Warning; I am new to the group and I post alot. I hope others dont mind a very questioning person. I will try to maintain my focus. I have posted alot over the years in the Master Window Cleaners of America forum and use the Bimmerfest group alot. Owning 3 1995 BMWs and now breaking into my first what I would call heavy work (318TI control arm bushings) I can not help but wonder at what level of immersion into shade tree mechanics it becomes advantageous to invest in the compressed air technology. I could see popping off my frozen ball joint in two minutes with an air hammer, wheels too. I have worked on oil pumps, water pumps, hatch shocks and alot of other light weight jobs so perhaps it may not be in my best interest but perhaps I want to do more ball joint work or just want the luxury of having strong air fast for my tires. I just cant help but wonder about this (to me) exotic form of power. Could you get started with pneumatic (basic) toos and compressor for under $1,000?
For you, any 25-30 gallon compressor would work, as well as any low end compressor tool set. Impact wrench (use a freaking torque wrench when tightening, though) air chisel with various attachments, and air ratchet are a good start. Then a die grinder and anything else you need along the way can be had from Harbor freight, Sears, Wally world, etc. You should be able to get started easily for under $500. Check for sales at the afforementioned stores, or look in yor local Craigs list or trading post for deals. I have a compressor from Lowes and Campbell Hausfeld air tols for home use (actually they saw lots of shop use,) and they are just fine. I never saw the point of spending all the money I was making at work on tools. Seemed foolish to me.
An air compressor with appropriate tools is a HUGE improvement for most DIY shops. You will find the most useful air tool is an impact wrench. other tools like cut off wheels, die grinders, drills, etc. are sometimes useful. if the main concern is impact tool, go for electric. (the otehrs are all available electric as well)_ if you want to set up a sand blast cabinet or paint, then you will need a far from base level compressor or else you have to wait for the compressor 50-70% of the time. for "work on the car" stuff, electric saves considerable dollars. If you have a Harbor Freight tools hear you, check it out. Northern Tools, I'm told, is almost as good in other parts of the country. you'll have to decide what you want to do...air is real nice (but you can't leave the compressor on all the time...the noise will drive you nuts...so if you want to puff the tires, you have to start it and wait 10 minutes before you can use it. Then turn it off)
Air Compressor Paul is right....don't go crazy spending tons of money on air tools. That said, don't buy junk either. If you are just taking off lug nuts and suspension parts etc. and NOT running a blast cabinet, then a smaller 125 psi 25-30 gallon tank will work fine. Watch the sale ads as Sears often times will run a special on their nice vertical or horizontal oriented 26 gallon / 160psi / 1.6hp roll around tank with a bunch of tools like impact, wrachet, blowers, air lines and QD's for $300-$325. (I saw this in the paper today as a matter of fact.) I have had this same Sears model with the oil less direct drive motor for over 8 years. Draining the condensation water after use and installing an inline air/water separator will keep whatever unit you buy in great shape. I have bought only the air tools that I have had to borrow from work, or friends, more than once. Since most air tools only use a max input of 90 psi. or less, I can run my cutoff wheel, grinder, air drill, HVLP paint gun, impacts (1/4", 3/8" and 1/2" drive) with no waiting after the initial charge. Are the compressors noisy, most are. You PAY for quiet and all day usability. I also have a box of ear plugs and/or a pair of ear muffs for the loud stuff. Air tools can save you LOTS of time, so even if you have a wait for a minute or two for recharge, you are still time ahead overall. Lets not talk about the physical effort and potential knuckle busting you will miss out on. Work smarter, not harder..... With a $500 budget, you could be pretty well set up for most jobs.
I have air and almost never use it. I would not waste money or garage space on it. If you feel you must have an automated tool get electric. My most commonly used automatic tools are a battery drill for spinning on and off lugs and bolts and an electric ratchet for about the same but in close quarters.