The invention discloses a guide pin bush automatic installing device and an installation method thereof. The guide pin bush automatic installing device is provided with a rack, an electric cylinder, a pressing head, a rocker push plate, a guide pin vibration disc, a guide sleeve vibration disc, a guide sleeve feeding rod and a gas claw, wherein the electric cylinder is arranged at the upper end of the rack, a piston rod of the electric cylinder faces downwards, and the pressing head is connected with the piston rod; the rocker push plate is arranged below the pressing head, and a guide pin is placed on the rocker push plate; the rocker push plate is provided with multiple locating holes for accommodating the guide pins; the guide pin vibration disc is used for accommodating the guide pins and conveying the guide pins to the rocker push plate; the rocker push plate can conduct translation back and forth, and thus the positioning holes are moved to the portion below the guide pin vibration disk/pressing head; the guide sleeve vibration disc is used for accommodating guide sleeves, the guide sleeve feeding rod is connected with the guide sleeve vibration disc and outputs the guide sleeves, and the output guide sleeves are clamped through the pressing head; the gas claw is arranged above the rack, and can convey guide rods to the portion above the guide pins on the rocker push plate, so that feeding and assembling of bushes and the guide pins are automatically completed. The guide pin bush automatic installing device is high in automated degree and work efficiency.