Commercial Real Estate News / Buying / Prime Locations for High-Traffic Car Wash Businesses

Prime Locations for High-Traffic Car Wash Businesses

Published: 03-12-24 Category: Buying

Specializes in providing actionable insights into the commercial real estate space for investors, brokers, lessors, and lessees. He covers quarterly market data reports, investment strategies, how-to guides, and top-down perspectives on market movements.

Drive past any modern drive-through car wash, and you'll probably see plenty of vehicles changing from gritty to glamorous.

Potential investors looking for growing businesses with positive prospects need look no further than a high-traffic, automated car wash. Just two years ago, the national car wash market was estimated at over $15 billion, and it's expected to grow at a compound annual growth rate of 5.7% during the next six years.

Research from 2021 found that over 65% of drivers wash their vehicles at least once a month on average. And here's some particularly encouraging data: during the past 10 years, more than 70% of America's vehicle owners made the switch from washing their car at home to visiting a car wash.

Here, we'll introduce you to car wash basics for investors in commercial real estate (CRE). This will enable you to carry out due diligence to help you find the ideal location for a new high-traffic car wash business.

First, we'll look at today's modern car wash industry and the latest technology available to CRE investors and owners.

Faster, Cleaner, Shinier: Today's Car Wash

The most popular car washes offer the ideal combination of speed, price, and results. Today's investor has a variety of options, including purchasing an existing facility, going the franchise route, or building from the ground up.

The basic car wash from decades ago was a simple affair. After liquid soap was applied, large brushes would surround the car and begin spinning. After a set time, a rinse cycle would begin. Large air blowers would remove some water, rarely drying the vehicle.

Today's car washes are constantly competing for consumers by promising faster, better results than competitors. An owner may add a variety of high-tech, custom elements, including:

The wash wrap, which is a set of ribbons or brushes guided by a mechanical frame or roller system. Newer wrap systems remove more grime without damaging automotive finishes.
Touch-free washing systems that clean with high-pressure water sprayers instead of wash wrap brushes or ribbons.
Pre-wash treatments to remove insects, grease and similar materials.
Finishing treatments such as hot wax, rain repellents, and ceramic sealants to preserve shine.
Drying systems with streamlined designs. These eliminate the need for lengthy hand-drying by your staff or vehicle owners.
Pay systems that enable consumers to purchase a number of washes ahead of time. This simplifies payments, encourages repeat business and helps prevent delays.

High-traffic car washes may offer additional post-wash services and amenities, like free vacuums and hand-drying by car wash staff.

Most owners recycle and reuse the water used during every wash. Modern water recycling systems include filtering and decontamination methods that reduce overall costs.

In addition to saving money on water, research also shows that 35% of your potential customers prefer eco-friendly services, and many are willing to pay more for this option. Keep this in mind when it's time to create some marketing materials!

Understanding the workings of a high-traffic car wash is important, as it enables an owner to offer a customized, high-quality wash experience and lasting results. However, the most state-of-the-art car wash needs to be in an ideal location.

Let's begin by looking at location-related demographics.

Where to Park Your Car Wash

Every CRE investor understands the importance of location, no matter what type of facility or retail establishment. Researching the best possible location for a new, stand-alone car wash is essential.

Your initial research should look at several types of demographic data, including:

The average household income for the area you're considering. Can the neighborhood's consumers afford regular visits? Will they buy multi-visit passes or subscriptions?
Current zoning data. Converting property from residential to commercial zoning can be difficult and expensive.
The number of cars and trucks owned by local consumers. Are there enough to supply your business with an adequate number of visitors?
Drive-by traffic numbers.
A search for nearby competition. Does a proposed area already have a modern, high-traffic car wash? Unless the existing competitor offers poor or outmoded services, setting up business within a three-mile radius incurs considerable risk.

Another equally important factor: your proposed car wash's retail neighbors.

How Neighboring Retailers Can Affect Your Business

During the height of the COVID pandemic, many retailers and investors expected a permanent loss in foot traffic as more consumers turned to online shopping. However, retail has more than recovered.

Today's consumers often plan and carry out several shopping errands during the same outing. A typical trip to a retail mall or shopping center will include visits to smaller, specialist shops as well as a visit to a big-box retailer, with or without a grocery store.

Collecting data for several retail shopping areas can help you choose the best options for a new car wash, especially if adequate commercially zoned space already exists. Be sure to consider the following.

How popular is the big-box retailer?
Does the shopping area have more than one big-box retailer? Two can bring in considerably more vehicular traffic.
Are the surrounding retailers catering to bargain shoppers or consumers willing to pay top dollar for non-essentials? Chances are, your car wash will be busier if it's next to an upmarket retailer than a discount/dollar store.
Retailers that specialize in merchandise for winter activities, such as ski shops, make ideal neighbors. This is because most car washes enjoy more traffic during winter months.
Is data available for the average foot traffic for the shopping area?

In addition to retail options, the area's traffic data is another factor to study.

More Traffic Considerations

Are there major business offices near your proposed business? The employees at these offices may visit your car wash when running lunchtime errands or after work.

Not all consumers plan to visit a car wash ahead of time. It may be a spur-of-the-moment decision. This is why you'll need to consider vehicular traffic data as well as foot traffic.

Ideally, choose a location where speed limits are less than 45 miles per hour, with easy access to your car wash. Busier areas with stop lights also help slow down indecisive drivers, making it easier to visit you.

Last but certainly not least, finding an area where your next-door neighbor is a gas station can be ideal, with or without a shopping center nearby.

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