Cost to set up mobile business cutting car keys?

[d_Random]

I used the search function and could not find this exact question:

What is the cost to set up a mobile business to cut car keys?
That is, minus the vehicle. Machine to key cuts, cost of blank
keys to cover most vehicles. Probably some other stuff.

Welcome your reply!

[Squelchtone]

Are you planning on reading and programming transponder key heads as well? And is this just mobile key cutting, or will you be doing vehicle lock outs and changing out door locks and ignitions?

Squelchtone

[d_Random]

Thanks for your reply Squelchtone.
Yes to reading and programming transponder keys.
Also lockouts, no to door locks and ignitions.

How much you think?

[2octops]

What country are you in?

You can easily hit $80k depending on exactly what vehicles you want to target.

A conservative number would be $30k but you will quickly find you don't have all you need.

[victorylocksmith]

key machines themselves with programming/cloning machines can easily run you over 20k. then you have to take into account you use up 'tokens' you have to be constantly replenishing when you program the new keys to the cars which are not cheap. but hey, if you think that is expensive, wait until you actually stock key blanks and transponder blanks. then add in the remotes and we can easily end up wth over 40k when including inventory. i know some guys who have over 40k in JUST inventory and not machines/equipment.

[victorylocksmith]

it appears you are attempting to branch out into more areas in the field. there is big $$$ to be made with automotive but it takes a HUGE investment as you can see and most people are not willing to take that plunge. myself personally, i would rather just stick with rekeys, lockouts and replacing commercial hardware. they make you decent money with very little inventory expense. i suppose you wouldnt be asking for the cost of doing auto locksmithing if you were slammed with typical rekey business.

there is a lot of auto lock work to be done but it takes $$$ to buy into it and even more time and $$$ to advertise. another alternative is to get into safe tech work which i personally find not very difficult. half the time, if it isn't user error, you just go in there and drill the thing open and it takes forever. all you really need is a good corded drill and carbide bits. some people get on my case for not using a drill rig but, realistically you dont need one if you have good aim. it may take you a bit longer but it really isnt that bad. there is good $$$ in safe work when it comes to fixing them and putting new locks on as well but, the issue is again, it is hard to get jobs doing it.

the next option is to go towards access control, cctv, and alarm systems. access control and cctv do not require low voltage licensing but alarms do. there is big $$$ to be made with access control and cctv but wiring them up can be troubling and if you really want to do clean installations, the router jigs can be expensive. also, the inventory itself is not cheap, but with the profit margins you will be making, they are easily worth it. however, that being said, the inventory is too $$$ to carry lots of stock on you at all times if you arent doing tons of jobs. same thing with CCTV work as well. i know it is a lot to think about but, this is how the business is.

me personally if i could just do like 3 lockouts a day, i would be happy. i would just bump key the hell out of the locks and be very content. however, for myself, i just cant get enough leads.

[victorylocksmith]

lastly, there is door work. which can be back breaking work. im not really a door guy but ive been thinking about dropping $200+ on hinge doctor which lets you realign hinges rapidly. i figure every door i realign i will charge $30-$50 depending how easy it is with hinge doctor and it will easily pay for itself in no time. most the time, the issue with residential, the door is sagging due to the hinges themselves or the screws holding them in. just bring some extra long and thick screws and you can fix half your issues. tackle the other half with hinge doctor.

[Sinifar]

This is another sore subject around here. CARS used to be about 1/4 of our work. I really don't want to say how many car keys were cut on the old Curtis 15, not to mention the older 14, but know we did a lot. Then came VATS.

Here you needed to buy the 15 key set of blanks with the resistor in each, and some kind of tool to figure out which resistor fit the thing. It started in 86, and I waited until 89 to get into it. How many keys would we cut? The calls never came. We did a few, at least enough to cover our collective costs, but not near the land office business which Briggs was telling us. Then came the double sided VATS and another set of keys needed to be bought. Needless to say we took over 8 years to break even. The call were just not there.

WHICH brings up to today. The radio chip keys were cute, but the cost of the programmers / readers not to mention the keys themselves were just out of sight, and worse, this wasn't a "buy it and run it forever" deal, OH NOOOOO!! You had to buy an "update" every two years at almost the original cost. Like 2K to 4K every two years. Then there is the new machines to cut the keys. Not just side winders but Tibbe and who knows what else. I looked at this using a Chinese knock off of the programming machine which was supposed to "do all" but then I found out about all the problems others were having with the thing, so that went south as well.

IN the end I sat on the sidelines until I saw a trending in calls for the things. If we are not turning down or referring calls to other smiths, then I don't see the need. This is where we stand today.

I have the stuff to cut the actual keys, including a couple of sets of sidewinder depth keys I bought on sale, and OF course if you saw my other posts I do have the actual machines to cut keys --- but no programmer. Until I can really see a return on the investment, it isn't worth it.

Yes there are a couple of guys around here who are deeply into car work,, and are making tons of money on it, mainly due to being affiliated with and working almost exclusively at the local Metro Auto Auction. Don't think working for car dealers is lucrative. It is a major headache trying to get paid from those stingy people. I have lots of old invoices from car dealers which never got paid, and never will. WORSE they expect you to come running every time some goof makes a pocket sale, and now they can't find the keys and some "customer" is standing there with 1000 dollar bills hanging out of his pockets just drooling to buy THAT CAR!! I could go on, but this is a hot button around here.

Unless you have a ready source of business, or a client lined up, this whole thing is a crap shoot, and the craps are loaded.

Sinifar

[2octops]

Let's get some realistic numbers together just for giggles if someone wanted to break into the automotive market of today.

You can pick up a new code machine that does regular keys and high security keys for about $9k

You've got to have a lot of clean power to run that machine, so figure another $1k for the pure sine inverter, wiring, isolator and second battery.

You can buy some cheap, knock off transponder programmer for a few hundred but don't expect to do everything on the road with it or even everything up to 2013. If you want to be serious and do vehicles made up to 2015 at least (we've already done over 40 2016's) you will need something like a T-Code Pro loaded for about $10k or a MVP Pro with the unlimited token package for $6k. There are still things those machines will not do like early Toyota/Lexus or some Honda's so you will need a flasher for them. That's only going to cost about $1,300. Oh yeah, some need a J2534 pass through device to program, so there's another $2k. Oh, you wanted to do some European cars to? You need to be able to do some EEPROM work and know how to solder on circuit boards. Add another $4k for cheap stuff to get started.

Now we are only up to $27,300 and that does not include any actual hand tools for working on the actual locks or decoding them. Don't forget to stock that spare cutter and belt for your machine because if they break (and they will) you are out of business until your machine is repaired. Go ahead and bump that to $30,000 just to be on the safe side.

Now we get to the fun stuff called inventory because you can't sell it if you don't have it. Sure, plain metal keys start about $0.20 each and you'll only need less than a thousand of them to keep you from running out of something daily. The fun stuff is the late model transponder keys that can be as low as $5 each and as much as $400 each, unless you have to pick up something at the dealer and then you can get up to $600 each. Don't worry though because most normal things we see each day are in the $30-$175 range. Let's don't forget about remotes because EVERYBODY has them now and they normally are $100 or less.

$40k in inventory sounds like a lot, but in reality it's a good starting point unless you expect your customers to wait days for you to order keys. I can assure you that they can usually find someone else that has them in stock before you get them delivered. Just for an example, I order stock each Monday to replenish what was used the previous week. I placed orders today that totaled just under $5,000 for automobile keys and remotes only.

Customers are easy to find with automotive work as long as you have a good reputation for it (or healthy marketing budget). We do not advertise. We do a ton of dealer and auction work and never have an issue getting paid from any of them. Small lots pay when we finish. Most new car dealers pay within a couple of weeks. They both refer us to the public which pays once the job is completed.

That is a real work break down of car keys of today. Yes you can take a piece of brass that cost $0.30 and turn it into $125 in about 5-10 minutes and you can take a key that cost $125.00 and turn that into $450 in about the same amount of time. Some do take longer than others. It's not a bad gig if you enjoy the work. All it takes is money.

[Sinifar]

Great POST!! So in round numbers you have an investment of $67,300.00 for this project. NOW comes the return on the investment.

How many clients at, and I'll take the round number of $250.00 as an average, will it take to break even? About 270. SO one a day means that every day you need to be out there making at least ONE car key. It sounds like you are working for the local metro auction, which is fine. That leaves the rest of us. We don't work for the auction, or most of us don't work for the stealers either. So that leaves working for the public.

NOW I know that the local ACE hardware store is making "chip" keys. Talking with Art, one of the owners, he says that people are revolting at paying up to $125.00 for a key over there. Now I ask you WHY do they revolt at the price by Art, but they will waltz into any stealership and pay that much and usually twice that without even thinking or protesting?

The key and fob units which are so prevalent today, wholesale at between $125.00 and over $400.00 according to my catalogs. How many of those are you going to sell to the public which balks at anything over $5.00?

Worse, how many of these "new cars" today are going to need keys 10 years down the road as the cars work their collective way thru the used car market to the scrap yard? Look at any used car lot on any corner. Not many of the "newer" cars out there. I see lots of older, like 10 to 15 year old cars on the lot. Those need the old type, read that just a key, no electronics, to operate them. How long do you think that is going to go on?

Worse yet, many cars today have that Chrysler fob "key" which isn't a key at all but just a radio chip. My 2014 TC has only one outside lock and no inside buttons. Everything today is going to electronics. Which means shortly they will be unlocked and started with the smart phone app. And just await until they figure out how to hack that thing and cars will start to evaporate off the street. We are seeing that trend already with exposes on some of the TV magazine shows with ON STAR being hacked.

The daughter (43) is working as a IT security head at a hospital and the grand daughter (23) has recently graduated from the University Wisconsin, at Wisconsin with a CEE degree. (Computer electronic engineer) ASK either of them about hacking into almost anything. If the world thinks that "computer" is safe, or secure, they have another guess coming. It is a porous and transparent as cellophane. People only think they are ahead of the game because it is the latest thing. Computer seems so "modern" but know it is only an illusion. Big corporations are trying to keep the lid on the problems so as to not scare off the public.

This brings us to cars and all the electronic stuff on them. It will only be a matter of time before the electronics are compromised and the things start to evaporate off the streets. Worse, some goof hacks into your car, locks up the whole electronics and holds you hostage to get your car back. AND Changing the computer won't do the trick. once they get into the system it is going to be fun watching the game.

Better, wait until they get into your "electronic home" and start playing with that. I got a letter from EM-24 which talks to the hacking of the wireless alarm systems sold over the past 30 years. This is only going to get better for one group - TORT LAWYERS. It is coming.

As a couple of us old timers were sitting talking the other day, the car game is basically over. Yes you can still make some money as the Titanic goes down, but know in the end, you will be underwater.

There is more, but not for now.

Sinifar

[2octops]

Out of 365 days in a typical year a normal American will work 260 of them if they work 5 days a week. That means the initial investment is paid for in 54 weeks if you only do 1 car a day in theory. There are additional cost to operating a business each day that add up quickly, but still the investment is easily recoverable in 5 years. Remember, this is for people that are operating a business as a real business and not just trying to make ends meet or working as a hobby. Multiple families depend on the success of a business to pay their mortgage, buy groceries and fund their retirement accounts. A typical large investment will hopefully pay for itself in a 5-7 year projection if not longer.

The people that go to Ace Hardware for their key is a different breed than the ones that use professional locksmiths and dealerships for their needs. These people are looking for the cheapest possible solution and we are NOT it. Our customers chose us because we are professionals that have invested a lot of time and effort into having the right tools for the job, the experience to know how to use those tools in a quick and efficient manner. I would estimate that 80% of the vehicles we do on a daily basis only takes 5-10 minutes to actually do the work on the car. The rest of the time is dealing with the customer, getting tools out and putting them back up. Normally this is longer than the actual work.

Yes, cars are becoming easier to steal with the correct tools. Many with the push button ignitions and electronic keys we can actually have the electronic "handshake" done in literally a minute or two and crank the car. Sure it's a nominal investment but if the reward is a $30k-$60k vehicle that you can drive off in, the investment is worth while to some. Yes, it is already happening in this country as well as others.

There is a product in the UK already that is working to prevent this from happening. It is the OBD Blocker. With it installed there is no communication with the vehicles network through the OBD port.

As far as used cars go, they will always be around. There is a market for older vehicles that are not expensive to repair and easily obtained by people that do not want to or have the means to spend tens of thousands of dollars for something to drive. These vehicles will be on the road forever. I recently made a set of keys to a 1982 Chevrolet Citation. The young lady paid $200 for the car with no keys because it was all she could afford. I hated to charge her $125 for an ignition key, but have to remember that it's not just MY money but the companies money I am dealing with.

With that being said, a lot of these newer vehicles that are running a CAN BUSS network will NOT be on the road once they have expired. Each module must be programmed back to the vehicles BUSS in order for it to communicate with the rest of the modules for the vehicle to run. This takes expensive equipment to do and is nothing that can be bypassed. I am already seeing vehicles from the late 90's and up with less than 150,000 miles being totaled because the cost of the repair is much greater that the value of the vehicle and sometimes that's just the keys. Take for example a 98 Toyota Camry. It had the worst immobilizer system ever created on a vehicle. If you had a working master key (not valet) you could program additional keys to the vehicle. If you only had a valet or no keys at all you had to take the car to the dealer and have the ECU replaced and 3 keys added back to the vehicle. This vehicle wholesales currently for less than $800 and retails for less than $1400. The repair cost at the dealer is in the $1500 range depending on the dealers labor rates. Yes, we have equipment the dealer does not have but still this repair comes in around $450-$600 for us to reprogram the ECU and add keys back to the vehicle. It's hardly worth spending the money even if the dealer bought it wholesale and it going to retail it out.

Water damage is another issue that we are experiencing. Used to a vehicle that had been through a flood would easily be repaired by drying everything out and changing the fluids. Now the harnesses corrode, modules corrode and everything driven by a stepper motor corrodes. I have a customer that purchased a almost new Infinity SUV from the New Jersey area that had gone through Hurricane Sandy. He paid less than $20k for a $60k vehicle and wanted me to fix the keys. Every module, harness and electric motor was destroyed and it was estimated that it would take almost $80k in parts and labor just to replace everything. He ended up buying a wrecked vehicle and basically swapping the body himself. It would have been cheaper in the long run for him to just buy the vehicle as a lease turn in at a dealership.

I've also seen vehicles that light body damage from a fender bender that was hit just right causing the CAN BUSS network to become damaged. A 2012 with on a dented front fender was a total loss because the wire harness was pinched and took out the network and several modules all at the same time. Again, this minor body damage created a situation where it was more expensive to repair the vehicle than the it was worth.

In short, these new vehicles are disposable.

Also speaking of hacking the system, it's already being done. There are many vehicles on the road that you can crank with your smart phone app. There are diagnostic tools available that communicate via Bluetooth to the vehicle and can take over different modules. All it takes is someone knowing what they are doing to be able to continue through the system and access the immobilizer to start the vehicle. I have personally been in a Ford vehicle at a class that the passenger was controlling the throttle, brakes and transmission via his laptop from the back seat. He could control many other things such as door locks, windows, radio, wipers ect, but the throttle and transmission were the things that scared me the most.

[Sinifar]

2octops - Thank you , you have explained this far better than an old timer can. I know this stuff, but have problems explaining it clearly. Just age and too much going on around here, but the point is well taken and explains what I was trying to say in a nutshell.

Cars were a major income producer. Today?? Good luck. I am not sure what the trigger for all this fun stuff was, or continues to be, but know it will only get worse as time goes on. Cars will "last" only as long as somebody in charge wants them to. who is in charge? Anybody's guess. But know that about the point of 10 years or 125,000 miles they will suddenly go dead, and be unable to be repaired, so you will have to replace them with something newer, or worse GREEN ... (hint)

That Toyota computer needing to be replaced was addressed by Jeff Trempanier ages ago when he wrote for the Ledger. I am not sure what happened to "tiny" but he was a good friend and I worked with him for ages. There is also the problem of "flashing" a lot of Japanese and some German computers as well, this is another big deal. It seems that everything they do to keep cars from not being stolen is only a boondoggle for the stealers. In the end, the things go into a cargo container and go over seas, where this problem is handled by "experts" in some foreign country.

That Chinese tool which is knock off does work I guess for some cars, but not all, and is usually a few years, read that old programs, behind the current years. If I read the stuff on the web right it is about 2 years behind, and not reprogrammable. It does not do "all" but select cars which I guess are the most popular. Here again one would need a very detailed list of what it works on and what it does not so that whom ever is taking the service call can decide if we have the "right stuff" to make a key for their car.

Today I made a key for a 88 Ford F150 10 cut. Not a big job, something i have done for ages. Job done in about a half hour all things considered.

Ya well your points are well taken and should be considered in thinking of getting into this part of the trade.

Sinifar

[Squelchtone]

So d_Random,

A lot of experienced folks have put down a lot of good, realistic, practical, and very detailed info. So what do you think? Do you have follow up questions? It's probably more money to start a car key business than you probably expected, right?

Edit: what is your location as well, please fill in your member profile with a state/country. It can help us provide you with location specific advice.

Thanks to everyone who contributed,
Squelchtone

[dll932]

I worked with a local guy who has worked on car locks for decades. He tooled up to do the newer stuff...but doesn't get a lot of work. He tells me some dealers will do chip keys at a loss as an accomodation and many customers balk at spending much money for keys. Speaking for myself, if I don't do any more auto work it'd be fine with me. It used to be easy money, not so much now.

As far as cars getting stolen, all it takes is a tow truck. To me all the chip keys etc. are just an expensive pain in the butt for all concerned.

[d_Random]

Thanks for all the thoughtful replies everyone!
More information than I could ask for to make a decision.
It sounds like a big gamble according to most replies.

One additional question, another locksmith I talked to said that typically the ratio of successful car key calls is 40%.
60% of customers calling for car keys balk at the price.
Have you found that to be true, approximately 40% success rate?

So d_Random,

A lot of experienced folks have put down a lot of good, realistic, practical, and very detailed info. So what do you think? Do you have follow up questions? It's probably more money to start a car key business than you probably expected, right?

Edit: what is your location as well, please fill in your member profile with a state/country. It can help us provide you with location specific advice.

Thanks to everyone who contributed,
Squelchtone