Shifting dynamics in the evolving carwash market

Driving Forward: The growth and opportunities in the evolving carwash market

A review of the real estate and market trends and issues of this industry.

The carwash industry has experienced remarkable growth and transformation in recent years, driven by changing consumer preferences, technological advancements and increasing environmental concerns. The carwash market has become a lucrative sector in the dynamic CRE landscape, attracting investors and entrepreneurs nationwide. The demand for carwash services is anticipated to increase as the number of cars on the road increases, consumers experience rising disposable income and automobile owners use professional carwashing facilities more frequently.

Market performance

According to CoStar Group data and B+E research, the triple-net lease (NNN) carwash real estate market expanded in 2022, with over 245 leased properties changing hands for a total market value of more than $1 billion. The average sale price of an NNN carwash was $4,480,273, with deals trading at an average cap rate of 5.79%.

The carwash market continues to attract significant interest. In fact, several NNN carwash transactions were finalized in the final weeks of 2022, and the market continues to witness a steady influx of new supply.

B+E reported, as of Jan. 31, 2023, the total count of NNN carwash properties listed stood just below 90. These properties showcased an average lease term of 18.4 years, an average asking price of $5,198,165 and an average asking cap rate of 5.77%.

The carwash market is projected to reach $68.9 billion by 2031, expanding globally at a CAGR of 6.7% between 2023 and 2031. In 2021, the market was valued at $29.3 billion and in 2022, $38.4 billion. In the U.S., the carwash services market is expected to reach $27.89 billion by 2033, a CAGR of 5.5% between 2023 and 2033.1

Market dynamics

By region, North America contributed more than 51% of the revenue share in 2022. By type, the roll-over/in-bay segment generated more than 51% of revenue share in 2022. By mode of payment, the cashless payment segment is projected to record the biggest CAGR of 4.8% from 2023 to 2032.2

Overall, the industry is expected to keep expanding. In-bay or roll-over services have the largest market share and thus generate a majority of revenue for the sector. Additionally, since roll-over carwashes only use 10 to 50 gallons per car, according to industry estimates, they have a lower operating cost than other wash formats. Roll-over carwashes also have the capacity to be integrated into smaller spaces, with auto dealerships integrating them on-site.

Supply and demand for 2023

In 2023, a crucial question arises in the NNN carwash market: Will buyers be able to absorb the existing and upcoming supply of properties throughout the year?

Buyers now have a wider range of NNN options available to them. January 2023 indicated that the substantial inventory is unlikely to diminish anytime soon. However, NNN carwashes possess a distinct position within the broader real estate landscape, which positions them to perform exceptionally well despite market fluctuations.

With increasingly stringent environmental regulations prohibiting residential carwashing methods, the customer base for professional carwash services is projected to grow.

The U.S. Census Bureau notes that over the past decade, 70% of car owners in 2020 opted for carwash facilities instead of washing their cars at home. This indicates a significant shift in consumer behavior toward professional carwash services. Furthermore, estimates report that approximately 8 million vehicles utilize some form of carwash service every day.

Key factors influencing the market

According to Data Bridge Market Research, the industry is enacting several technological advancements that are revolutionizing on-demand vehicle wash services, such as advanced water recycling systems, hybrid and touch-free washing technology, and other economical innovations. These advancements aim to reduce manual vehicle preparation time and minimize friction, resulting in cleaner and drier vehicles in a shorter period.

The demands of busy schedules and fast-paced lifestyles have prompted customers to prefer professional carwashing services over personal carwashing methods. The convenience and time-saving aspect of automated carwashing have become the norm, contributing to the market’s growth.

As the market shifts due to rising interest rates and inflation, service-based businesses that offer non-necessity services, like carwashes, will need to find innovative ways to keep customers returning and increase their property values. With this in mind, most carwash facilities have moved into a more self-serve business model with drive-thru menus to help customers select their service without speaking to an employee.

Automation has proven to be an excellent way for carwashes to improve overall profitability while staying competitive and meeting the market’s and customers’ evolving needs.

Drivers, opportunities and restraints

There are several drivers, opportunities and restraints currently affecting the emerging professional carwash market.

The drivers include:

⊲ Increase in the number of on-road passenger and commercial vehicles
⊲ Rise in preference toward commercial carwash solutions
⊲ Growth in the adoption of digital, door-to-door and robotic carwash solutions.

The opportunities include a surge in demand for professional vehicle wash services across the globe.

And, the restraints include strict rules and regulations regarding water usage and wastewater management.

Prominent players

A few of the prominent players in the U.S. carwash services market currently, include:

⊲ ZIPS Car Wash
⊲ Take 5 Car Wash® (Driven Brands)
⊲ Quick Quack Car Wash
⊲ Autobell Car Wash
⊲ Wash Depot Holdings Inc.
⊲ Super Star Car Wash
⊲ Mister Car Wash

These players have adopted various strategies to increase their market penetration and strengthen their position in the industry. These players in the market are expanding their reach using acquisition to gain a foothold in the market, fostering industry expansion. By offering add-on services, coupled with the rapid rise in the number of vehicles, they expect significant growth potential.

Why invest in carwashes

The triple net lease carwash market continues to mature and expand. In 2022, more than 245 properties exchanged hands for a gross market value of more than $1 billion, according to CoStar Group. The average sale price of an NNN carwash was $4,480,273 and deals traded at an average cap rate of 5.79%. The key question in 2023 is whether buyers will absorb the current and future supply of properties as rising interest rates put a damper on market conditions.

Approximately 3.1 million square feet of carwash space is under construction across the U.S., according to CoStar Group. Carwashes occupy a unique space in the broader real estate universe, which positions them to outperform even in a shifting market.

Traditionally dominated by local operators, express carwashes are seeing more private equity investment, fueling growth and consolidation in the industry. With firms pivoting their interest in carwash companies that own express washes, also known as conveyor or tunnel washes, carwashes are expected to become more appealing as credit quality improves. Further, new business models offering memberships or subscriptions have created a predictable, steady revenue stream.

Since the carwash market remains highly fragmented, it is a key draw for many investors. The industry’s makeup, as well as its subscription-based sales systems, is keeping the market in investors’ spotlight.

Given how highly automated express carwashes have become, it’s very difficult to stand out in such a competitive market. Operators now focus on differentiating factors, such as finding the best locations, constructing eye-catching buildings and offering unique carwash experiences.

Lastly, the Tax Cuts and Jobs Act of 2017 made carwashes eligible for a more generous bonus depreciation deduction. Depreciation-motivated buyers are the most aggressive purchasers of NNN carwashes. Despite the decrease from 100% to 80% deduction in 2022, buyers are still targeting carwashes for tax purposes and capturing the deprecation. 


1 Transparency Market Research
2 Precedence Research

Matthews Real Estate Investment Services™, a commercial real estate investment services and technology firm, holds recognition as an industry leader in investment sales, leasing, and debt and structured finance. Matthews™ delivers superior results through the firm’s industry-revered work ethic, unique culture, collaboration and advanced technology. For more information, please visit

You May Also Like

Best of the best: Highlighting market leaders in the carwash industry

Recognizing excellence in the professional carwash market.

One of the best parts of my job is being able to tell the stories of people and companies making an impact in the industry. Over the past decade we have seen significant shifts in the market that have resulted in growth, opportunity and an increased awareness regarding the importance of car care. People aren’t just carwash customers anymore; many are now loyal members of our industry.

Leasing your real estate: What you need to know

How to properly structure your lease to optimize the financial benefits of leasing.

How to properly structure your lease to optimize the financial benefits of leasing.
9 carwash small business owner tips

How to succeed in the competitive professional carwashing industry.

Separating from the crowd

Use these strategies to thrive in saturated markets.

The ultimate Guide to Buying a Carwash

If you’re looking to get into the business, here’s what you need to know.

Other Posts

ZIPS celebrates 20 years with Folds of Honor partnership

PLANO, Texas — ZIPS Car Wash is giving scholarships to students sourced by the non-profit that helps families of fallen or injured soldiers.

ZIPS Car Wash celebrates over 40,000 teachers and nurses

PLANO, Texas — The honoring of teachers and nurses helped celebrate them for two national appreciation days.

ZIPS Car Wash celebrates over 40,000 teachers and nurses
Mister Car Wash announces first quarter 2024 financial results

TUCSON, Ariz. — The company reports it is finding ways to do more with less and managing its expense structure to deliver strong cash flow.

Car Wash Convos season 2 finale features Texas shot put star

AUSTIN, Texas — Texas shot putter Marilyn Nwora shares her love for baking, her favorite movie and more in the season 2 finale.

Marilyn Nwora