How to Start an Auto Repair Shop (9 Step Guide)

Benjamin Johnson

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June 24, 2024

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Read time: 3 min

Starting a mechanic shop is one of the most rewarding moves you can make in your career. The auto repair industry continues to grow, and whether you're a seasoned veteran or a newcomer with a solid vision, opening an automotive repair shop can lead to a thriving small business with long-term success. But like any worthwhile venture, it all begins with a solid plan and a deep understanding of what it takes to turn your technical skills into a profitable auto repair business.

In this guide, we'll walk you through the key steps and considerations for launching your own auto mechanic shop, from writing a business plan to hiring your first technician. Whether you're dreaming of a full-service car repair shop, a mobile mechanic business, or a specialty shop, these tips will help you lay a strong foundation.

1. Form a business plan

Every great mechanic business starts with a solid business plan. This is your roadmap—your blueprint for success. A comprehensive auto repair shop business plan should detail everything from your services (like oil changes, diagnostics, or engine rebuilds) to your target market, competition analysis, pricing strategies, and long-term growth goals.

There are nine steps to creating an automotive repair shop business plan that will help you achieve your business goals—from owning one auto repair shop to becoming a multi-shop owner.  

  1. Write an executive summary
  2. Describe your shop
  3. State your business goals
  4. Describe your products and services
  5. Do your market research
  6. Outline your marketing and sales plan
  7. Perform a business financial analysis
  8. Make financial projections
  9. Create a plan for growth and expansion

Your business plan should also identify your niche: Will you cater to performance cars or offer quick turnaround auto repair services? The more specific your direction, the easier it’ll be to attract the right potential customers and stand out in a competitive market.

2. Legal entity setup

Once you have created your master business plan, you should start on your legal entity setup. Choosing the right business structure for your mechanic shop impacts everything from taxes to liability to how you pay yourself.

For most shop owners, a limited liability company (LLC) offers a smart balance of protection and flexibility. It separates your personal assets from your business liabilities, which is key in the event of lawsuits or debts.

That said, sole proprietorships and corporations also have their place. It’s wise to consult with a business attorney or accountant to understand which business structure best fits your goals and risk tolerance.

Once you’ve picked a structure, you’ll need to register your business name with the state and secure an Employer Identification Number (EIN) from the IRS.

3. Start up funding

Getting your mechanic shop off the ground isn’t cheap. Between diagnostic equipment, insurance coverage, car lifts, rent, and employee salaries, startup costs can quickly add up. Whether you’re building from scratch or taking over an existing auto repair shop, you’ll likely need some outside funding.

The Small Business Administration (SBA) is a great place to start. They offer affordable business loan options for entrepreneurs, particularly those opening a small business. You might also explore equipment financing, credit lines, or partnerships with investors.

When seeking funding, having a clear business plan will be essential. It shows lenders and backers you’re serious, prepared, and capable of making your auto repair business profitable.

4. Pick your location

Your car repair shop’s location can make or break your success. Look for high-visibility spots near residential areas, highways, or commercial districts. Proximity to dealerships can also bring in new customers.

But it’s not just about visibility. Make sure your space has the right zoning, sufficient square footage, and proper infrastructure—like garage bays, ventilation, and parking. Consider future expansion too. Is there room to add more lifts, services, or staff down the line?

5. Permits and licenses

No matter where you’re located, you’ll need to secure the proper business license and permits before you can open your doors. Requirements vary by city and state but often include:

  • A general business license
  • Zoning and occupancy permits
  • Environmental or hazardous waste disposal certifications
  • Auto repair facility permits

Depending on your services, you may need specific endorsements for emissions testing or safety inspections. And if you plan to sell tires or parts, a resale certificate might be required.

Check with your local municipality or state licensing board to make sure you're covered. Failing to secure the right documentation could shut your auto repair shop down before it gets started.

6. Business bank account

Once your shop is registered, it’s time to set up a dedicated business bank account. Mixing personal and business finances is a rookie mistake that creates accounting headaches and jeopardizes your liability protections.

With a business account, you can secure better interest rates, more credit, and other benefits. For example, with a dedicated business credit card, your shop can establish a credit history which can be useful when trying to raise more money in the future.

Choose a bank that understands small business needs and offers services like business credit cards, payroll integration, and mobile banking. Your business bank account will help you track revenue, manage expenses, and simplify tax season.

7. Business insurance

Insurance isn’t just a checkbox—it’s your safety net. At a minimum, your mechanic shop should carry general liability insurance, which protects you against accidents, injuries, and property damage.

But that’s just the beginning. Depending on your services, employees, and location, you may also need:

  • Garage keepers insurance
  • Workers’ comp
  • Tools and equipment coverage
  • Commercial property insurance

As your shop grows, your coverage will need adjusting. Consult with an insurance professional if you are unsure of how much coverage you need.

8. Hire employees

Your team is the engine of your auto repair business. Hiring the right technicians, service advisors, and administrative staff makes all the difference in customer satisfaction and shop efficiency.

Look for candidates with relevant certifications, strong work ethics, and a passion for cars. Whether you’re hiring entry-level techs to handle oil changes or master mechanics for complex diagnostics, make sure your crew reflects your shop’s standards and values.

Lastly, offer competitive pay and growth opportunities to help retain your workforce long-term.

9. Marketing your shop

Now that your auto repair shop is ready, you need a comprehensive marketing strategy to attract and retain new customers. A strong online presence helps shop owners build trust and establish authority. Start with the basics:

  • Create a website with services and hours, location, contact information and phone number
  • Google Business listing
  • Generate online reviews
  • Referral programs
  • Social media
  • Email campaigns
  • SEO
  • Paid advertising

Invest in local SEO so people searching “car repair near me” can find you easily. Flyers, banners, community sponsorships, and partnerships with local businesses can also help get your name out.

If you need help picking a business name, you can use our free auto repair shop name generator.

Final Thoughts

Starting a mechanic business is no small feat. But with the right mix of technical skills and grit, you can create a thriving, profitable auto repair shop that serves your community and provides a rewarding career path.

Remember, success comes from preparation. Whether you’re launching a mobile mechanic business, taking over an existing facility, or building your auto repair services from scratch, each step you take sets the tone for your shop’s future.

So roll up your sleeves, start laying the foundation, and get ready to turn your dream of owning a mechanic shop into reality.

FAQ

What do I need to start my own automotive repair shop?

Should a mechanic shop be an LLC?

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For every auto repair business, creating a clear and professional receipt isn’t just good practice—it’s essential. Whether you're working on a major vehicle repair or a routine oil change, a detailed receipt serves as a proof of payment for the customer and a legal record for your shop. It helps you maintain transparency, build trust, and protect both parties in case of disputes or warranty claims.

If you’re building your own auto repair invoice template or refining your existing process, this guide walks you through every element your auto repair receipt template should include. From contact information to labor costs, here’s what a comprehensive auto repair receipt looks like.

Auto repair shop receipt example template

We designed an auto repair shop receipt template for you to download and use in your shop. The template can be used for auto body repair shops, mobile mechanics, general repair shops, and tire shops.
Download the free template below and modify it as needed to utilize in your shop.

AUTO SHOP RECEIPT TEMPLATE DOWNLOAD

What Should Be Included in an auto repair shop receipt?

1. Shop contact information

The first thing on your receipt should be your auto repair shop’s full contact information. This builds credibility and ensures customers know how to reach you if follow-up is needed.

What to include:

  • Shop name
  • Address
  • Phone number
  • Email address
  • Website (if applicable)
  • Business logo for branding

A well-organized template with your logo and contact information at the top makes your documents look professional and trustworthy.

2. Customer Information

Next, capture the customer’s name and their contact information. This ensures the receipt is tied to the correct individual and helps with record-keeping for recurring car repair clients.

What to include:

  • Customer's name
  • Address
  • Phone number or email

This section ensures your auto repair business can easily identify who the repair services were for and reach them quickly if needed.

Tek-Tip: Wouldn’t it be great if there was an estimate building software that could do this for you? Tekmetric offers auto repair estimate software among other features.

3. Date of service and invoice number

Every mechanic receipt needs to include the date of service and a unique invoice number. This creates an accurate timeline and helps organize documents chronologically for tax reporting, audits, or warranty purposes.

What to include:

  • Date the service was completed
  • Unique invoice number
  • Optional: technician’s name or initials

4. Vehicle information

For any automotive service, tying the repair order to a specific vehicle is a must. This helps with real-time service tracking, vehicle history reporting, and future maintenance recommendations.

What to include:

  • Year, make, and model
  • Vehicle Identification Number (VIN)
  • License plate number
  • Mileage at the time of service

5. Description of services performed

This is the heart of the receipt. Clearly outline what repair work was done and what repair services were provided. The more detail, the better.

What to include:

  • Itemized list of services
  • Description of each job (e.g., “Brake pad replacement” or “Engine diagnostic”)
  • Associated labor costs for each service
  • Cost of parts

6. Parts and material breakdown

An itemized list of parts and materials used in the repair work is just as important as the labor section. This transparency helps avoid disputes and gives your customer clarity on what they’re paying for. Most auto repair shops don’t show the markup percentages on parts but you can if you want to maximize transparency.

What to include:

  • Part name and number
  • Quantity used
  • Cost per unit

7. Balance Due and Payment Summary

Now it’s time to outline the financials, from the subtotal to the total amount. This section should also include the total cost, taxes, discounts, and any payment options you accept.

What to include:

  • Subtotal (before tax)
  • Taxes (state/local)
  • Any discounts or promo codes
  • Total amount due
  • Payment methods accepted (e.g., cash, credit card, financing)
  • Amount paid and remaining balance
  • Due date for final payment, if applicable

Including this section with clear headings avoids confusion and can prevent billing issues down the line. It also ensures the receipt can function as proof of payment. Lastly, this is a great place to feature your financing options (if applicable).

8. Warranty Information

Warranty details protect both your shop and your customer in case a part fails or a job needs to be redone. If your auto repair shop offers any warranty, you need to clearly list what’s covered and for how long.

What to include:

  • Warranty length (e.g., 12 months or 12,000 miles)
  • What is and isn’t covered
  • Instructions for claiming the warranty
  • Any third-party coverage (for example, if a part manufacturer offers a separate warranty)

This section should be written in clear, non-technical language to help customers fully understand their protections. You may want to include a signature line for the customer to acknowledge receipt of the warranty.

9. Streamline receipts

Creating receipts and invoices by hand can be tedious but Tekmetric streamlines that for you. Tekmetric can help you build faster estimates and take payments digitally with our auto repair estimate software.

Some of our features include:

  • Streamlined estimate building
  • Digital approvals
  • Job history and reporting in one place
  • Financing options for customers

Final Thoughts

A well-documented auto repair receipt protects your shop, helps your customer feel confident, and sets the tone for a long-term relationship. From capturing accurate customer information to detailing every repair service, your mechanic receipt should leave nothing to guesswork.

Don’t just think of it as paperwork—think of it as part of your shop’s customer experience. With a little extra attention to your receipt process, your auto repair shop can stand out as a professional, transparent, and customer-first automotive service provider.

Free Auto Repair Receipt Template & What You Need To Include

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In the ever-evolving automotive industry, staying ahead of the curve means constantly learning and growing. For automotive service technicians, certifications aren’t just credentials—they’re powerful tools that open doors to better job opportunities, increased pay, and credibility with customers and employers alike.

Whether you're just starting out or already working in auto repair, understanding the most common types of mechanic certification can help you create a successful, long-lasting career. This guide will break down the most recognized certifications, how to attain them, and why they matter for every auto mechanic who wants to stand out.

Image showing the various type of mechanic certifications.

Types of mechanic certifications

Mechanic certifications come in many forms, each tailored to different specializations and career goals. The most common types include:

1. ASE Certifications

Issued by the National Institute for Automotive Service Excellence (ASE), these certifications are the gold standard for automotive mechanics. They cover a wide range of specialties, from engine repair to electronic systems and air conditioning.

ASE certification is considered the most prestigious and widely accepted credential in the automotive world.

More about ASE

Founded in 1972, the National Institute for Automotive Service Excellence sets the benchmark for automotive service technicians. ASE offers over 50 different certification tests in categories like:

  • Engine Repair
  • Brake Systems
  • Air Conditioning and Heating
  • Suspension and Steering
  • Electrical/Electronic Systems
  • Engine Performance
  • Manual and Automatic Transmission/Transaxle
  • Light Truck and Diesel Engines

Master technicians

There’s also a separate path for master technician status, which is achieved by passing all certifications in the required testing areas for that series. For example, technicians certified in tests A1 through A8 are Master automobile technicians.

Master technician status is not for life. You must keep each one of those certifications current to maintain master technician status. If you lose master technician status due to the lapse of one or more required certifications, it can be reinstated by taking and passing the recertification tests.

How long does it take to become ASE certified?

To become ASE certified, expect to spend anywhere from 1–3 years, depending on your work experience and whether you’re currently enrolled in training programs. Each certification test typically takes 1 to 2 hours to complete and can be scheduled at a local test center.

Being ASE certified shows you’ve mastered the skills needed for the job. It’s a badge of excellence recognized by employers, repair shops, and even customers looking for reliable service.

2. Student certifications

Geared toward high school and post-secondary students in automotive technology programs, these ASE certifications offer a head start in proving foundational knowledge.

What are student certifications?

Student certifications validate entry-level knowledge in core areas of vehicle repair and maintenance. These don’t require work experience and serve as a stepping stone to full ASE status.

Programs approved by the ASE Education Foundation often include student certification exams as part of their curriculum. These are excellent options for students at auto mechanic schools or in a community college training program.

Student certifications are valid for two years and help you build confidence before entering the workforce as an entry-level technician.

3. Manufacturer certifications

These certifications are specific to vehicle manufacturers and offered by companies like Ford, Toyota, GM, and others. Often, auto technicians working in dealerships will pursue these to show mastery of brand-specific systems.

For repair technicians who want to specialize in a particular brand, manufacturer certifications are essential.

Manufacturer training programs

  • Toyota T-TEN
  • Ford ASSET
  • GM ASEP
  • Honda PACT
  • BMW STEP

These accredited programs often partner with dealerships to offer real-world, hands-on experience while you earn your credential. These programs can take anywhere from 12 to 24 months and typically require completion of automotive technology coursework alongside on-the-job work experience at a brand-affiliated repair center.

Why they matter

Manufacturer-certified auto technicians often have a faster path to high-paying roles within dealership networks and brand-specific repair shops. These certifications also prepare you to service increasingly complex vehicle systems, especially as brands continue to innovate with hybrid and electric vehicles.

4. Specialty certifications

You’ll also find credentials related to diesel engines, heavy truck systems, collision repair, and even hybrid/electric vehicles.

Each of these certification types plays a unique role in an automotive technician’s career path, and in many cases, earning more than one will make you significantly more marketable in repair shops and beyond.

Depending on your interests, you may also want to pursue:

  • A/C Refrigerant Certification - Necessary if you want to be able to to buy refrigerant and work on air conditioning service.
  • Diesel Mechanics Certification – Focused on diesel engines used in commercial fleets and heavy truck applications.
  • Collision Repair Certification – Great for auto mechanics looking to work in body shops.
  • Hybrid/Electric Vehicle Certification – A growing field with high demand.

Each of these certifications typically requires completion of a specialized training course and a passing score on certification exams. These programs may be part of a broader certificate program or offered as a standalone credential.

Tek-Tip: Another way to get ahead as a young technician is to be experienced with auto repair shop software so your employer doesn't have to teach you how to use their system.

Benefits of mechanic certifications

Getting certified is one of the most direct ways to turn your hands-on experience into a long-term career asset. Mechanic certifications do more than look good on a resume—they deliver real-world advantages. Here are some of the benefits of completing automotive certifications:

  • Increased Pay: Certified mechanics typically earn higher wages. According to the Bureau of Labor Statistics (BLS), certified automotive mechanics can earn higher hourly rates, especially in competitive markets.
  • Job Security: The more certifications you have, the more valuable you are to auto repair businesses.
  • Professional Credibility: Certification demonstrates a commitment to quality and standards, building trust with customers and employers.
  • Career Advancement: Certified automotive service technicians are more likely to advance to roles such as shop foreman, master technician, or service manager.
  • Mobility: Certifications make it easier to move between different types of employers—whether that’s independent repair shops, starting a mobile mechanic business, dealerships, or specialty service centers.

What does the certification process look like?

Most mechanic certifications follow a similar pathway but always refer to the specific instructions for your program.

Step 1: Enroll

Start by enrolling in an automotive technology program. These are offered by community colleges, trade schools, and accredited auto mechanic schools. Many programs are supported by the ASE Education Foundation, ensuring alignment with real-world industry standards.

Look for certificate programs or associate degrees that offer hands-on training. Financial aid is often available for eligible students.

Step 2: Gain work experience

Work experience is critical for most certifications. For ASE certification, for example, you need at least two years of on-the-job experience—or one year plus a diploma from an accredited program. You’ll need to show that you’ve worked on everything from brake systems and axles to manual drive train repairs and electrical systems.

Step 3: Pass certification tests

Most mechanic certifications require passing written or computer-based certification exams. These are typically held at a certified test center. The exams cover a variety of topics depending on the specialty, including engine performance, electronic systems, and automatic transmission repair.

Tek-Tip: Some auto shops/employers will pay your test fees for you.

Step 4: Maintain certification

Many certifications require recertification every five years. Staying current ensures you’re up to date with the latest automotive repair techniques, tools, and systems.

Final thoughts

Becoming a certified mechanic takes dedication, but the payoff is worth it. From better job prospects to increased credibility, mechanic certifications help you build a successful, respected career in automotive repair.

Invest in your future. Get trained, get certified, and become a leader in the ever-growing world of automotive repair.

Automotive Mechanic Certifications: The Complete Guide

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Mechanic interviews are challenging for both the employer and candidate because the right candidate has to be a fit in personality and technical ability. Plus, the numerous certification types, manufacturer nuances, and shop needs make it even more challenging.

This guide can be used to help repair shops/dealerships ask the right questions and also help technicians be prepared for questions they will likely encounter. Below you will find the most common car mechanic interview questions broken down by mechanic and service advisor level plus tips to ace your next interview.

Top mechanic job interview questions

While every auto repair shop differs in how they run their job interview process, these are some of the most common questions you can expect. Ranging from technical questions to customer service, be prepared to answer these common questions before your next interview.

An image highlighting the top job interview questions for mechanics.

General interview questions for car mechanics

These common questions cover basic automotive repair experience and relevant work history.

  • Tell me about yourself and your experience as an automotive technician.
  • Why do you want to work for our company/shop?
  • How do you stay up to date with new automotive technologies and repair techniques?
  • What certifications do you currently hold (ASE, manufacturer-specific, etc.)?
  • Are you comfortable working weekends, evenings, or overtime if needed?

Technical interview questions for mechanics

These technical interview questions cover more specific hand-on experience and tools/equipment.

  • Which repairs are you best at?
  • How much would you estimate your tool inventory to be worth?
  • What steps do you take when diagnosing a check engine light?
  • What tools and diagnostic equipment are you most familiar with?
  • Have you worked with hybrid or electric vehicles?
  • Do you believe in factory recommended vehicle maintenance intervals?
  • How comfortable are you with OEM scan/diagnostic tools?

Experience & situational questions for mechanics

These questions help employers understand how you would handle various shop situations and also helps them understand your communication skills.

  • Can you describe a time when you had to work under a tight deadline?
  • How do you deal with angry customers?
  • How do you prioritize tasks when you have multiple vehicles to work on?
  • What would you do if you made a mistake on a repair? How do you handle accountability?
  • What do you do if you encounter a vehicle with an issue you've never seen before?

Additional questions to expect

  • Are you comfortable serving those in need once a month?
  • Are you comfortable doing a DVI on the majority of vehicles you touch?
  • How do you handle a high-pressure environment when the shop is busy?
  • How do you handle a situation where you're unsure about how to fix a problem?
  • Tell me about a time you went above and beyond for a customer?

Top interview questions for service advisors

While the interview questions for service advisors will be similar to mechanics, there will be small differences. Typically, service advisors will be more customer facing and shops will tailor their questions to focus more on customer service and communication style.

General interview questions for service advisors

  • Are you comfortable selling repair services?
  • Are you comfortable working on a commission based salary structure?
  • Who do you believe has the best after market products?
  • Which shop management software is your favorite?
  • How do you deal with a customer saying that you are more expensive than their last shop?
  • How do you win back angry customers?
  • How do you handle over the phone quotes?

Technical interview questions for service advisors

  • What are your greatest strengths as a service advisor?
  • Who do you trust for moving electrical parts?
  • How do you handle working in a fast-paced environment?
  • Are you comfortable meeting sales goals and upselling services?
  • How do you stay up to date with new automotive technology and service trends?
  • How do you handle stress during busy hours?

Experience & situational questions for service advisors

  • How do you explain complex vehicle repairs to a customer who doesn’t understand cars?
  • What steps do you take to build trust with customers?
  • Have you ever had to deal with a miscommunication between a technician and a customer? How did you resolve it?
  • Can you describe a time when you turned a dissatisfied customer into a repeat customer?
  • How do you handle multiple customers needing assistance at the same time?

Additional questions to expect

  • How do you explain the importance of routine maintenance to a customer?
  • What experience do you have with automotive service software or point-of-sale systems?
  • How do you prioritize repair orders and schedule work efficiently?
  • How do you explain repair estimates to customers?
  • How would you respond to 1-star reviews?

Job interview tips for mechanics

  • Research: Not all shops are created equal so make sure to research before applying to make sure they are a good fit. You can also look at online reviews to see what their customers are saying.
  • Preparation: Use the commonly used questions above to help you prepare for the interview. Practice how you would answer each question and ways you can present yourself well.
  • Attire: You have 7 seconds to make your first impression and attire is a big part of that. Dress to showcase your professionalism and experience.
  • Highlight your experience/certifications: Showcasing your certifications and experience can go a long way to in making sure you land the job.
  • Ask thoughtful questions: Some interviewers will allow you to ask questions during the conversation. Make sure you have a few questions to ask that help you learn more about the shop.
  • Follow up: if you haven’t heard back from the shop and you are still interested, give them a call and remind them of your interest in the position.

Final thoughts

Interviews are challenging in any industry but mechanic interviews can be even more challenging with the shortage of talent available. This guide will help you either prepare for your next interview or provide you with common questions to ask your next hire. Lastly, always hire for culture fit and talent second. Culture problems are a lot harder to correct than technical car knowledge.

Top Interview Questions for Automotive Mechanics

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