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Are self serves going extinct?

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Nickson

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I'm looking at possibly buying three SSs here. I talked to a supplier, and he said "yeah, a lot of those are for sale. You can go through a tunnel wash as cheap as you can stand there and wash it yourself, and you can vacuum your car for free."

That kind of made me bearish. What are your thoughts?
 
Rfreeman

Rfreeman

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No there will always be a market segment for the customer who takes pride in doing it themselves at a good well run car wash site. I was of the same opinion when I got into the business (self serve) 10 years ago. Let's just say, 4 sites later (had a 5th but sold it, eminent domain situation) my confidence remains strong in the business model and industry.

I don't know where you are located but here in the DFW Texas market I don't think tunnel prices compare to self serve prices. I would estimate on average for my market my customers spend around $7 - $10 to wash their car vs. a tunnel bottom packages are now $12 - $15.
 
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Axxlrod

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I have combo site with both a tunnel and SS bays located at the same site. There are always people that want to DIY for whatever their reason. Plus not every vehicle will fit down a tunnel.

I do not think the SS model is going extinct, but I will say I do not see new ones being built because they do not pencil out at today's high costs of construction, equip and financing.
 
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jlouis23603

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To share my experience I own a 4 bay ss. I have found that it holds a base of loyal customers that have been coming to it since it opened it 1994. I've fixed a of the major issues and spoke with a lot of customers. Many people prefer hand washing their vehicles and if you can provide them with great pressure, great chemicals, an active owner and a clean place they'll keep coming back.

I am currently looking at purchasing a 3bay with an automatic. Ive gone to the wash on the weekend and sat across the street and watch the traffic. I saw campers, boats, offroad vehicles (my eye twitched because of the mud) and the amount of people who wanted to handwash their car was a good indicator that these services will always have a niche in the market.
 
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washnshine

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I have a tunnel and self serves at the same location, and between the two, I can wash pretty much anything that comes down the street. I have some tunnel only customers, some self serve only and some who go from one to the other - perhaps depending on time, weather, etc. I would not want to be without my self serves and the customers they attract.
 
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HeyVern

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I have at least 3 UTVs a day come through mine a day. Between my automatic and SS bays, I can wash anything the road.
 
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Randy

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Up here in the Pacific Northwest the Self-serve car washes are slowing dying away. There hasn’t been a new S/S built in well over 25 years because of the high land costs and all the additional fee’s. The ones that have been sold are no longer car washes. 2 years ago 2 closed car washes sold for $885,000 each, one is been repurposed into a used car lot and the other is slowly being remodeled, I very seldom see much activity there. Another car wash closed last week, fenced off. The homeless people drove that car wash out of business. It’s for sale for $1.2 million. I had a tunnel reopen a half a mile away from my wash, Free vac’s, wash all you want for $9.99 per month if you pay a year in advance. My business is down almost 60%. Then I find out that there is another express tunnel going to be built almost directly across the street from me. They paid $1.9 million for that property. I’ve been trying to figure out a way of getting out of the car wash business with property values so high it’s not profitable to have a S/S car wash anymore. We’ve been approached a few times with some ridiculous offers.
 
Eric H

Eric H

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If you have a good population base, probably 20,000 or more, you’ll make enough money to survive as long as your market isn’t extremely over saturated.
Also, NEW self serves are almost always cost prohibitive to build. The ROI for land, building, equipment and all of the various support equipment is a rather long time. It’s hard to pencil out an ROI that makes it worth while on a new build.
So, if no new SS are not being built it means you’ll corner the market for that segment of the industry.
Adding an IBA or 2 will also be beneficial but that may be a whole other topic of discussion
 
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Earl Weiss

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I have a tunnel and SS on same property. There are customers for both.
 

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Wash4Life

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Axxlrod said:
I have combo site with both a tunnel and SS bays located at the same site. There are always people that want to DIY for whatever their reason. Plus not every vehicle will fit down a tunnel.

I do not think the SS model is going extinct, but I will say I do not see new ones being built because they do not pencil out at today's high costs of construction, equip and financing.
Click to expand...
I agree 100%. I don't think we're going to see any new sites built for a while. I don't see IBAs being built for that matter. The only construction I see right now are express exterior tunnels.
 
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Greg Pack

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My SS revenue is higher than it’s ever been. Part of that is due to attrition in the business.

Existing sites may be a relative bargain, often being available for a fraction of what a ground up new build would cost.
 
I.B. Washincars

I.B. Washincars

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SS/IBA went through a building boom around the turn of the century. Probably nowhere near as bad as the Express is now, but a lot of the washes should never have been built. That's pretty much why it's so easy to find and buy an existing wash now. I think the tide is slowly starting to turn on the express washes. Some will survive, and others will be vacant rotting carcasses dotting the landscape. I may be wrong, but I don't think I will.
 
Rfreeman

Rfreeman

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I don't know about everyone else, but I know here in my market there isn't many ss washes for sale. The ones that are for sale are listed at ridiculous prices that wouldn't pencil out. For example, $600K for a wash that does gross revenue of $50-60K and the land value isn't carrying that valuation, I don't know what is.

I also know some washes that are leveraged up to their necks, one good recession or pull back in the overall economy and its game over!
 
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washnshine

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Probably more that 50% of the SS around me that were not performing have been torn down. I have not seen any sold and revitalized by a new owner. The ones that have not been torn down currently sit vacant. No one is buying them around me.
 
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Keno

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Rfreeman said:
I don't know about everyone else, but I know here in my market there isn't many ss washes for sale. The ones that are for sale are listed at ridiculous prices that wouldn't pencil out. For example, $600K for a wash that does gross revenue of $50-60K and the land value isn't carrying that valuation, I don't know what is.

I also know some washes that are leveraged up to their necks, one good recession or pull back in the overall economy and its game over!
Click to expand...
Probably $ they pocketing off the books, thinking they should get paid for the value also.

I think we will soon start seeing these express washes going on the distressed market, whether foreclosure or back to the bank
 
kentadel

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Son will be building a SS/Auto this Summer. Business here still supports it....we hope. :)
 
Etowah
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