Posted on 06/23/22

Step By Step Guide To Starting A Car Hauling Company

Step By Step Guide To Starting A Car Hauling Company

Although it can seem daunting to start a car-hauling business, it is an exciting and rewarding journey.

There are many details to consider, from the legalities of moving cars across state lines to the equipment needed to do the job right, to the logistics of the process.

This article will guide you through every step in starting a car hauling business. Get practical advice about setting up your car transportation business.

What is the annual salary of an auto hauler?

A contract to transport new cars for a car manufacturer will typically net an average annual income of $75,000 to $110,000 for an auto transport company.

There will be a high demand for your services as long as people continue to drive cars. Car dealers and individuals who need your services to transport their vehicles across state lines will all be in demand of your services.

This will ensure that you are able to continue and win repeat business.

The benefits of owning a car hauling business

Starting your own car-hauling business has many benefits.

You'll be your boss, and you can set your own schedule. You'll be able to expand your business to the extent you desire as an owner-operator.

You can also start small and have very little capital. There is no need for a lot capital. All you need are a truck and the equipment.

It's very rewarding to start your own business. It's great to be your boss and create something new.

What is the cost to start a car hauling business?

There are a few things that can affect the cost of starting a car-hauling business.

If you are starting a small business, you can manage with just a truck.

You may need additional trucks or trailers if you are starting a larger operation. These can run anywhere from $30,000 to $100,000.

You will also need the licenses and permits required to run your business. The cost of your business will depend on where you live.

You will also need to buy insurance for your company. This is an obligatory expense that can run anywhere from $500 to $5,000 annually depending on your business size.

This brings the startup costs to $15,000-100,000.

Setting Up Your Car Hauling Business

These are the key steps to start a car-hauling business that is successful:

Select your car-hauling business model

There are two types of auto hauling companies: customer-based and contract-based.

Contract-based businesses regularly transport cars for a particular company or dealership. Although this type of business is more predictable and stable, it can be difficult to start.

A customer-based business, on the other hand, works with customers who need their cars to be transported. This type of business can be more flexible but less predictable.

Define your budget

You will need to have money in order to start your trucking company.

Calculate the amount that you have. Consider borrowing money from your bank or family members if it isn't enough.

You can also look for investors or a partnership. You must first have a business plan in either case.

Find out more about the industry

After you've decided what type of business you want to run, you can start researching the market, other trucking companies, and the ideal clients.

Avoid legal problems down the line by finding out which business license or permit is required in your province or state.

Also, you will need to study the regulations for auto transportation. You can find this information at your local Department of Motor Vehicles or Transportation Department.

In general, you'll need:

  • Commercial driver's license (CDL).
  • Allows cars to be transported across state lines
  • Dealer Transport License (if you're transporting cars for dealerships)
  • International Registration Plan (IRP), apportioned plates (especially for cars being transported across jurisdictions).

It is also important to study your competitors in order to answer three key questions.

What are they doing right?

Many successful trucking companies are already in existence. Learn from them what works well for your business so you can emulate their success. You don't have to invent the wheel.

What is their mistake?

You can make your startup stand out by learning what other car-transport businesses are doing wrong and then make improvements.

This information can be found through customer complaints via review platforms and face-to-face interviews of potential customers.

How can I make my mark?

This information can be used to create your key value propositions once you have seen how your company is different from other companies.

If your competitors are notorious for late delivery, early delivery could be a key value proposition that you can leverage.

Find your operating authority (MC + DOT numbers)

Next, you will need your Motor Carrier number (MC) and Department of Transportation number (DOT). These numbers are required to legally operate as interstate carriers.

A unique identification number is assigned to trucking companies by the Department of Transportation (DOT number). It's used to monitor compliance with safety regulations.

You will need to complete an application to get a DOT Number. The application will ask for basic information about your business such as the name of your company and your address. There is no charge.

Fill out the Federal Motor Carrier Safety Administration's (FMCSA) application to get your MC#. Applying for an MC Number is free.

Important note: Your DOT number will not be valid unless you purchase your trucks and insure them within the first 30 days. Your new company could be closed before you start.

Make a business plan for your car-hauling company

Next, you need to prepare a business plan for car hauling. This plan is essential to obtain funding from investors, keep track of your business's progress and make any necessary improvements.

This document will describe your business goals and strategies as well as how you plan to achieve them. Include these elements in your business plan:

  • An executive summary
  • Your business's goals and objectives
  • Market analysis
  • Your marketing strategy
  • Financial projections

Although creating a business plan can seem overwhelming, there are many resources that will help you. The Small Business Administration provides a detailed guide that will help you navigate through every step of creating your business plan.

Register your transport business

To operate legally, your business must be registered.

To set up your company, you may need to consult a certified tax professional or business consultant.

Your Employer Identification Number (EIN), will need to be obtained from the Internal Revenue Service.

Make sure you have the right equipment

It is important to buy equipment for your business.

A large truck or trailer is necessary to transport at most one car if you are starting a customer-based company.

To secure your car during transportation, you will need to have some basic tools such as tie-downs and straps.

A fleet of trucks and trailers is necessary for contract-based businesses. To store the cars that you transport, you will need storage space such as a garage, warehouse, or other facilities.

Assess the equipment that you have before you purchase new equipment. You may be able to lease rather than buy new vehicles in order to cut costs. As your business grows, you may be able to purchase your vehicles as necessary.

Here is a list of equipment that you will need:

  • Electronic logging device
  • Vehicles: semis or pickup trucks, car haulers
  • A warehouse is storage space.
  • Straps and tie-downs
  • Toll transponders
  • Business cards

Protect your clients' cargo, trailers, and vehicles with insurance

A key step in securing the right insurance for your business is getting it.

Two types of insurance are required: cargo insurance and liability insurance.

Insurance that covers liability protects you from any damages caused to property or other persons while transporting a vehicle.

Cargo insurance covers damage to your car that occurs during transportation. It is proportional to the vehicle's value.

Uninsured or Underinsured Motorist coverage may be an option. This will provide protection if you are involved in an accident with someone who doesn't own insurance.

There are many factors that will affect the amount of coverage you require. It's best to have as much coverage as possible. This way, if anything does occur, you will be covered.

A commercial insurance company that specializes in trucking can provide insurance quotes. To get the best insurance deal, compare rates and shop around before you buy an insurance policy.

Get your business office set up

To track expenses and invoices, your company will require a business office.

An office needs a computer with internet access, a printer, and a filing cabinet.

Accounting software can be used to track your finances and generate invoices. There are many great accounting software programs available such as FreshBooks, QuickBooks, and Xero.

You will also need to be able to accept payments from clients. This could be done through a merchant account at a bank or credit-card processor. You might also consider an online payment system such as Stripe or PayPal.

Hiring employees

You will need employees if you want to grow your business. You must find the right people to help your business succeed.

You will also need to invest in dispatch systems and staff for customer service and scheduling.

Post ads on job boards such as Indeed and Monster to find the right employees. Be sure to verify references and run background checks when reviewing applications.

Once you have hired your employees, make sure to check in on them regularly to ensure compliance with safety regulations and driving regulations. This builds trust between the employer and employee.

Before you hire a driver, make sure to verify these essential qualifications

It is important to verify the driver's credentials before you hire them.

  • Commercial Driver's License (CDL) Class A Any person driving a vehicle that has a gross vehicle mass of more than 26,000 lbs. All vehicles over 26,000 lbs must have a CDL in America.
  • Experience or driving record. To ensure safety and reliability, it is important to conduct background checks.
  • Understanding of loading and unloading techniques including tie-down techniques. Also, how to correctly distribute weight.

How to market your car hauling business

Once everything is set up, you can market your car-hauling business.

Word-of-mouth marketing is the best way to achieve this. Ask your friends and family to tell their friends about your business.

A quality website is also important. Customers will find your business easier if your website is well-designed. Many companies can help you create a website that attracts customers.

Start Hauling Cars

Once you have completed each step, it is time to begin hauling cars.

To get clients on a consistent basis, you can join a load board.  

Contact local car dealers and auto transport companies to find clients. They need a car transporter to move vehicles from one place to the next.

Make sure you give them your rates and tell them what services they offer. Before you give them rates, find out what other owners-operators are charging.

You can also contact auto auctions to inquire if you need a car transporter to transport your vehicles to the auction site.

How to make your car hauling business more profitable

Most businesses are more difficult to manage than those that were started. Because most business owners can't generate continuous profits, it is more difficult to maintain a business.

These three steps will ensure your car hauling business lasts a long time.

First, get GPS tracking for your cars. You can track your vehicles' location and make sure they arrive on time. This may seem expensive, but it is a small price to be paid to please your customers.

Create a standard operating procedure for your business. This will streamline your business operations and make them more efficient.

Third, make sure you invest in quality marketing materials such as flyers, business cards, and websites. This will allow you to attract more customers and help grow your business.

Where can I find the best car haulers for my business?

You've found the right place if you are looking for a professional and reliable car hauler to hire.

Move Car Auto Transport is a reliable and trustworthy car transporter with many years of experience in transporting and shipping cars. We're happy to assist you with any type of vehicle shipment and answer any questions. For more information, please contact us.