Are Car Washes a Sound Real Estate Investment?
Car washes are a technology-driven, high-demand industry that thousands of Americans use daily. According to the U.S. Department of Transportation Federal Highway Administration, more than 90 percent of U.S. households have at least one vehicle and 66 percent of Americans get their cars washed about 13 times per year. However. Many Americans do not want to spend one to two hours cleaning their car. Something like an express car wash is a fast, easy, and inexpensive solution to the problem of a dirty vehicle. With this in mind, car washes have become a popular asset among net lease investors. Since they are service-based, car washes are internet-resistant, require little labor, and produce high-profit returns. Investing in car washes is an increasing trend throughout the country as more and more buyers realize that they are stable long-term passive investments.
Car Wash Investment Popularity
Car wash operators are buying a record number of prime real estate locations across the country. These record highs can be attributed to the fact that 72% of U.S. drivers use professional car wash services regularly, so there is a high demand for this service type. Additionally, as environmental regulations prohibiting residential car washing techniques become stricter, the customer base for professional car washes is expected to grow, fueling demand for these services even more.
One of the major factors driving the market is rising consumer interest in automobile maintenance. The higher percentage of Americans interested in the upkeep of their vehicles has dramatically affected car wash trends. People want to maintain the value of their cars without having to do all the heavy lifting.
The global car wash services market is expected to grow at a compound annual growth rate (CAGR) of 3.1 percent from 2022 to 2030, with a value of USD 29.3 billion in 2021. North America led the global market in 2021, accounting for more than 50 percent of total revenue. This trend can be traced back to increased consumer spending on comfort and leisure and the widespread use of professional vehicle wash services.
Automobile dealerships have begun installing automated car washes to improve their Customer Satisfaction Index (CSI), with in-bay washes being the most popular consumer choice. These installments increase the popularity of in-bay/roll-over automatic car wash services. Furthermore, combination washes are becoming increasingly popular among roll-over/in-bay vehicle wash services. Customers can use this service to choose between touchless, friction, or a combination of both types of washes.
Technology Advancements
The peak of the coronavirus pandemic (COVID-19) brought about significant advancements in the car wash industry. Since then, consumers have preferred on-demand services with technology-driven processes for car washing. Owners focused on technological advancements have seen a visible increase in overall profits. New improvements that have made the process smoother for customers include car wash apps, easy-to-use websites, and even technology advancements in car wash equipment used in the cleaning process.
The cashless payment segment is also expected to grow at a rate of 4.6 percent. Installing an integrated payment solution, also known as a Point-Of-Sale (POS) system, across pay stations is an excellent method to assist car wash business owners in increasing efficiency and sales and gaining detailed insights into their customers. Consumers in the millennial generation expect to be able to pay in the way that is most convenient for them, whether that is through tokens, debit cards, loyalty cards, EMV-enabled credit card payments, or smartphone payments.
