31 Amazing Car Wash Industry Trends

Car washing and automotive detailing might be considered a luxury for some, but it is also an industry that many are turning to because of the time savings it provides. Over the past 10 years, the number of vehicle owners who wash and clean their cars at homes has dropped significantly.

According to the International Carwash Association, it is believed that the total global annual car wash sales revenues exceed $24 billion.

The market for this industry is nearly 50% of the total overall market and it has seen annualized growth of 2.9% from 2011-2016 according to IBIS World. Assuming that disposable income levels continue to grow and local regulations prohibiting at-home car washing expand, the revenue opportunities for the industry as a whole are expected to steadily rise.

Accessing New Payment Options Must Happen

  • According to Professional Carwashing and Detailing, credit card options have become mainstream in the carwash world — even for unattended and self-serve washes.
  • Cellular based and web-based payment options, such as Apple Pay, PayPal, or even Bitcoin, may encourage new customers to approach the car washing industry for the first time.
  • Greg Swett, President of the International Detailing Association, says that scheduling and invoicing software in the office is helping to streamline customer information and requested services so that more time can be spent delivering quality services.
  • Instead of expanding service options, look for local businesses to expand payment options and access to customer service, especially at self-serve locations, to encourage more consumer traffic.
  • Automated locations may also tie-in credit card or mobile payment options to miscellaneous detailing services for added revenue as well, from vacuums to vending machines.
  • Consumers who are allowed to pay via a check are going to spend 14x more, on average, then paying by a mobile device.
  • Cash is not the #1 payment choice by the majority of consumers, according to The Financial Brand, but it plays a significant role as the fallback payment instrument for most consumers.

The issue the car wash industry faces right now is modernization. Many local businesses are still operating on a coin-based format or require bill readers. At the core of this issue is how much a consumer is willing to spend. When retail cash transactions are averaged for every industry, the average transaction is just $21. If a consumer is allowed to use their debit card, then the average transaction climbs to $44. When consumers pay by check, the average transaction rises to $168. With many banks offering mobile apps that allow for instant check approval, an upgrade in payment processing could really expand the revenues generated for this industry.

Regulations and Labor Issues Shape the Car Wash Industry

  • According to Jim Rooney, President of the SECWA, when unemployment rates dip below 6%, it becomes difficult for car wash owners to find talented employees.
  • Car washes are often targeted for water reclamation and other systems. By 2025, it is believed that water will be shipped through pipelines for delivery much like oil is shipped today.
  • Water consumption has tripled globally over the last 50 years, yet the Environmental Protection Agency (EPA) estimates that in the biggest municipalities over 30% of the water pipes are 40-80 years old.
  • Water and sewer rates have risen 25% on average since 2006 in Canada and will continue to climb, especially if infrastructure issues must be addressed.
  • For car wash owners, the use of water reclamation can save an operator anywhere from $8,000 to over $20,000 per year in water and sewer costs while preventing potential fines from regulations that are in place.
  • Implementing a properly designed water reclamation system can save 80-85% on water and sewer bills and can qualify for rebates from local municipalities.
  • In California, car washes are required to reuse 50% of their water, while in Wisconsin, there are water quality restrictions placed on the water that is reused.
  • Watch for automation or self-service options to increase in the detailing sub-market thanks to Affordable Care Act requirements and adjustments to the minimum wage in some markets.

There is going to be a cost associated with meeting the standards that regulations require in every local jurisdiction. For some owners in the car wash industry, these issues will be minimal. For others, there will be extensive investments required of them, from using zero degree nozzles to the installation of a high-efficiency reverse osmosis system. Add in the struggle of finding high-quality employees when there are low unemployment rates and there are some owners who will find it challenging to increase their revenues even though the industry is primed for potential growth.

If the Price of Oil Falls, the Chances for Growth Rise

  • When gas prices go down, then the amount of driving people do on a regular basis goes up. This creates dirty vehicles that will require cleaning, especially for those who are traveling away from home.
  • As the prices of vehicles continues to increase, the desire to own a vehicle longer increases as well. The average age of a vehicle on US roadways is higher than it has ever been before.
  • Small businesses within the car wash industry will continue to be able to take advantage of these opportunities. According to IBIS World, the top 4 companies within this industry only account for 6% of the industry’s total revenues.
  • Data from Hoovers indicates that even the top 50 businesses within the US car wash industry right now account for only 20% of the total revenues which are generated.
  • Industry value added, which measures the industry’s contribution to GDP, is expected to rise at an average annual rate of 2.9% between now and 2021, slightly above GDP growth of 2.2% over the same period.
  • Watch for mergers and acquisitions to create a fluid form of site ownership as local businesses which may struggle seek to find relief from franchising or consolidation with other owners that aren’t facing a similar struggle.
  • According to CSP Daily News, regardless of strategy, the availability of consistent service and expertise remained an issue in some markets.
  • Also watch for operators to be implementing new product or service offerings to increase their ticket averages. Protectant products, particularly glass treatments, have been popular for operators wishing to move customers toward the highest-price wash.

Although car wash owners are doing a good job of pushing their customers toward the highest-priced wash possible, a careful balancing act must take place so that these consumers aren’t driven away by rising prices. Watch for co-branding opportunities to increase in the next decade, especially with fueling stations, for consumers who take advantage of lower gas prices to do more traveling. By offering small discounts, more services can be potentially provided to further increase revenue opportunities. It’s for reasons like these that the car wash industry continue to remains an attractive proposition despite its potential challenges.

Why the Future Looks so Bright for the Car Wash Industry

  • According to Road and Travel Magazine, nearly $24 billion is spent by US vehicle owners every year repairing the damage corrosion causes.
  • The Environmental Protection Agency reports that acid rain, which is particularly problematic in urban and industrial areas, leads to paint damage on vehicles when the moisture evaporates.
  • Salt from the sea, salt added to winter roads, and even tree sap or dead bugs can all cause rust under the carriage, in the wheel wells, or even under the hood.
  • Just 1-2 professional car washes per month allow vehicle owners the opportunity to maintain their dignity while providing proactive interventions for one of their biggest investments.
  • The number of untapped consumers is large: a recent survey shows that more than 50% of car owners wash their cars less than once a month and another 16% of owners say that they never wash their cars.
  • Carlove.org reports that 27% of vehicle owners say that their car smells or that it used to smell because of the garbage they kept in it.
  • There are currently just 75,000 car washes in the United States, which means there are about 3 car washes for every incorporated community.

Although having 3 car washes per community sounds like a high number, keep in mind that there are 10 cities which exceed a population of 1 million. These incorporated areas are included in the average just as an incorporated town like New Glarus, WI, which has fewer than 5,000 people. Many communities may be experiencing a shortage in car wash locations and regulations may force owners to wash their vehicles professionally. This may be why about 1 in 7 vehicle owners never wash their vehicle. There are many opportunities to bring in new customers, as well as expand current service offerings to increase per-sale ratios. Because of this, despite the challenges some local communities may have, there is a strong opportunity for revenue growth over the next decade.

Facts About the Car Wash

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