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Auto Repair Shop Monthly Expenses To Help You Create a Budget

Posted by BayIQ on March 3, 2021 | 0 Comments

A lot goes into opening an auto repair business. The ‘to-do list’ might feel never-ending but it’s critical not to forget to budget for recurring expenses. The grim reality is that 60% of new businesses fail due to a lack of business plan and proper budgeting. To avoid defeat, auto repair shop monthly expenses need to be tracked and forecasted accurately. Start with the following:


A common mistake that companies make when budgeting for employee costs is only accounting for wages, when in reality, this only makes up a little over 50% of the total compensation.

The average salary for employees in the automotive repair industry is $22.19 per hour. This number doesn’t include benefits or pension that will add an additional $19.55 per hour onto your budget. 


Average rent for an auto repair shop can be anywhere between $1,500 to $15,000 a month depending on the size. And, even if you own the building you’re still likely to pay for utilities and possibly a mortgage. 

Mortgage and rent should account for roughly 6.64% of your auto repair shop monthly expenses. Essentially, you don’t want to be house poor. 

Regular Maintenance

Another important expense to consider is regular maintenance. This could be as simple as getting the walls painted or fixing a leaky roof. A good rule of thumb is to set aside 1% of your monthly rent or mortgage for maintenance cost. So, if your monthly rent is $2000, you’d budget $200 for maintenance.



Insurance costs range from $39 to $89 monthly depending on the scale of your business operations. Often it can increase and decrease depending on the type of coverage and deductible. You may also consider options such as Business Owners Policy (BOP) that allow you to combine insurance packages that are specifically tailored for small to medium-size businesses.

There are many different types of insurance out there, but four that you need to consider are: 

  • General liability- This coverage protects your business from injury or accident claims, property damage, false or misleading advertisement. 
  • Commercial property- This takes care of costs to repair or replace any damage to your assets 
  • Workers compensation- This insurance covers your business from medical expenses or lost wages in case of employee injuries or illness
  • Garage keepers liability- This insurance is designed for businesses such as auto repair shops that covers any damage to customer vehicles while in your care, custody, or control.


Generally, 30% of your income should be set aside for taxes. Here are a few of the best practices to help your small business keep on top of these required payments:

  • Pay taxes quarterly- You are required to pay taxes quarterly though the fine applied if you wait until April 20th is generally minimal. For the sake of not having a large bill to deal with, budget in quarterly taxes expenses. 
  • Practice sufficient record-keeping- Invest in accounting software to help you accurately keep records of tax related income and expenses. Not only will this ensure your records are accurate, it may also present opportunities for bigger write-offs. 
  • Hire a reliant accountant- Accounting software can help with day to day operations but when it’s time to file taxes, you’ll want a professional on your side. Accountants can also work with you to develop a realistic monthly budget.


Marketing is a large part of growing your brand. Simply, you won’t have any customers if no one knows about your services. If you’re a small auto shop earning less than $5 million per year, 7-8% of revenue should be allocated to marketing efforts such as: 

  • Advertisements- Sign spinners, billboards, an online ad, or even a commercial
  • Website design and development- Studies show that 90% of people now use the internet to find local businesses. A new website can cost anywhere from $2000 to $10,000.
  • Marketing collateral- Flyers, direct mail, table covers for trade shoes etc. 


The Help of Automation  

Another marketing expense to consider is the use of automated software platforms, like BayIQ. With a suite of product features that help to boost your marketing efforts without the heavy lifting, BayIQ caters specifically to auto repair and tire shops. 

  • Loyalty rewards program- Boost your shop’s retention rates with an easy-to-use program that rewards customer loyalty
  • Email and text marketing- effortlessly reach out to your customer base with automated messages
  • Online reviews- Improve your online reputation and engage with the wider community by automatically soliciting reviews from customers after service
  • Reports and dashboards- automatically track and create reports, ensuring you maintain the most diligent book-keeping practices without the extra effort

With the help of BayIQ, perfect your marketing strategy and get your finances in order quickly.