Thinking about starting your own mechanic business in New Zealand? You're not alone. With over 4 million registered vehicles on NZ roads and a shortage of qualified automotive technicians, there's never been a better time to launch your own workshop.
This guide covers everything you need to know – from qualifications and business registration to equipment costs and finding your first customers. Whether you're a qualified mechanic ready to go solo or planning a larger operation, we've got you covered.
NZ Vehicles
4.4M+
registered vehicles
Workshops
5,000+
automotive businesses
Startup Cost
$50-150k
typical range
↓ In this guide
🎓 Qualifications You Need
Unlike some businesses, running an automotive workshop requires specific trade qualifications. Here's what you need:
| Qualification | What It Covers | Duration |
|---|---|---|
| NZ Certificate in Light Automotive Engineering (Level 3) | Foundation automotive skills, servicing, basic repairs | 1-2 years |
| NZ Certificate in Light Automotive Engineering (Level 4) | Advanced diagnostics, complex repairs, trade certification | 2-3 years (apprenticeship) |
| NZ Certificate in Heavy Automotive Engineering (Level 4) | Trucks, buses, heavy machinery | 3-4 years (apprenticeship) |
| WoF Inspector Certification | Authority to issue Warrant of Fitness inspections | Additional certification (see our WoF guide) |
💡 MITO Apprenticeships
Most mechanics in NZ complete their training through MITO, the industry training organisation for motor trades. The Level 4 certificate typically costs around $1,189/year (excl GST) and is completed while working in a workshop.
Do You Need Qualifications to Own a Workshop?
Technically, you don't need trade qualifications to own a workshop – but you do need qualified staff to perform the work. Most successful workshop owners are qualified mechanics themselves because:
- You understand the work and can assess quality
- You can work on cars yourself (essential when starting out)
- Customers trust qualified owners
- You can supervise and train staff effectively
📝 Business Registration Steps
Getting your business legally set up involves several steps. Here's the complete process:
Choose Your Business Structure
The two main options are:
Sole Trader
Simplest option. You and the business are the same legal entity. Easy to set up, but you're personally liable for debts.
Limited Company
Separate legal entity. More paperwork, but protects personal assets. Register with Companies Office (~$150).
Get an IRD Number
If you're a sole trader, you use your personal IRD number. For a company, apply for a separate company IRD number through IRD's website. This is free and can be done online.
Register for GST (If Required)
You must register for GST if your turnover exceeds $60,000 in any 12-month period. Most workshops will exceed this quickly.
Pro tip: Even if under $60k, consider registering voluntarily – you can claim back GST on equipment and setup costs.
Get an NZBN (New Zealand Business Number)
Free and optional for sole traders, automatic for companies. Makes dealing with other businesses easier. Register at nzbn.govt.nz.
Register as an Employer (If Hiring Staff)
If you'll have employees, register as an employer with IRD. You'll need to deduct PAYE, pay KiwiSaver contributions, and handle ACC levies.
🔧 Premises & Equipment
Finding the Right Location
Your workshop location is critical. Consider:
✅ What to Look For
- • Industrial zoning (check council district plan)
- • Good road access and visibility
- • Adequate parking for customers
- • Three-phase power supply
- • Proper drainage for oil/chemicals
- • Room for future expansion
❌ Avoid
- • Residential zones (council issues)
- • Shared driveways/difficult access
- • Flood-prone areas
- • Sites requiring major building work
- • Locations with parking restrictions
📋 Resource Consent
Depending on your location and activities, you may need resource consent from your local council. This covers things like discharges to air (spray painting), stormwater management, and land use. Contact your local council early – the process can take 1-4 months.
Essential Equipment List
| Equipment | Purpose | Est. Cost (NZD) |
|---|---|---|
| Vehicle Hoist (4-post) | Lifting vehicles for undercar work | $8,000 - $15,000 |
| Diagnostic Scanner | Reading fault codes, diagnostics | $2,000 - $10,000 |
| Air Compressor | Powering air tools | $2,000 - $5,000 |
| Hand Tools (complete set) | General repair work | $5,000 - $15,000 |
| Wheel Alignment Machine | Alignment services | $15,000 - $40,000 |
| Tyre Changer & Balancer | Tyre services | $8,000 - $20,000 |
| Brake Lathe | Machining rotors/drums | $5,000 - $12,000 |
| Parts Washer | Cleaning components | $500 - $2,000 |
| Minimum Equipment Total | $45,000 - $120,000 | |
🛡️ Insurance Requirements
Proper insurance is essential. Here's what you need:
Public Liability
Covers injury to customers or damage to their property. Essential for any customer-facing business.
Typical: $1-2M cover
Professional Indemnity
Covers claims of negligent advice or work. Required for WoF inspectors.
Average: ~$86/month
Motor Trade Insurance
Covers customer vehicles while in your care, custody and control.
Critical for workshops
Tools & Equipment
Covers your tools and equipment against theft, fire, and damage.
Based on asset value
Get quotes from specialist providers like FMG, BizCover, or Marsh who understand motor trade risks.
💰 Startup Costs Breakdown
Here's a realistic breakdown of what you'll need to invest:
| Category | Budget Option | Mid-Range | Premium |
|---|---|---|---|
| Premises (bond + fit-out) | $10,000 | $25,000 | $50,000 |
| Equipment | $30,000 | $60,000 | $120,000 |
| Initial Stock/Parts | $5,000 | $15,000 | $30,000 |
| Insurance (first year) | $3,000 | $5,000 | $8,000 |
| Marketing & Signage | $2,000 | $5,000 | $15,000 |
| Software & Systems | $1,000 | $2,000 | $5,000 |
| Working Capital (3 months) | $10,000 | $20,000 | $40,000 |
| Total | $61,000 | $132,000 | $268,000 |
⚠️ Don't Forget Working Capital
Many new workshops fail because they spend everything on equipment and have nothing left for operating expenses. You need 3-6 months of expenses covered before you'll have steady cash flow from customers.
📊 Essential Software & Systems
Running a modern workshop requires the right software. At minimum, you'll need:
Workshop Management
Job cards, customer database, invoicing, scheduling. Hoist costs $90/month with all features.
Accounting Software
Xero is the NZ standard. Integrates with workshop software for automatic invoice sync. From $50/month.
Payment Processing
EFTPOS terminal for card payments. Verifone, Smartpay, or Windcave. Usually leased or low monthly fee.
⚖️ Legal Compliance Checklist
Make sure you're compliant with these requirements:
Consumer Guarantees Act
Your work must be done with reasonable care and skill, fit for purpose, completed within a reasonable time.
Health and Safety at Work Act
Provide a safe workplace. Risk assessments, proper equipment, staff training, incident reporting.
Environmental Compliance
Proper disposal of oil, batteries, tyres, and chemicals. May need resource consent for discharges.
Employment Law (if hiring)
Written employment agreements, minimum wage, holiday pay, KiwiSaver, ACC.
ACC Levies
Register as self-employed with ACC. Pay levies based on your liable earnings and work risk classification.
🚀
Ready to launch your workshop?
Hoist gives you professional workshop management software from day one. Job cards, invoicing, Xero sync, NZTA lookups – all for $90/month.
Start Free Trial❓ Frequently Asked Questions
How much does it cost to start a mechanic business in NZ? ▼
Budget $50,000-$150,000 for a basic to mid-range setup. This includes premises bond and fit-out, essential equipment, initial stock, insurance, marketing, and working capital. A fully-equipped premium workshop can cost $250,000+.
Do I need qualifications to open a mechanic shop in NZ? ▼
You don't legally need qualifications to own a workshop, but you need qualified staff to perform the work. Most workshop owners have at least a Level 4 NZ Certificate in Automotive Engineering. For WoF inspections, you need specific NZTA certification.
What business structure is best for a mechanic shop? ▼
Most mechanics start as sole traders for simplicity. However, a limited company (Ltd) is recommended once you have employees or significant assets, as it provides personal liability protection. Consult an accountant for your specific situation.
When do I need to register for GST? ▼
You must register for GST when your turnover exceeds $60,000 in any 12-month period. Most workshops exceed this within the first year. You can register voluntarily before reaching this threshold to claim GST on setup costs.
What insurance do I need for a mechanic workshop? ▼
Essential insurance includes: Public Liability ($1-2M cover), Motor Trade insurance (customer vehicles in your care), Professional Indemnity (especially for WoF inspectors), and Tools/Equipment cover. Budget $3,000-$8,000/year depending on your operation size.
Sources & Further Reading
- • MITO – Industry training organisation for motor trades
- • IRD – Tax registration and GST information
- • Business.govt.nz – Starting a business in NZ
- • Companies Office – Company registration
- • BizCover NZ – Business insurance for mechanics