How to Start an Auto Transporting Business. Consumers, car dealers, and corporations across the globe rely on auto transporting businesses to move vehicles over long distances, thereby saving time, money, and wear and tear on their vehicles. And thanks to new technologies to make auto transporting more energy-efficient, it’s becoming even more popular as an eco-friendly way of moving cars. Starting an auto transporting business can be a rewarding endeavor, and requires both good management and sufficient investment capital. Read the steps below to learn how to start an auto transporting company.
You’re a good company driver with a solid two-year record of dependability and over-the-road excellence. You’re also the type of person that can’t help but stare lovingly at the truck on the next lane, the one with the 7-car carrier and the neatly stacked array of shiny, colorful vehicles. Well, then you’ve come to the right place.
Do you dream of owning your own car hauling business? As a trucker with valuable experience in your back pocket, that dream could certainly be a reality. You already have an advantage from your years of safe driving. And we’re here to help you make that dream come true. So, we put together a checklist that leads you to owning your car hauling company.
A CHECKLIST TO CAR HAULING BUSINESS SUCCESS
Getting your authority to start hauling cars is the same as getting your standard “for-hire” authority. Just make sure you have auto hauler elected as your commodity type. Don’t forget that part of the process of getting your operating authority is also about fulfilling all the federal and local/state legal requirements.
You’ll need a special car carrier trailer. Those are going to cost you. For example, a good condition used dry van would cost you approximately $20,000. By comparison, a good condition used 7-car hauler trailer would run you about $27,000. A brand new 7-car hauler trailer is in the $70,000 range.
As a car hauler, your load is high-value. That means more insurance coverage, especially cargo insurance. It’s standard for carriers and owner-operators to have $1 million in liability insurance and up to $250,000 in cargo insurance. An auto hauler will want to double that – $2 million in liability and at least $500,000 in cargo insurance. The key here is extra cargo insurance, as brokers and shippers will want to see more coverage to safeguard that valuable load.
HOW DO YOU WRITE AN AUTO HAULING BUSINESS PLAN?
WRITE YOUR BUSINESS PLAN
How do you write an auto transport business plan? The same way you write a business plan for all trucking companies. The same principles apply – Where will you network to find customers? What are your goals? How do you plan to grow? What do you project to be your company’s expenses and profits? How do you plan to build a successful auto hauling company? Apex can help you here, too. Download our “How to Write a Business Plan” guide and watch our business plan videos for in-depth, step-by-step pointers.
PREPARE FOR THE RISK
Keep in mind that hauling seven or more cars can be good money. But with a bigger paycheck comes some bigger risks, one being that you probably won’t get paid right away. That’s where Apex freight factoring comes in. Factoring your auto hauling freight bills can alleviate the cash flow headache. Especially since in the auto hauling business under payment is common. If a car is damaged during the haul, or if there is a last-minute change in the number of cars you are contracted to haul – both can lead to under payment.
“Car hauling by nature is riskier,” says Dax Johnson, Account Executive at Apex Capital. “You need to always pay attention to the weather, the driving conditions, and exactly where you are driving. All those things translate to potential damage on the autos. You always want to know who you are hauling for but pay extra attention in auto hauling because the risks are magnified.”
How to Start an Auto Transporting Business
- Determine what type of auto transporting business you want to start. There are auto transporting businesses that provide open car transport for regular vehicles, specialized auto transporting businesses that offer enclosed car transport for vintage and exotic vehicles, and those that provide both types. Open car transport utilizes car haulers on which the vehicles are exposed to the elements, while enclosed car transport makes use of special car haulers that are sealed on all sides to protect the cars inside.
- Investigate the competition in your area. If a competitor already covers a large part of the market, consider specializing in one specific niche such as vintage car transport
- Obtain your commercial driver’s license from the appropriate department in your state
- Draw up a business plan that includes your start-up costs, projected revenue, market, business strategy, and marketing plan.
- Raise investment capital by presenting your business plan to private investors or your bank
- Get your motor carrier number and transportation license. In most countries, these are issued by the Department of Transportation.
- Buy cargo and liability insurance. When starting an auto transporting business, you’re required to carry insurance on each cargo, though the amount will vary depending on your location.
- Choose a location for your auto transporting business. You’ll need good access to major routes as well as sufficient room to load and unload the car haulers. Check with your city to make sure you comply with local zoning laws.
- Have a lawyer draw up auto transporting agreements, and employee contracts if you are planning to employ staff.
- Purchase the necessary equipment.
- For a regular auto transporting business, purchase at least one open car hauler.
- For a specialized auto transporting business, purchase at least one enclosed car hauler, a winch, hydraulic liftgate, and high-strength tie-down straps.
- Approach auto transporting brokers to be included on their subcontractors’ list. This means that they can hire you to transport cargo for them.
- Advertise your business in local media, as well as on the Internet.
- Open your auto transporting business.
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