Buying a Tire Shop
Why Searchers Look at Tire Shops
Tires wear out on a schedule no economy changes, so replacement demand is steady and local, and the independents that serve it are abundant and often owned by operators near retirement. Single shops trade at low-end multiples, and the trade has a clean improvement thesis a searcher can actually run: add or deepen mechanical service. It is also visibly consolidating, with well-funded chains buying independent operators across the country, which means both a tailwind and an eventual exit for a shop built to their standard.
What Tire Shops Trade For
The publisher that tracks sold auto service and repair listings, a class whose scope names tire shops among its inclusions, puts half the trade between 1.70x and 3.26x SDE across 2021 to 2025. That comes with a 2.31x median, a 2.82x average, and a $410,000 median sale price, and revenue multiples running 0.35x to 0.78x. Where a shop sits in that spread is almost entirely about service: tire-only retail sits near the bottom, and shops where attached mechanical work supplies 40% or more of gross profit sit near the top. Multi-store groups get priced on EBITDA by the advisors who sell them, and no publisher of sold data prints an EBITDA multiple for this trade, so read a figure on that basis as an opinion rather than a comp.
Service Attach Is the Margin
The service story is real and smaller than it is sold as. The trade's own dealer study puts retail service at 49% gross margin and retail service parts at 47%, against 41% on wholesale tires and 40% on retail tires. Service earns more per dollar by about nine points, not by the thirty a sell-side pitch implies. What that changes is the thesis. Adding bays does not double a shop's margin, so the case for service is throughput and repeat visits rather than mix, and the diligence question is how many bay hours are already sold and what a second technician would actually fill.
Fleet, Inventory, and the Big Consolidators
Two balance-sheet realities shape a tire deal. Inventory is real money sitting on the floor, so inventory turns and dead stock belong in the working-capital peg, not glossed over. And fleet or commercial accounts, while lower-margin, stabilize demand and command a premium of roughly a half turn to a full turn when they recur. The consolidators (Sun Auto, Mavis, Percheron-backed Big Brand Tire) are buying exactly the operators that pair store count and management with real service revenue, a useful template for what to build toward and who might buy it. An independent dealer meets the federal recall rule by handing the buyer a form to mail; a company-owned group has to transmit the numbers itself every thirty days.
What to Verify in Diligence
Beyond earnings quality:
- Mechanical service share of gross profit, the single lever behind the multiple
- Inventory turns and dead stock, since aged tires tie up working capital
- Fleet and commercial account concentration and whether contracts transfer
- Alignment, brake, and diagnostic capacity, because service headroom is the growth thesis
- Labor and technician retention, the constraint on selling more service
- The lease and permitted use for a multi-bay service operation
- The count and age of the casings out back, since a shop over its state's storage cap is an unpermitted waste facility
Financeability Notes
Tire and service shops finance under SBA 7(a) when earnings are clean, and the lifts, alignment racks, and balancers offer a lender some collateral, though tire inventory is a softer asset that gets haircut. Underwriting will look at owner dependence and the durability of the service base, and any owned real estate brings the environmental question (waste tires, oil, solvents) into the loan file. Model debt service on normalized earnings with a service manager or lead technician standing in for whatever the seller did across the counter and the bays.
Terms in This Industry
National account work
Fleet and manufacturer program work billed at set prices a shop does not negotiate.
Service attach rate
The share of tire sales that also buy service, which is where the margin actually sits.
Alignment attach
The share of tire sales that also book an alignment, the most natural add-on there is.
Road hazard warranty
A replacement promise sold with the tire, which books revenue now and owes work later.
Scrap tire license
The permission to hold tires on site, which a retailer can lose by leaving them outdoors.
Tire program identification number
The waste-tire number the state assigns to a shop because it generates scrap tires.
Separately stated tire fee
The state tire fee that must sit on its own invoice line, apart from any fee the shop invented.
What the Data Says
The marketplace's auto service and repair class covers 1,286 businesses sold from 2021 through 2025, with tire shops named among its inclusions. Earnings multiples run 1.70x at the lower quartile, 2.31x median, 2.82x average and 3.26x upper quartile. Those sit on $819,431 median revenue, $182,133 median owner earnings and a $410,000 median sale price, with revenue multiples of 0.35x to 0.78x around a 0.50x median. These are class figures a tire-plus-service shop trades against, not a comp.
Source: BizBuySell auto service and repair benchmarks (sold listings, sector blend)
The trade press's own dealer study puts the gross margins in a narrow band: retail service at 49%, retail service parts at 47%, and wholesale and retail tire sales at 41% and 40%. Service does earn more per dollar, and by nine points rather than by the thirty a sell-side pitch implies, so a service-attach thesis has to be argued on bay hours and traffic rather than on margin.
Well-capitalized consolidators are buying independents at scale, with Sun Auto adding dozens of stores across 2025 and 2026 and Percheron Capital recapitalizing Big Brand Tire, so a searcher-scale operator with real service revenue is buying into an actively consolidating trade.
Enter earnings to apply this industry's cited band.
A sanity check against asking prices, not a valuation.
Holding a live deal in this industry? Underwrite it with the comps, cited band, and charge-off rate pre-loaded.
Compare bands across industries in the cited multiple bands by industry.
Who Else Is Buying in This Industry
- Sun Auto Tire & Service · Mesa, Arizona
Tire and service shops folded into a 575-store network one at a time under kept regional brands, with a standing sell-your-business door, so the trade consolidates faster than its storefronts show.
- Integrity Automotive · 2026 · Single Issaquah, Washington tire and service shop, the network's 25th Pacific Northwest location.
- 2 more confirmed on the firm's profile
- Mavis Tire Express Services · White Plains, New York
Tire and vehicle service shops bought across North America at a pace that has taken the group past three thousand six hundred locations, absorbing whole chains rather than single shops.
- Pep Boys · 2026 · About 800 tire-and-service locations bought from Icahn for roughly $700M cash, passing 4,400 total.
- 1 more confirmed on the firm's profile
Buyers is the shelf these come from, ordered by who closed something most recently.
What It Costs to Replace the Owner
The multiples above are quoted on SDE, which adds the owner's pay back into earnings, so they hold only if you do the owner's job. Hire someone instead and the going rate for the role comes back out. For this trade that is usually the shop foreman over technicians, paid a median of $79,860 a year nationally. Subtract it from SDE before applying any multiple, because at a 3x multiple that wage also takes about $239,580 off what the business is worth to you.
First-line supervisors of mechanics, installers, and repairers, BLS Occupational Employment and Wage Statistics (2025), national, all industries, before payroll taxes and benefits. Every role, and the same arithmetic worked end to end, is in Manager Wages.
The Numbers That Run This Business
- Tire units sold per day
- Service and alignment attach rate
- Gross margin by tire tier
- Fleet and account revenue share
- Inventory turns