How to Finance a Tire and Quick Lube Addition
Step-by-step guide to adding tire services and quick lube operations to your auto repair shop, including equipment costs, space requirements, and financing options.
Adding tire services or quick lube operations to your auto repair shop can diversify revenue, attract new customers, and increase per-vehicle ticket averages. Tire and lube work brings customers in on a regular schedule — and while they are there, you can identify and sell additional services.
This guide covers the equipment, space, and financing required to add these high-traffic services to your existing operation.
Why Add Tire and Lube Services
The business case for tire and quick lube additions:
- Recurring revenue — Oil changes bring customers back every 3-6 months. Tire rotations quarterly. Tire replacement every 3-5 years.
- Customer capture — Every tire or lube customer is an opportunity for upselling brake work, suspension, and other repairs.
- Competitive positioning — One-stop shops retain more customers than specialists.
- Higher bay utilization — Quick services fill gaps between longer repair jobs.
- Predictable margins — Tire and lube pricing is relatively stable and transparent.
Upsell Opportunity
Industry data shows that 30-40% of quick lube customers accept additional recommended services. A thorough vehicle inspection during every oil change is your best sales tool.
Equipment Costs: Tire Services
Adding tire capabilities requires specific equipment:
| Equipment | Cost Range | Notes |
|---|---|---|
| Tire changer (standard) | $4,000-$8,000 | Handles most passenger and light truck |
| Tire changer (heavy-duty/low-profile) | $8,000-$15,000 | For performance and SUV tires |
| Wheel balancer (standard) | $3,000-$6,000 | Spin balancer for most applications |
| Wheel balancer (road force) | $10,000-$20,000 | Premium balancing; customer preference |
| Alignment machine (2-wheel) | $12,000-$20,000 | Basic alignment capability |
| Alignment machine (4-wheel) | $25,000-$45,000 | Full alignment service |
| Tire storage rack | $500-$2,000 | For seasonal tire storage program |
| TPMS tools and sensors | $1,000-$3,000 | Required for modern vehicles |
Equipment Costs: Quick Lube
Quick lube operations require additional investment:
| Equipment | Cost Range | Notes |
|---|---|---|
| Oil dispensing system (4-reel) | $3,000-$6,000 | Bulk oil storage and dispensing |
| Bulk oil tanks (4-5 types) | $2,000-$5,000 | Conventional, synthetic, diesel, etc. |
| Waste oil tank and pump | $1,500-$3,000 | Required for recycling |
| Fluid evacuation equipment | $2,000-$4,000 | Transmission, coolant, brake fluid |
| Lift (if adding bay) | $8,000-$15,000 | Quick-cycle lift preferred |
| Oil drain and drain pans | $500-$1,500 | Basic supplies |
| POS system upgrade | $1,000-$3,000 | Quick lube specific features |
Total Investment Scenarios
Depending on your current capabilities and goals:
| Addition Type | Equipment Cost | Build-out Cost | Total Investment |
|---|---|---|---|
| Basic tire service only | $15,000-$25,000 | $2,000-$5,000 | $17,000-$30,000 |
| Tire + alignment | $40,000-$70,000 | $5,000-$10,000 | $45,000-$80,000 |
| Quick lube only (existing bay) | $10,000-$20,000 | $3,000-$8,000 | $13,000-$28,000 |
| Quick lube (add dedicated bay) | $25,000-$40,000 | $15,000-$30,000 | $40,000-$70,000 |
| Full tire/lube center | $60,000-$120,000 | $20,000-$50,000 | $80,000-$170,000 |
Financing Options
Several financing approaches work for tire and lube additions:
- Equipment financing — Best for equipment-heavy projects. 3-7 year terms, 7-15% rates. Equipment serves as collateral.
- SBA 7(a) loan — Good for larger projects combining equipment and build-out. Up to 10 years, Prime + 2-3%.
- Business line of credit — Flexible option for phased implementation. Draw as needed, pay interest only on outstanding balance.
- Vendor financing — Some equipment manufacturers offer financing. Compare rates to independent lenders.
- Tire dealer programs — Major tire distributors sometimes offer favorable terms for shops that commit to their brand.
Section 179 Deduction
Equipment purchases typically qualify for Section 179 deduction, allowing you to deduct the full purchase price in the year of purchase rather than depreciating over time. Consult your accountant for current limits and your specific situation.
Space and Layout Requirements
Before committing to equipment, verify your space works:
- Tire bay — Minimum 14 x 20 feet for changer and balancer with working room
- Alignment bay — 12 x 40 feet minimum for full alignment capability
- Quick lube bay — 12 x 25 feet for drive-through style; less for in-bay service
- Bulk oil storage — 10 x 10 feet for tanks and dispensing (fire code compliant)
- Tire storage — Consider seasonal tire storage as additional revenue; requires clean, secure space
- Customer waiting — Tire and lube customers often wait; adequate seating matters
Operational Considerations
Beyond equipment, plan for operational requirements:
- Tire inventory — Will you stock tires or order as needed? Stocking improves speed but ties up capital ($10,000-$30,000 initial inventory).
- Tire distributor relationships — Negotiate terms with distributors. Same-day delivery is common in most markets.
- Staffing — Quick lube may require dedicated technicians; tire mounting has learning curve.
- Training — TPMS, proper mounting techniques, alignment certification ($500-$2,000 per tech).
- Pricing strategy — Quick lube is competitive on price; tire sales vary. Alignment is typically higher margin.
- Waste oil disposal — Establish recycling relationship. Some services pay for waste oil.
Example: Adding Tire Service to General Repair Shop
Situation: A 5-bay general repair shop in suburban Atlanta with $720,000 annual revenue currently refers all tire work to a nearby tire store. Owner estimates $60,000+ in lost tire and alignment revenue annually.
Equipment package: Heavy-duty tire changer ($12,000), road force balancer ($15,000), 4-wheel alignment machine ($32,000), TPMS tools ($2,000), tire storage rack ($1,500). Total equipment: $62,500.
Build-out: Convert existing underutilized bay for alignment ($8,000 electrical, floor, and signage). Total project: $70,500.
Financing: Equipment loan at 9% for 6 years. Monthly payment: $1,215.
Revenue projection: 25 tire sets per month at $150 average profit = $3,750; 30 alignments at $80 profit = $2,400. Monthly gross profit: $6,150.
Net monthly benefit: $6,150 - $1,215 = $4,935 net.
Additional benefit: Tire customers often accept other recommended services. Projected incremental repair revenue: $2,000/month.
This scenario assumes successful marketing and ramp-up to steady state volume. Results depend on market competition and execution.
Marketing Tire and Lube Services
Building volume requires active marketing:
- Existing customer communication — Email and text your database about new services
- Road signage — Tire and lube customers often drive by; visibility matters
- Online visibility — Update Google Business Profile, website, and local directories
- Seasonal promotions — Pre-winter tire changeovers, spring alignment specials
- Fleet outreach — Local businesses need tire and lube services for company vehicles
- Price positioning — Competitive on oil changes; fair on tires; premium on alignment
Common Implementation Mistakes
Avoid these errors when adding tire and lube services:
- Undersized equipment — Budget tire changers struggle with modern low-profile tires. Buy quality.
- Ignoring alignment — Tire sales without alignment capability leaves money on the table.
- Poor bay layout — Inefficient layout slows service times. Plan workflow before installation.
- No tire inventory strategy — Decide upfront: stock tires or just-in-time ordering.
- Untrained staff — TPMS errors and improper mounting cause expensive comebacks.
- Unrealistic volume projections — Building tire business takes time. Plan 6-12 months to full volume.
Adding tire and quick lube services transforms your auto repair shop into a comprehensive vehicle maintenance destination. The right equipment, financed appropriately, can generate strong returns while bringing in customers for your higher-margin repair work.
Liminal can help you compare equipment financing options for tire and lube additions. Our marketplace is free, takes about 2 minutes, and shows you offers without impacting your credit score.
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Read more →Important Disclosure
Not Financial Advice: The information provided in this article is for general informational purposes only and does not constitute financial, legal, or professional advice. You should consult with qualified professionals before making any financial decisions.
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