Buying an Auto Body Shop
Why Searchers Look at Collision Repair
Collision repair runs on non-discretionary demand: a damaged car has to be fixed, insurance usually pays, and the work does not wait for a good economy. The shops are abundant and disproportionately owned by retiring operators, and single locations still trade at low-end small-business multiples, so the entry math works on modest equity. What a searcher is really buying is a position in an insurance-driven supply chain, and the regional multi-shop operators and PE-backed platforms circling the trade are proof the recurring, claim-funded volume is worth owning.
What Collision Shops Trade For
The sold auto service and repair class, whose page names auto body shops among its specialized inclusions, put half the market between 1.70x and 3.26x SDE across 2021 to 2025, with a 2.31x median and a $410,000 median sale price. Advisers price multi-location collision centers on EBITDA instead, a basis no publisher of sold data prints. The multiple tracks transferability and insurer standing: a shop running on documented estimating and its own DRP scorecards is worth more than one running on the owner's wrench time, and OEM certifications and in-house ADAS capability move it up the band. Owner-dependent shops without direct-repair relationships sit at the bottom.
The DRP Question
Direct Repair Programs are the shop's referral pipeline: an insurer sends claims in exchange for negotiated labor rates, parts concessions, and cycle-time scorecards. DRP work fills the bays and gives up margin to do it, and the trade shows up in GROSS profit. An operator who dropped two programs reported gross profit rising from about 41% to between 53% and 55%, on 100 cars a month where he had run 180. No trade publication states a net differential, and a 2007 analysis put a typical shop's net after overhead near 3%. So the question is what kind of revenue: a shop that is 80% one insurer's DRP is exposed to that insurer's next rate cut, while a retail-weighted book keeps more of each dollar.
ADAS and the Equipment Curve
Advanced driver-assistance systems have turned a fender repair into a calibration job: cameras, radar, and sensors behind the bumper and windshield must be recalibrated after the work, and doing it in-house requires targets, scan tools, space, and trained staff. Shops that can calibrate keep the profitable, growing part of the job; shops that sub it out give the margin away and add cycle time. The equipment and training bill is real and rising, so treat calibration capability, paint-booth capacity, and the age of the estimating and management systems as capex you are inheriting, not a detail.
What to Verify in Diligence
Beyond earnings quality:
- Insurer and DRP concentration, since one program's rate cut can reset the whole P&L
- DRP scorecard standing and whether the relationships transfer to a new owner
- Retail versus insurance revenue mix, because the two carry very different margins
- In-house ADAS calibration capability and the scan-tool and target inventory behind it
- Cycle time, supplement capture, and parts-delay exposure against local benchmarks
- The lease and permitted use, since paint booths and body work depend on site control and zoning
Financeability Notes
Collision shops finance under SBA 7(a) when earnings are documented, and the paint booths, frame machines, and lifts give a lender some collateral to lean on. Underwriting will press on insurer concentration and owner dependence, and any owned real estate pulls the environmental question (waste paint, solvents, in-ground work) into the loan file, often requiring a Phase I before closing on the property. Model debt service on normalized earnings with a manager or lead estimator replacing whatever the seller did in the office and the booth.
Terms in This Industry
Spray booth filter
The federal finishing rule spares booths a federal operating permit but requires 98 percent overspray capture.
Touch time
The hours a vehicle is actually being worked on inside the days it sits in the shop.
Direct repair program (DRP)
An insurer steering claims to a shop in return for rates, parts terms, and a scorecard.
ADAS calibration
Resetting a vehicle's cameras and sensors after a repair, so the driver aids read the road.
Cycle time
Days from drop-off to delivery, the number collision insurers grade a shop on.
Painter certification clock
Each painter's own five-year training expiry, which a buyer inherits one employee at a time.
Aftermarket crash part notice
The type-size notice a body shop owes before fitting an exterior crash part not made by or for the automaker.
Nonproductive time
California's rule that a flat-rate technician's waiting time is paid on its own, apart from the flag pay.
What the Data Says
BizBuySell's auto service and repair class covers 1,286 businesses sold from 2021 through 2025, and its page names auto body shops among the specialized inclusions. Earnings multiples ran 1.70x at the lower quartile, 2.31x median, 2.82x average and 3.26x upper quartile, on a $410,000 median sale price and $182,133 median owner earnings. It is a repair-sector blend, not a comp for any one collision shop.
Source: BizBuySell auto service and repair benchmarks (2021-2025 sold listings, sector blend)
The trade press reports the DRP trade as GROSS profit, not net, and as one operator's experience rather than an industry rate. A shop that dropped two programs reported overall gross profit moving from about 41% to between 53% and 55%, while monthly volume fell from 180 vehicles to 100 and monthly revenue rose from $500,000 to $700,000. Net profit for the trade is a far smaller number, which the shop-profitability point below puts at 3%.
A 2007 trade analysis put the collision industry's overall gross profit at 36 percent, a 20 percent reduction over the prior 20 years as parts-to-labor mix and insurer-negotiated rates compressed margins, and showed a shop paying 33 percent overhead netting only 3 percent.
Source: BodyShop Business, shop profitability analysis (2007)
Enter earnings to apply this industry's cited band.
A sanity check against asking prices, not a valuation.
Where they are, from Census County Business Patterns: California (2,080), Texas (1,360) and New York (835) hold the most buyable ones. Each state guide ranks its own counties, which is the number that decides a search: nobody buys a state, they buy inside a drive.
Lender context, from the SBA loan-level file: The Huntington National Bank (19), Live Oak Banking Company (19), Manufacturers and Traders Trust Company (7) wrote the most of this industry's 213 acquisition approvals. A bank that knows the trade says yes faster; the ranking for every industry is on Most Active Lenders by Industry.
Holding a live deal in this industry? Underwrite it with this industry preselected and its cited band loaded.
Compare bands across industries in the cited multiple bands by industry.
Who Else Is Buying in This Industry
- VIVE Collision · No head office on its own pages; each release is datelined from the shop it just bought
A collision repair multi-site operator adding roughly one shop a month across the Northeast, printing its running location count in most of its releases.
- Above All Collision Center · 2026 · A Concord, New Hampshire shop at 45 Chenell Drive, kept as Above All Collision Center Powered by VIVE.
- 8 more confirmed on the firm's profile
- Crash Champions · Chicago, Illinois
Independent collision shops bought one at a time across 38 states by an operator that calls itself the only founder-led national one: the rival bidder on single-shop deals and a standing exit.
- Key Collision of Southaven · 2026 · A repair center in Southaven, Mississippi, the firm's eighth in the state and its one purchase announced in 2026.
- 48 more confirmed on the firm's profile
- Boyd Group Services · Winnipeg, Manitoba
Collision repair centers bought across North America by one of the largest non-franchised operators, trading in the US as Gerber Collision & Glass: a body-shop searcher's rival bidder and likeliest exit.
- Joe Hudson's Collision Center (closing) · 2026 · Regulatory clearance satisfied, with the company setting closing for January 9, 2026.
- 1 more confirmed on the firm's profile
- Classic Collision · Atlanta, Georgia
An Atlanta collision repair operator that buys single body shops and small multi-shop groups, publishing a release per purchase with the shop name and the town in it.
- Kendrick Paint & Body · 2025 · Body shops in Augusta, Georgia and Aiken, South Carolina, bought together.
Buyers is the shelf these come from, ordered by who closed something most recently.
How Big This Market Is
There are about 35,029 businesses in this industry. 16,129 of them (46%) have 5 to 99 employees: the band big enough to have something to sell, small enough to finance. Most of the rest are owner-operators with a job rather than a business to hand over.
Census County Business Patterns (2023). How often they change hands is in Market Depth.
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
- Insurance versus retail revenue mix
- DRP scorecard standing and cycle time
- In-house ADAS calibration share
- Supplement capture per repair order
- Paint-booth and bay utilization