Author Topic: Investing in SMOG shop  (Read 288 times)

LounginMKL

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Investing in SMOG shop
« on: August 13, 2019, 03:37:53 PM »
Does anyone have experience investing and managing SMOG shops? I love to hear your thoughts on the business. What are some pitfalls/stories you've experienced? I can see it producing stable cash flow but I'm also cognizant of the price sensitivity and long headwind (EV and more efficient vehicle) that would reduce the volume of the industry. Recently, new legislation passed where vehicles of 8 yrs (from 6 yrs) or less do not need SMOG test. As a result, revenue is lower this year and the opportunity is re-priced.

A few partners and I are thinking of acquiring an established one in CA. The cash-on-cash yield is decent but it's not an absentee business. (Then again, is there a true absentee business?) Part of the motivation is to gain some operating experience in my spare time.


Parsad

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Re: Investing in SMOG shop
« Reply #1 on: August 13, 2019, 05:44:37 PM »
There won't be any smog as electric cars become more and more prevalent.  Also, the reason test shops are closing is because cars are getting to be extremely efficient and they tend to produce low emissions as they age, rather than burning oil...just better quality...which I don't see deteriorating going forward, but the exact opposite.  Cheers!
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