the wrong model.

What You’ll Learn:

• The 4 types of car wash models (and why they’re not interchangeable)
• Why “passive income” in car washes is often a myth
• The real risks behind express tunnel hype
• How site, equipment, and traffic determine success
• The biggest mistakes buyers make before even starting diligence
• A simple framework for evaluating any car wash deal

Connect with Jack:
X: https://x.com/thehvacjack

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Transcript

 Look, I'm just gonna say it. A lot of people want to buy car washes because the model sounds so easy. It sounds so simple. You have reoccurring memberships, you've got cars lined up, decent margins. I mean, all you're paying for is water, chemicals, and some marketing. It's. The semi-passive income fantasy. So let's break this down

from the outside. I get it. Car washes look like a great business, but there's one big problem. Most people, when they start talking about buying car washes. They aren't even asking the right first question. They're asking, is car washing a good business? Is it the right business for me? But that's not where you start.

Where you need to actually start with car washes is understand what type of model you're buying, what type of car wash you're buying. 'cause there really is four different types of car washes and that's where people get. Absolutely wrecked in the beginning. They don't understand what they're buying because each different model has vastly different economics.

It has vastly different problems. There's a bunch of different things that you have to worry about when you're buying specific car washes. Self-serve is not the same as an in bay and in bay is not the same as a full service wash, and none of those are the same as the high membership PE baby that are the express tunnels.

Those are different businesses with. Different labor models, different capital requirements, different failure points, and different upside. So if you want to buy a car wash, you need to slow down and understand the game you're stepping into before you even start. Because some of these are solid business models, but other of them are mediocre businesses, and they might have some real estate or maybe some, okay, real estate, mediocre business.

And then the other ones are just absolutely expensive maintenance. Pitfalls where you will lose your ass. If you're stuck under 5 million in revenue and you can't seem to be breaking through, then listen up. We are hosting the breaking 5 million workshop in person live happening May 5th through the seventh, 2026 at John's.

Headquarters in Akron, Ohio, hosted by me and John Wilson will be walking you through the exact $5 million flywheel that we both use to scale. You'll sit in on a live Wilson sales huddle, tour the shop, and see how operators actually run at this high level of scale, and you'll spend three days. Other serious hvac, plumbing, and home service owners who are pushing it to that next level.

Your ticket will include the meals, most of the transportation you need while you're here, and you can focus on what really matters, how to get the roadmap to break that 5 million with clarity. If you're serious about growth and you want to see what it actually takes to break 5 million, click the link below and we'll even give you $500 off your ticket with breaking early bird, all one word.

$500 off. Click below. First. From the broad model perspective, you have self-service like we talked about. You have in bay automatic, you have express tunnels, and then you have full service. Um, these are not interchangeable, so we're gonna start breaking down one by one, each one at what's the good, what's the bad, and why?

So first we're gonna start with self-service. This is the old school model. This is what, uh, you see on the corner. It's usually an old brick building. They have. Wands, the customer pulls up, washes their own car, grabs the wand, washes, soaps it up, puts 10, 20 bucks in, and then drives off low labor, right?

They maybe have one attendant working there. Low staffing complexity. Uh, usually simpler operations, but also lower tickets, so less money, less margin, can be lower drama. On the labor side, but also there people are thinking great, less people, less headaches, but maybe because don't confuse low labor with easy money.

'cause these sites can get rough, fast, right? If they're not maintained well, if they look tired, if they're neglected, they go onto the lower end, they lose traffic, they lose people coming through. Or the people that are coming through. And actually utilizing this low end self-serve are even worse Customers, they're the customers that you don't want.

They're the customers with the mud that's caked onto their trucks that are coming in and just blasting that mud off, leaving a mess, and then bouncing. You have to understand that these need to be maintained. They can't look tired, and they have to have some level of labor, whether it's yourself. Or you hire someone else.

Self-serve is often less of a brand play, so it's less of the, the private equity. So you're playing in a different market. Like people who are using self-service are only using self-service. They're not using self-service. And in bay automatics or tunnels, they're. They're a specific customer. They're a specific client, and as long as it's in a good area, it's maintained well, maybe one or two employees, and it produces some reliable cash flow.

It can be an all right business, but this is a very different analysis than any of the other three models. Next we go into in Bay Automatic. This is when you show up at a gas station or a C store, and they're a little small single building. They have, uh, it's automatic, but the car kind of stops and then it just handles everything while the car's in place.

These are great. They can be great. They look manageable. There's a small footprint, low labor, um, not super complex like tunnels, and they feel like neat little businesses, little passive businesses, but that's where the passive comes into play, right? These businesses. Can be absolute nightmares because they look passive into the machine, starts having issues.

And when you're buying these businesses, having that mechanical know-how, having the chemical background know-how to make sure that these are running well, right outta the gate. Is extremely important because this business know what you're getting into. Again, this business is piggybacking off of another business.

These generally aren't going to be standalones. They won't work well as standalones and so they are an equipment heavy business that are piggybacking on that C store. It's a last minute impulsive purchase, right? Uh, they're at the gas station. Oh, I do need to wash my car. Take my five minutes. Oh, you sometimes it even has it on the gas pump, uh, where you can go ahead and click that.

And so all of this matters because when you're buying this business, you need to understand that this business is a piggyback business that's working off of the other business. So it's important that the other business is a strong business. And so it's less about site, it's less about traffic. It's more about how many people are you bringing to that business so that it can piggyback into that impulse purchase and then.

Once you get there, it's, Hey, is this equipment good? Is the branding okay? Is there things in line that are pushing customers to move into this piggyback purchase great businesses, but they have to be ran well and they have to be in a good site attached to a good business. Next is the one we all think about, or the one we all think is the sexy model.

It's gonna be the express tunnels. So this is where people start acting like if they can get a good price, that they have found the Holy Grail, big throughput, uh, membership revenue. Better branding, bigger scale potential, uh, stronger. You could roll 'em up. It looks institutional. It feels modern. This is the one where people get pitched the dream, right?

And to be fair, it is the model with the most upside, but it's also the model where people overpay the fastest because private equities in this model, and so the multipliers that people are seeing on this are extremely high. The buyer comes in, they fall in love with the story. They see the membership and the subscriptions in the business, and the cars are stacking up and they think high demand, high margin, huge money.

They see a shiny tunnel and they think, this is my moat, but you need to slow down because this is still an equipment heavy site dependent, utility consuming operating business. You're not buying the software, you're buying a machine package. On a piece of dirt that relies on traffic patterns, chemical costs, water use, maintenance, labor, discipline, and local competition because you are competing with the other express tunnel down the way that has, uh, private equity backing.

And if you ignore any of these things, any of those, like five or six things, you're gonna get absolutely wrecked because this is the model where people are, you're paying the most, you're the most levered up. And it's the model where I would say you have to be the most cautious and the most understanding of reality, because express tunnels can be great, but it can also be a very expensive way that you learn that you.

Overestimated churn or underestimated CapEx or ignored the new competition down the street, uh, that has private equity backing of a hundred million dollars and can outmarket you every day of the week. Great model, but you have to be very careful and know exactly what you're getting into. And then. Of course there's full service.

Honestly, I don't even want to touch full service. Full service is what you think when you have 40 people working at the business is extremely labor heavy. They're washing the car, they're drying the car, they're vacuuming the car, they're doing everything. And there's situations where this can be a good business.

Um, I could talk about it, but I don't want to because that is my nightmare there. It's, it's all labor. It is a nightmare to run. In my opinion. And so I'm just gonna skip it 'cause it's my show. So when you're looking at buying your first car wash, the big point is stop saying car wash. Like it's one thing, it's not.

The model changes everything. It changes what drives revenue. It changes what breaks first. It changes where the margin leaks. It changes labor and CapEx, and it changes the kind of buyer that should even want this deal. And that's the first thing that I want you to understand before you get excited, before you even start this journey is understand like where you want to position yourself.

Because if you start in the the in bays and then you see a self serve. Don't, don't swap around just because the opportunity arises, unless the opportunity is absolutely a home run, because they're completely different businesses. It's like going and buying an HVAC business. I mean like, oh, hey, here, here's a car AC business.

Like yeah, they both work in ac, but. They're completely different. Let's talk about where buyers get it wrong though. For self-service, which is the, the first meant and easiest one. The mistake is that people think it's completely passive, that they can set up some cameras, switch the quarter machine over to card readers, and then they can walk away.

And the answer is you can't. There still is a labor component as much as I would love it not to be 'cause it's self-service, but you have to keep the site in good condition. You have to make sure that there's not misuse of the equipment and the equipment is actually working reliably. You have to make sure that your payment systems are up and running and there's no issues and you have to make sure that.

The neighborhood where you're buying this is quality because it can absolutely produce cash flow, but neglected or in a bad area, this ugly asset can get uglier quick, right? It's vandalism, it's people coming in and breaking things for no reason. It's. I, there's like a thousand things that people, again, the mud thing is a huge one.

Like there's 10,000 things that can go wrong, and if you don't have somebody there or close that can actually fix it and be on site, it, it's, it becomes a passive nightmare. But can be great businesses, not usually a roll-up, but. Hey, uh, they can be converted. Some have seen conversions where some people put in bays in as like one of their bays of their self-serve.

So like there's options there and, and there can be some really good options if the traffic count is right and the community is right. Um, so I wouldn't totally discount these. It's just for a specific buyer. Next are the in bay automatics, and I think that here the mistake is that you call 'em passive again.

When it works, it feels great. Like this is an awesome business. I know a few operators who run 6, 10, 12 of these. The leases are great. They have, um, tons of customers coming through. They're in parking lots where the, it's a Walmart and it has a gas station in the Walmart parking lot, and then this is attached and they just print money, but.

The simplicity can disappear extremely quickly. If you don't understand these traffic counts or, or understand the value of the gas station that it's in. Even though there's a Walmart and there's a gas station and there's a in bay, it doesn't necessarily mean that you're going to traffic all the way through there.

'cause what if that gas station is 20 cents higher? Per gallon. Then the guy across the street, there's a Costco across the street that has cheaper, then you're gonna lose that traffic into the gas station and then lose that traffic into your in bay. So understanding how the flow of traffic works in the in bays is so incredibly important.

And then. Making sure that if people are coming, that your service history and that the uptime history and that the repair frequency, that you're making sure that all of these are functioning so well because it can really hurt if you have a little bit of downtime. Uh, that, that's where people get absolutely killed in this business.

And then lastly, express tunnels. The mistake here is that people are buying potential instead of buying actual economics, they think, Hey, I can grow memberships, or I can market better, or I can optimize labor. Yeah, maybe you can, but that shouldn't be the core investment thesis. The first question should be, is this current wash or current site or current operation already a working business?

If the answer is no. The fix it thing is a big risk because you're going to be overpaying. It's not cheap. It's not a cheap category to be wrong in. You're gonna be paying high multiples, and so you want to be paying high multiples if you are gonna pay high multiples for something that's working. For something that is producing money, day one, who has memberships day one.

And then that from there then you can scale. Like it's a scalable issue, not a can I turn, can I turn this around issue? So you can't do diligence all these things the same way. That would be silly. Um, you have to diligence them all differently. And so as you start going down this path, the buyer should be thinking, not car wash.

Car wash, car wash. How do I flip 'em? How do I do this? You need to be thinking, Hey, model first. Which of these models am I gonna buy then move into site? Is this site good? Does this have good traffic counts? Am I seeing enough potential here? Is there a new community that somebody didn't recognize going in down the street that.

Flows, traffic in this direction. We have to worry about site. This is a real estate play. Second. So second thing, you worry about site, then you move into equipment. Is the equipment maintained? Is it well maintained? Because some of these pieces of equipment, some of these motors and pumps, not only do they have long lead times to repair, they also are extremely expensive and can wipe out almost your entire margin.

Month, two month, three month worth of margin in a single day. And then we move into labor. Hey, can I get labor for this? Usually the answer's yes, um, even if it's high school kids spraying off whatever, and then valuation, am I paying correctly? So that's the order that I would fall through is making sure that all of the, it's a good business first, then it's a good price after you pick your model.

In that order, not any other way. One last point. Car washes are a great business, right? You have super low margin. You're paying for water, especially if you do injection chemicals. You're paying cheap injection chemicals, 7, 8, 10, 12 cents per car, plus some marketing and overhead, a dollar per car, and you're selling it for 12, 14 and you have high traffic coming through.

It can be an absolutely wonderful business if you buy, right? Buy. Good traffic, good equipment, good model, make sure that everything flows and then go for there. If you like what you heard today, guys like sub subscribe. I will break down each of these models in a full one part series if you guys are interested.

Uh, I love car washes. I have some buddies who run car washes and it is some of the most exciting stuff out there. So if you want me to break 'em down, I'll do another episode for each one of these models, except full service 'cause I hate full service. So there you go. See ya.