Towing seems to be a simple business; the work involves just going places to haul and move vehicles. However, like any other business, it involves planning and management. Following we will discuss important factors in starting a towing company.
Costs of Starting a Towing Company
A tow truck business involves a high startup cost, mainly due to the necessity of purchasing a tow truck. Tow trucks are often listed for sale for prices between ten to fifty thousand dollars.
One of the biggest startup expenses is licensing fees. Besides a Class B license, business owners may need to acquire state permits and local permits as well. Find out what specific permits they need and how much they cost by contacting your state and local city or county clerk’s office. Many of them cost at least a few hundred dollars, and some are even more expensive.
Ongoing Expenses for Towing Companies
A tow truck business must pay ongoing fees for licensing and insurance. Fuel, depreciation, and repairs of trucks are among the variable costs.
Wheel Lift or Flatbed Tow Trucks
Your choice of flatbed or wrecker for your first truck is determined by the type of towing your business will engage in. A wheel lift tow truck will be more practical if you’re only doing repossessions or private parking impounds. However, if you’re planning on doing consensual towing, also known as “retail towing,” a flatbed tow truck is your best option.
You will likely need at least one of each type of tow truck if your business is engaged in police towing. You should buy a wrecker fitted with a wheel-lift, a boom, and two winch cables if you don’t already have one. Police towing includes accident recovery, and while flatbeds can be used for accident recovery, wheel lifts prove to be more versatile.
When it comes to wrecker bodies, Miller Industries and Vulcan 882 are preferred. It’s perfect for providing light-duty towing, as well as accident recovery. For more heavy-duty duties, however, you may want to check out the Vulcan tow truck series.
Flatbed tow trucks may offer towing capacity of twenty thousand pounds, and the Vulcan 882 is up to ten thousand pounds. There are also dual-line winches for the Vulcan 894, rated at twelve thousand pounds, against the Vulcan 882’s eight thousand pounds.
Whenever possible, choose the aluminum and composite flatbeds compared to steel flatbeds. They can prevent corrosion in areas that have salt and snow elements. Also, choose flatbeds that are longer than twenty-one feet in length. This will ensure sufficient space to hold the vehicles. Find flatbeds that have removable rails so that they can be adjusted to tow both equipment and vehicles.
Type of Towing Business to Choose
If you are considering starting your own towing business, there are two main types. The two types of towing are consensual and non-consensual. As a new business owner, you will need to determine what type of towing service you will provide. It is possible to operate both types of towing businesses simultaneously; they are not mutually exclusive.
A non-consensual tow truck operator legally removes an automobile from private or public property without the owner’s consent. Retail towing, or “Consensual Towing,” is the practice of providing roadside assistance services to customers who request them. Providing services through a consensual towing arrangement can occur if the vehicle owner or someone acting on his behalf needs your assistance.
Among the customers who utilize the services of a towing company that provides non-consensual towing are commercial property owners and managers as well as law enforcement.
The law and ordinances you must follow when towing a car to your storage lot, or impound lot, have certain provisions.
More into Consensual and Non-Consensual Towing
Starting a non-consensual towing business means you have to know and observe all the rules and regulations set by your state and local governments. It may be required for the towing company to offer storage for a certain period of time, and there are rate caps for storage and towing.
Generally, when operating a consensual towing business, you will not be required to have a location where customers can visit. That’s because you don’t need to store vehicles. In most cities, you can operate a consensual towing operation from your home. Commercial vehicles should not park on residential streets, as there may be ordinances prohibiting it, this will be dependent on the city regulations.
Other Requirements for Consensual Towing
Many states require you to have a business license, to be properly insured, and, in many cases, to be registered with the Department of Transportation.
The towing company may also need to:
- Regularly inspect your tow trucks
- Possess some sort of formal driver training certification
- Have a specific class of driver’s license
- Have Certificate of Insurance
To operate as a consensual towing company, different types of licensing and training may be required in different states and cities. Additionally, certain government permits and/or training certifications may need to be obtained from specific vendors.
It can be difficult to decide what type of towing business to open. Even though non-consensual towing is by far the most profitable, considering the investment required and return on investment rate, it might not be as good as simply operating a non-consensual towing business from home.
When starting a towing and roadside assistance business, there are many things to bear in mind. One should do due diligence before starting a towing company.
