How to Start a Car Restoration Business in 14 Steps (In-Depth Guide)

Updated: March 22, 2024 is reader-supported. When you buy through links on my site, we may earn an affiliate commission. Learn more

Classic car restoration is big business, with the global automotive restoration industry reaching $5.5 billion in 2022. The market continues to grow at a projected compound annual growth rate )CAGR) of 11.2% from 2022 to 2030.


As the number of antique, vintage, and classic vehicles continues to grow, so does the need for quality restoration services to keep them looking and running their best. Many classic car owners are more than willing to pay top dollar to have their vehicles expertly restored.

This guide will walk you through how to start a car restoration business. Topics include building a business plan through thorough market research, registering an EIN, obtaining business insurance, forming a legal business entity, marketing, and more.

1. Conduct Car Restoration Market Research

Market research is essential when starting a successful car restoration business. It offers insight into auto restoration shop trends, your target market, and local competitors. Market research also helps newcomers to the market learn more about classic car enthusiasts and develop a thorough business plan.

Some details you’ll learn through market research on complete restoration businesses include:

  • While the overall automotive repair industry is highly fragmented with over 156,000 businesses nationally, the niche of antique car restoration is far less saturated.
  • Less than 3% of automotive shops specialize in classics and vintage vehicles, presenting major expansion opportunities.
  • Areas like Seattle, Denver, and San Francisco have both high incomes and a growing population of collector car owners.
  • Positioning yourself as a niche restoration expert in European, American, or Asian vintage cars can further differentiate your business in this specialized industry.
  • Developing unique technical capabilities and certifications is another avenue for commanding premium pricing and client retention.

Conducting detailed market research on restoration work is key before diving into this capital-intensive industry. But with a passion for vintage vehicles and proper planning around target markets, capabilities, and shop location, the road ahead looks promising for aspiring automotive restoration entrepreneurs.

2. Analyze the Competition

Vintage car restoration is a niche industry, but new entrepreneurs still need to assess their local competitive landscape. Start by identifying shops within a 20-mile radius, and searching business directories and online maps.

Evaluate competitors’ websites and social media presence for services offered, years in business, sample project galleries, and customer reviews. Pay attention to the volume and quality of their online presence – a strong social following and positive reviews are good indicators of customer satisfaction.

Conduct on-site visits to inspect their facilities first-hand. How professional is the shop aesthetic? What equipment, bays, and parts inventory is visible? Speaking with the owner can reveal an insider perspective. Take notes on strengths and weaknesses to inform your service offerings.

Research service specialization like European classics or muscle cars. Track website traffic estimates through SimilarWeb and organic search traffic rankings with SEMRush. Monitoring sites like Yelp reveals real customer experiences.

Be sure to also assess national leaders like Speedy Auto Service highlighting their unique value propositions. How could elements like luxury showrooms, concierge services, or online parts stores set your restoration business apart?

Ongoing competitive analysis fuels continuous improvement once up and running too. Sign up for competitors’ e-newsletters and monitor the trade press to continually fine-tune and differentiate your vintage restoration services.

3. Costs to Start a Car Restoration Business

Starting a business venture in the automotive industry requires some financial investment. Both startup and ongoing costs are required to build a successful business strategy. Some of the costs you’ll encounter include:

Startup Costs

Properly setting up a car restoration shop takes significant capital investment, with costs quickly tallying depending on the services offered.

  • Shop Real Estate – Leasing at a minimum of 2,500 sq ft of industrial warehouse space averages $4-$8 per sq ft monthly, translating to $12,000-$24,000 per year according to Loopnet data. Purchasing property requires $200,000+.
  • Renovations & Build Out – After securing real estate, expect to invest $50,000-$150,000 in the shop buildout itself – everything from floor coating, lighting, ventilation, fire suppression systems, air compressors, equipment mounts, and custom welded work benches.
  • Core Restoration Equipment – From pullers, hydraulic lifts, and brake lathes to plasma cutters, MIG welders, and metal shaping tools, properly equipping a shop will run $80,000-$120,000+. Plus specialty tools for tasks like cylinder head servicing or fabricating custom metal panels.
  • Specialized Tools & Equipment – Stock $20,000+ worth of essential hand/power tools like impact guns, buffers, sanders, spray guns, drill presses, etc. Specialty repair equipment like a chassis dynamometer or advanced computer diagnostic systems can quickly add $30,000+.
  • Parts Inventory – Whether fabricating in-house or sourcing from vendors, expect to stock at least $15,000-$25,000 in fast-moving restoration parts from hardware and sheet metal to engine components and tires. Limited runs of patterns, fabric, vinyl, and other specialty media should be $5,000+.
  • Office Equipment – Outfitting your office with furnishings, computer workstations, phones/internet, security system, and point of sale system tallies around $15,000.
  • Licensing, Insurance & Permits – Finalizing your business licensing, commercial auto/garage liability policies, and permitting fees with the city will total $3,000-$5,000. Custom shop signage is also $3,000+.

Ongoing Costs

Regular operating expenses quickly add up in the car restoration business:

  • Assuming 2-3 restorers plus a front office associate and office manager, staff payroll tallies $110,000+ annually.
  • Shop lease payments hit $12,000-$24,000 yearly.
  • With extensive parts sourcing and hardware/media supplies, the average inventory and materials cost per full restoration project is $15,000-$30,000+, significantly varying by car make/model.
  • Between machinery/equipment maintenance and general shop upkeep, facilities and maintenance fees reach ~$25,000 per year.
  • Insurance, licensing renewals, and standard utilities like electricity and waste removal tally ~$15,000 annually.
  • Marketing costs like website hosting, search engine, and social ads spend an average of $8,000 per year or more to generate customer leads.

Proper planning around these fixed and variable operating expenses is imperative for sustaining profitability in the capital and labor-intensive vintage car restoration business.

4. Form a Legal Business Entity

When starting an auto restoration business, the legal structure you choose impacts everything from personal liability to taxes owed. Weigh these options carefully:

Sole Proprietorship

A sole proprietorship is the simplest as you operate under your name without formal registration. However, you assume all liability for debts and legal actions personally. Income passes directly to you to report on personal tax returns as well. While easy to set up, risks are higher.


A general partnership shares ownership and management between 2+ people. You divide profits and share control per your agreement without needing to formally register the business. It also means unlimited, personal liability, if your partner makes poor decisions like taking on debt, you’re both financially on the hook.

Limited Liability Company (LLC)

An LLC or limited liability company provides personal asset protection while allowing pass-through income tax treatment like a partnership. Owners aren’t personally responsible for business debts and liabilities. Only the LLC assets are impacted. Gives flexibility to a number of owners and buy-sell control rules.


A corporation establishes the business as a separate legal entity from the owners entirely. Requires significant formal registration and strict record keeping. Owners are only liable up to their investment in company stock. Given regulations and double taxation of income, likely excessive structure for most restoration shops compared to an LLC.

5. Register Your Business For Taxes

Before accepting any payments, your vintage car restoration LLC must be registered for federal and state taxes via an EIN.

An Employer Identification Number (EIN) serves as the business’s equivalent to a social security number establishing a unique ID for filing taxes and employing workers. Acquire your EIN directly from the IRS at in just minutes:

  • Access the EIN Assistant and select ‘View Additional Types’ including LLC under Limited Liability Companies.
  • Work through the online questions including responsible party, LLC ownership structure, and foreign investments if any.
  • Receive immediate EIN assignment once the short application is submitted. Print a confirmation letter containing the EIN for business records.

This EIN now links to your business tax accounts reporting revenue, deducting expenses, depreciating assets, and paying quarterly estimated taxes.

Contact your state revenue department to register for applicable sales tax collection based on the services provided. For example, California requires registration within 15 business days under select NAICS codes covering auto repair and restoration.

Filing for sales permits helps legitimize your new shop in the client’s eyes. It also streamlines tracking depreciable purchases made where you were charged sales tax initially.

6. Setup Your Accounting

Meticulous financial record keeping is crucial in the vintage car restoration business given the high costs of parts, materials, and labor on every unique project. There are many forms of accounting help to invest in as you start your business, including:

Accounting Software

QuickBooks handles all your bookkeeping needs, generating invoices, tracking payables/receivables, financial reporting, tax-ready documents, and managing payroll. Dashboards give real-time insight into profit margins across projects. Built-in templates are tailored specifically for auto repair shops, sparing tedious setups.

Hire an Accountant

Partnering with an accounting firm protects you during tax season and during key business milestones. Full-service bookkeepers offer specialized small business accounting including:

  • Monthly reconciliation of bank/CC statements with QB data
  • Payroll/Sales tax filings
  • Adjusting books with inventory/job costing
  • Optimizing cash flow analysis
  • Compiling financial statements
  • Sales tax optimization

Come year-end, your accountant handles completing complex depreciation schedules for all those key shop asset additions and navigating QB data import into tax returns to minimize liability. Expect to invest $200 per month plus $1000+ for annual tax prep.

Open a Business Bank Account and Credit Card

To successfully navigate your business finances, the IRS recommends separating personal and professional finances. Opening a business bank account and credit card for business purchases keeps you accountable and makes it easier to organize tax filings.

7. Obtain Licenses and Permits

Before opening the garage bay doors, your restoration shop must comply with federal, state, and local licensing regulations. Find federal license information through the U.S. Small Business Administration. The SBA also offers a local search tool for state and city requirements.

At a minimum, acquire your state’s auto repair shop registration proving certified technicians on staff. In California for example, the Bureau of Automotive Repair issues registration for facilities. Registration involves facility inspection, $200 initial fee, and $100 annual renewals.

Specialized smog check licensing is another consideration in states requiring emissions testing prior to vehicle registration. Contact agencies like California’s BAR or NY DMV to understand requirements like technician certification, equipment standards, and ongoing training if offering these profitable services.

Occupancy permits from city or county building departments validate your commercial space meets zoning, safety, and accessibility codes. Jurisdictions like LA County may also require additional plan check approvals and permits related to signage, electrical, plumbing, or mechanical systems.

Environmental agencies monitor issues like hazardous waste disposal from chemicals, paint booth emissions, and sanitation compliance. For example, Hennepin County’s hazardous materials licenses ensure proper handling while their hygienic standards govern sink basins, restrooms, and drainage.

If performing any custom metal fabrication like restoring chassis, door skins, or engine parts, also consider site-specific air quality permits regulating the use of MIG welders, grinding/sanding stations, and metal finishing chemical tanks.

8. Get Business Insurance

Restoring classic cars always carries an element of unpredictability, from receiving vehicles in unknown internal conditions to the intricacies of custom fabrication. Carrying adequate garage insurance defends your new business against unforeseen disasters.

Policies like those from The Hartford shield your company’s assets and personal finances should vulnerable situations arise like:

  • Employee error during disassembly permanently damages a rare engine component. The owner sues for the $50,000 to replace and devaluation.
  • An electrical fire sparked by outdated wiring destroys half your shop and the 4 vehicles inside causing $500,000 in damages.
  • Brake failure while test driving a repaired classic Corvette after servicing leads to a multi-car accident injuring others.

Claims against your garage’s liability or property damage have bankruptcy potential without insurance buffers that also facilitate rebuilding.

Protect yourself by bundling these essential policies:

  • General Liability – Covers 3rd party bodily injury, property damage, personal injury, and advertising injury claims. Limits often $1-$5 million.
  • Auto / Garagekeepers Liability – This applies when customers’ vehicles are damaged while being moved or stored on the premises.
  • Umbrella – Additional liability limits protecting business assets from lawsuits.
  • Commercial Property- Repair/replacement coverage for business property damaged by covered causes like fire, theft, and vandalism.
  • Workers Compensation- Mandatory in most states covering medical and partial income costs of employees injured on the job.

Reaching out to specialty brokers saves money by packaging niche policies meeting your custom restoration shop’s unique needs versus general contractors. Expect costs between $150-$300 monthly for ample protection to make scary worst-case scenarios less daunting.

9. Create an Office Space

An office area allows client consultations, paperwork, and phone calls without interrupting shop work.


Options balancing convenience, professionalism, and affordability include:

Home Office

A home office works for sole proprietors just starting. Use a spare bedroom or basement space for an office/computer area and storage. Meet clients at their location or in public spaces. Minimal financial outlay but appears less established.

Coworking Office

For about $300 per month, a coworking space like WeWork provides a business address, desk space, conference rooms, phone booths, internet, and printing/copying. Great for meeting clientele away from the shop in a modern environment conducive to paperwork. No lease commitment.

Retail Office

A storefront office offers the most visibility – clients can drop vehicles at the same location as your restoration shop. Invest $2,000 per month for 1,000 sq ft including furnishings in a high-traffic area to capture walk-in business too. Managing both spaces splits focus.

10. Source Your Equipment

A restoration shop needs heavy machinery for metal shaping, welding, and painting plus hand tools, lifts, and specialty gear. Evaluate new, used, and rental options:

Buying New

Buying new enables customizing your dream setup but carries premium pricing, quickly totaling $100k+ for all necessities. Invest in durable top brands like SnapOn or Hunter that hold value should you later resell. Use equipment financing from suppliers like Home Depot or banks to ease the cash flow strain of large one-time purchases.

Used Equipment

Auction sites like IronPlanet and GovPlanet offer 30-50% savings off retail. Search locally on Facebook Marketplace and Craigslist for deals as well. Closely inspect condition prior, noting hours used for big machinery, which may require near-term replacement parts like brake system rebuild kits adding costs later.


Renting assets like plasma cutters, mag drills, tubing benders, and English wheels costs $100 daily but avoids huge upfront costs. Useful for occasional specialty projects without enough volume to justify buying outright. Loss/damage waivers protect your budget. Rental centers allow trying before buying to assess necessity long term.


For versatile gear like lifts, research leasing options that let you steadily upgrade equipment like QuickJack portable scissor lifts while building business credit. Canceled anytime with 30-day notice terms like 36 months cost reasonable monthly payments while leaving working capital free for parts and shop expansion needs versus debt.

11. Establish Your Brand Assets

Crafting a recognizable identity attracts the clientele willing to pay premium rates for show-quality restorations. Define logo, contact info, web presence, and signage conveying your shop’s specialized expertise and service caliber.

Get a Business Phone Number

A memorable business phone number via RingCentral offers customizable recorded greetings and extensions so customers easily connect with sales or technicians. Online fax/SMS capabilities and toll-free options project professionalism.

Design a Logo

Your shop logo and brand assets like letterhead, uniforms, and bay signage should share cohesive colors and fonts, known as a visual identity system. A classic logo from Looka with vintage iconography and strong typography brands your niche.

Print Business Cards

Business cards from Vistaprint provide sales staff professional collateral to exchange at events with prospects used to close deals later. Custom signage adds credibility on-site.

Buy a Domain Name

Secure the perfect domain name like ClassicCarRestoration using Namecheap for $15/year. Short, descriptive names build awareness and trust.

Design a Website

An information-rich website and portfolio convey capabilities. Use Wix drag-and-drop tools for easy self-service site creation at $23/month. Or hire a freelancer through Fiverr starting at $100.

12. Join Associations and Groups

Networking with other restorers shares valuable insider tips helping your shop save time and money. Join industry associations, attend trade events, and connect online.

Local Associations

Local associations like the Classic Car Restoration Club provide camaraderie through group rides while learning restoration techniques at tech sessions and swap meets. Regional clubs abound for marque-specific owners like Jaguar, so connect with your niche.

Local Meetups

Attend local meetups and trade shows found via sites like Meetup to discover new tools and materials from vendor booths while bonding over classic models on display. The $1000+ for premium parking inside events pays dividends in future business referrals.

Facebook Groups

Facebook groups like Classic Car Restoration! and Old Car Restoration offer Q&A from thousands nationwide. Learn paint codes, source NOS parts traders, and ask about fabrication challenges. Use search to uncover groups specific to your niche.

13. How to Market a Car Restoration Business

Effective marketing conveys your specialty services and craftsmanship so classic car owners seek out your shop over competitors or tackle projects themselves. Leverage digital platforms and word-of-mouth networks to drive conversions.

Referral Marketing

Satisfied clients referring their fellow collectors to secure reservations for a 2-year restoration waitlist is ideal. Entice brand loyalty with 5% discounts on multi-vehicle packages while requesting social media tags and online reviews after delivery to organically showcase your work.

Digital Marketing

Digital tactics effective at low costs with targeted reach include:

  • Google Ads campaigns geo-targeting regional enthusiasts searching terms like “Corvette restoration”
  • Facebook/Instagram ads showcasing before/after project photos sent to custom audiences who engage with niche auto brands
  • An educational YouTube channel or TikTok documenting full restorations from procurement to reveal event glamour shots
  • Guest blog posts on sites like Hagerty highlighting specialization services or parts fabrication techniques
  • SEO-optimized website content bringing organic search traffic for unique processes only your shop offers

Traditional Marketing

Traditional approaches still hold relevance for niche hobbyists reading specialty publications:

  • Classified listings in Hemmings Motor News and Sports Car Market emphasize your marque expertise
  • Flyers at Cars and Coffee events and Concours d’Elegance shows attended by your target demographic
  • Radio segments on local NPR affiliates resonate with educated, cultured collectors prizing fine automobiles
  • Direct mail postcards to households with registered classics in affluent ZIP codes nearby

Mixing digital discovery and physical outreach captures prospects however they best consume antique auto media. Relying solely on word-of-mouth referrals risks slow growth if existing customers remain satisfied with the current stable of vehicles. Seize every channel to convey mastery in restoring their beloved rides.

14. Focus on the Customer

Restoring sentimental vehicles is an emotional experience for clients. How you make them feel during this lengthy, expensive journey determines referrals and repeats.


Initiate the relationship by showing genuine passion for the models they bring rather than dollar signs. Send progress photos over the multi-year project, welcoming walkthrough shop tours. Celebrate milestones like sourcing that rare trim piece together.

When issues inevitably arise with custom fabrication or changes in scope, immediately consult owners to align on options rather than deciding unilaterally. The trust and rapport built via transparency preserves the partnership even if additional costs are involved.

With waiting lists stretching years out, new customer acquisition loses its urgency. Pouring effort into existing client relationships ensures your calendar stays filled as their show car friends take note and inquire about your availability for their classics.

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