What equipment do I need to open a tire shop?

At minimum, you need a commercial tire changer ($2,000-$12,000), a wheel balancer ($1,500-$10,000), at least one hydraulic lift ($2,500-$6,000), and a commercial air compressor ($800-$8,000). These four pieces of equipment let you mount, balance, and install tires on any passenger vehicle. A four-post alignment machine ($8,000-$35,000) is a high-margin add-on that most successful shops eventually install — alignment service generates $80-$150 per job with strong repeat business. Budget for hand tools like torque wrenches, tire pressure gauges, TPMS programming tools, and bead seating equipment as well.

How do I handle scrap tire disposal and environmental compliance?

Scrap tires are regulated waste in every U.S. state, and illegal dumping carries fines of $10,000 or more per violation. You must register as a tire generator with your state environmental agency and use licensed haulers for pickup and disposal. Haulers charge $1-$3 per tire, which means a shop generating 200-500 scrap tires per month spends $300-$1,200 on disposal alone. Most states allow you to charge customers a tire recycling or disposal fee ($2-$5 per tire) to offset this cost. You also need proper outdoor storage — many states limit the number of scrap tires you can accumulate on-site before triggering additional permitting requirements.

Is a tire shop profitable, and what margins can I expect?

Tire shops operate on wholesale margins of 25-40% on standard passenger tires and 30-50% on performance, specialty, and commercial tires. However, the real profit centers are labor and ancillary services: tire mounting and balancing ($20-$30 per tire in labor), alignments ($80-$150 per job), tire rotations ($25-$50), flat repairs ($25-$45), and TPMS service ($40-$80). A well-run shop doing 30-50 tire installations per day can generate $500,000-$1,200,000 in annual revenue with net margins of 10-18% after all expenses. Seasonal peaks during winter and spring tire changeover periods can represent 30-40% of annual revenue.

Should I buy a tire shop franchise or start independently?

Franchises like Tire Rack Installer, Big O Tires, and Midas provide brand recognition, established vendor relationships, and operational playbooks, but charge franchise fees of $25,000-$50,000 plus ongoing royalties of 3-8% of gross revenue. Independent shops keep 100% of their margins and have full control over pricing, inventory, and branding. The trade-off is that independents must build supplier relationships, brand awareness, and operational systems from scratch. For most first-time owners with industry experience, starting independently and joining a buying group like Tire Pros or National Tire Wholesale provides the best balance of wholesale pricing and brand support without franchise royalties.

What insurance does a tire shop need and how much does it cost?

The most critical policy is garage keepers liability, which covers damage to customer vehicles while in your care — a tire that comes off after installation or a vehicle that falls from a lift can result in $20,000-$60,000 in claims. You also need general liability ($800-$4,500/year), property insurance covering your equipment and inventory ($800-$6,000/year), and workers compensation once you hire employees ($1,500-$9,000/year depending on payroll size and state). A complete insurance package for a small to mid-size tire shop typically runs $4,300-$25,500 annually. Many commercial landlords require proof of general liability and garage keepers coverage before you can sign a lease.

Home / Tire Shop Startup Costs

How Much Does It Cost to Start a Tire Shop?

Q: How much does it cost to start a tire shop?

Startup costs range from roughly $30,000 for a mobile tire service operating out of a van to $250,000 or more for a full-service tire center with alignment equipment, multiple bays, and deep inventory. The median first-year investment for a small retail tire shop with two bays, one tire changer, one balancer, and a starter inventory of 200 tires is approximately $80,000-$120,000. The three biggest cost variables are lease and buildout ($7,000-$109,000), equipment ($6,800-$95,000), and initial tire inventory ($3,500-$68,000).

$30,000 – $250,000

A mobile tire service can launch for around $30,000, while a full-service tire center with alignment racks, multiple bays, and deep inventory can cost $250,000 or more. The biggest cost drivers are how many service bays you build out, the depth of your initial tire inventory, and whether you invest in a four-post alignment machine. Below is a full breakdown of every startup cost — from tire changers and wheel balancers to environmental permits, garage keeper insurance, and monthly waste disposal.

Last updated Feb 2026 · Based on Tire Industry Association (TIA) dealer startup guides and benchmarks (2025), IBISWorld: Tire Dealers in the US, industry report (2025), Modern Tire Dealer magazine annual industry survey and fact book (2025)

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Where This Data Comes From

Tire Industry Association (TIA) dealer startup guides and benchmarks (2025)
IBISWorld: Tire Dealers in the US, industry report (2025)
Modern Tire Dealer magazine annual industry survey and fact book (2025)
SBA 7(a) loan portfolio data for automotive retail and services (2024)
U.S. Bureau of Labor Statistics, Tire Repairers and Changers occupational data

All figures are estimates based on publicly available data and industry benchmarks. Actual costs vary by location, timing, and business decisions.

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Auto Detailing

$3K – $30K

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Auto Repair Shop

$30K – $250K

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