Your Return-On-Investment calculation should be as accurate as your calibrations.

An important question to ask for anyone looking to get into ADAS calibrations is whether the investment is worth it. And like many things in life, it depends–on your volume, your pricing, your equipment choice, and how allergic you are to sending work down the street to a dealer. Below are some guidelines on when the upfront investment in ADAS calibration equipment is justified, and the different factors one should be evaluating to get confidence on jumping into the space.

The Napkin Math Business Plan

We often sketch out a business model for our customers on paper; we aim first to understand what their potential volume of calibrations is, and use our pricing benchmarks to come to an estimate of revenues. In short, this formula looks something like this:

 ADAS Revenues = (Monthly Vehicles) x (% Vehicles Needing ADAS Calibration) x (Number of Systems Calibrated) x (Average Price Per Calibration)

 For a medium-sized collision shop–let’s call them Ace Body Shop–that does 80 cars per month, identifies ~30% of vehicles needing ADAS calibration, calibrates on average 1.3 systems per repair order, and has a per-calibration price of $300, that is monthly revenue of:

80 × 30% needing ADAS calibration = 24 cars
24 × 1.3 calibrations per repair order = 31.2 calibrations
2 × $300 = $9,360 in monthly ADAS revenue

The most important variable for any shop looking to get into ADAS calibrations is the potential number of vehicles they could calibrate. Each auto business, whether collision repair, mechanical, or auto glass repair, has a certain number of vehicles that it inspects and repairs per month. Their repair work, if it directly involves or is even adjacent to any ADAS sensors, may necessitate an ADAS calibration per OEM repair procedures. While the percentage of work that need ADAS calibrations is higher in collision repair and glass repair, we believe that over time more mechanical shops will have more opportunities to perform ADAS calibrations, especially as the recent Ascential Technologies whitepaper highlighted degradation in performance of ADAS systems from normal wear-and-tear of the sensors.

Labor: The Part Where Time Becomes Money

After we have an estimate of revenues, the next step is to budget in the technician labor cost needed to do these calibrations. Again, taking the example of Ace Body Shop, if they are paying a technician $50 per hour all-in after payroll taxes and benefits, let’s say the time spent on calibrations is 30 hours, and so the allocated cost of a technician is going to be around $1,500 per month. That means the cash flows from ADAS will be $7,860 per month, after technician costs. The actual labor hours will depend on your workflow, equipment, and how many times someone says “wait, nudge the stand two millimeters.”

Case A (30 hours): $1,500 labor → $9,360 − $1,500 = $7,860 monthly cash flow after labor

When we build these custom forecasts, we also project out cash flows for a couple of years, because many of our customers experience significant growth every year – ADAS calibrations are no doubt a growth area – so one should expect the cash flows to increase from there.

The Gear: What to Buy When You Don’t Want to Buy Twice

The other part of the Return-On-Investment equation is the upfront equipment cost. If a customer is dipping their toes into ADAS calibrations and wants a lower-risk option, there are cheaper bundles where the tradeoffs may include slower setups, fewer conveniences, and they may skip things like wheel alignment verification. Bundles here can cost $20,000 or so, and that would put that shop in business.

Conversely, if the business owner or one of their technicians already has experience with ADAS calibrations and can confidently scope out the demand, then there are fully-featured bundles closer to $40,000. These are bundles that turn “we can try” into “we’ll have it back after lunch.” No matter the customer, we recommend a tailored approach based on the type of business we are interfacing with.

Other approaches we’ve seen are modular: start with a versatile scan tool with an ADAS upgrade to be able to do dynamic calibrations, then add simple tools like the corner reflector to cover front radar and blind spot monitoring, then progress onto camera-based targets for Lane Departure Warning and All View Monitor (360) systems. Then add the tools for night vision and other specialized systems.

Payback and ROI: How Fast Does This Thing Earn Its Keep?

This ongoing, growing cash flow that a shop generates from ADAS calibrations should be compared to the upfront investment in the tools and equipment, enabling one to calculate a) the payback period, and b) the return-on-investment. The payback period is important because after this point, the equipment is fully paid-off and everything that comes after is profit. Return-on-investment demonstrates how much more cash flow a business is doing relative to the size of the capital outlay. Luckily, as we demonstrate below, most customers are able to aim for payback periods of less than 6 months, and ADAS calibrations end up being a high return-on-investment source of revenue that they otherwise wouldn’t have access to. This second point is especially important, since your shop becomes more valuable to a potential acquirer if you are able to show revenue growth and can point to areas of continued expansion.

Going back to our example of Ace Body Shop, if they stand to generate an additional $7,860 of cash flow from ADAS per month, and they invest $30,000 into an ADAS calibration equipment bundle, here are the calculations:

Monthly cash flow $7,860 → payback ≈ 3.8 months (30,000 ÷ 7,860)
Simple Year‑1 ROI (cash flow ÷ investment) ≈ 314% (94,320 ÷ 30,000)

“How Many Jobs Do I Need?” (The Real‑World Cut)

If you can identify the need for 5 or more calibrations per month in the vehicles you work on, we would recommend investing in the equipment for ADAS calibrations. You can get started with a more affordable set up and will likely see a payback period of less than one year.

Some final considerations

Like we mentioned above, everything depends on the customer. Here are some final things we like to consider:

• Volume the shop already touches. Collision and glass lead with the highest number of potential calibrations, but mechanical is rising.
• Calibration mix. Cameras vs. radar vs. 360 vs. niche systems changes time-on-task.
• Pricing power. Knowing the market, and pricing with confidence.
• Workflow friction. More capable tools reduce set‑up time, rework, and gray hair.
• Alignment verification. Shops should determine if they want to do this in-house or find an alignment shop partner.
• In‑house vs. sublet. Dealers don’t mind taking shops’ money. Owners certainly will mind!

We see in the data we track that the industry tailwinds keep pushing the volume of ADAS calibrations higher. The number of cars with ADAS is growing, and the number of ADAS systems per vehicle is also growing. So on the revenue side, the opportunity cost of not adopting ADAS calibrations will continue to increase. The bottom line is that by becoming an expert in ADAS calibrations, operators won’t need to send cars to the dealership, and will grow their business ahead of their competition.