How to Start a Car Hauling Business
Are you looking to become an owner-operator in the trucking industry and start a car-hauling business or auto transport operation? Starting a car transport business as a trucker allows you to be your own boss and build a profitable transport company. However, before jumping on the load board to book loads, there are essential factors to consider, such as obtaining operating authority, purchasing equipment, and finding clients.
First, familiarize yourself with regulatory requirements from the Federal Motor Carrier Safety Administration (FMCSA) and the Department of Transportation (DOT). You’ll need to apply for operating authority and obtain credentials like the International Registration Plan (IRP) to operate your small business legally.
Getting Authority
Obtaining a business license and operating authority is a critical step in starting a car hauling business.
- DOT Number and Operating Authority: You need a DOT number to legally operate a commercial vehicle in car hauling. This unique identifier is required by the Department of Transportation (DOT).
- Commodity Type: For a car hauling business, select “auto hauling” as your commodity type to ensure proper classification.
- Additional Credentials: Obtain additional credentials like:
- Unified Carrier Registration (UCR)
- International Registration Plan (IRP)
- Compliance with FMCSA regulations
Navigating these regulations can be challenging. Working with a consultant or mentor familiar with the transportation industry can save you time and money, ensuring your auto transport business is set up for success.
You’ll Need the Right Equipment
Having the right equipment is essential for a successful car transport business.
- Specialized Equipment: Unlike other divisions in the trucking business, you’ll need a commercial driver’s license (CDL) and a car carrier or auto hauler trailer. A standard trailer won’t suffice—you’ll need a heavy-duty car trailer to support multiple vehicles per load.
- Reliable Pickup Trucks and Semi-Trucks: Choose reliable pickup trucks (e.g., dually trucks) or full-size semi-trucks that meet towing specifications.
- Leasing Option: Leasing trucks may save you upfront operating costs and allow for future equipment upgrades. This option is ideal for a new business that wants to allocate capital to other expenses, like insurance policy and social media marketing.
Avoid cutting corners on equipment to prevent breakdowns and costly repairs, which can delay services and impact your bottom line.
Getting Insurance Quotes
Obtaining the right liability insurance coverage is critical for any auto transport business.
- Auto Transport Insurance: Different from personal car insurance, cargo insurance for hauling cars requires higher liability coverage to protect both your own business and the vehicles being transported.
- Factors Affecting Premiums: Consider factors like:
- Type of Cargo: Used and new cars are high-value loads requiring substantial coverage.
- Number of Vehicles Hauled: The number of vehicles impacts coverage needs and insurance premiums.
- Range of Hauls: Long-distance hauls can increase premium costs.
Shop around and compare quotes from multiple insurance providers to find the best coverage for your business needs.
Tips For Writing a Business Plan
Writing a business plan is an essential step in establishing a car-hauling company.
- Research the Industry: Analyze market trends, identify potential clients (e.g., dealerships and auctions), and understand competitors.
- Define Goals and Strategies:
- Create a marketing plan to attract clients.
- Build partnerships with car dealerships and auction houses.
- Invest in infrastructure and equipment to boost efficiency.
- Financial Projections and Budgeting: Set realistic financial projections and budgets for startup costs, potential revenue, and operating expenses.
- Seek Guidance: Consult a business advisor, mentor, or accountant for support. There are also online templates to help you create a structured business plan.
Also see: Starting a Trucking Company
Need Help Starting Your Own Car Hauling Business? Our trucking experts can guide you through the process. Contact us today at 913-675-2897 to learn more about building a successful car-hauling business in the auto transport industry.