How to Start a Car Hauling Business

The vehicle shipping industry had nearly $11 billion in revenue in 2022. The industry is growing at a rate of around 3% per year. Working as an auto transport driver in the US can earn an average salary of $51,450 annually. Do you want to know how to get started hauling cars? You must create a good name for your business and pay the right taxes and fees. Getting car hauling business insurance is necessary to protect and boost your income.

How to Start a Car Hauling Business

Are you wondering how to start a car hauling business and what steps to follow? Below is a list of steps to get your business up and running.

Name Your Business

When learning how to start transporting cars, you will want to take your time to figure out a good business name. Once you choose your business name, it may be expensive and time-consuming to change it. Pick a name that sticks out in the mind of your potential customers. Memorable names will also make your business easier to look up online. According to Statista, 21 percent of customers will use the internet to research a local business daily.

Choose a Target Customer

While learning how to start a car transport company, you will want to settle on a target customer. A business that tries too hard to appeal to everyone will often not appeal to anyone. You must communicate to customers the benefits you offer and the problems you solve. Customers will have no reason to choose you over the competition if you don’t stand out. You could position yourself to appeal to car dealerships to transport their vehicles. Sometimes people need their vehicles shipped far away and can’t drive it themselves. For example, a business might own vehicles that must be transported to different employees for work use.

Register Your Business

The next step in learning how to start a vehicle transportation business is deciding your business structure. Once you start doing business under a business name, you must register your business in your state. This will involve deciding how your business should be structured. Different business structures you could choose include:

  • Sole proprietorship: A sole proprietorship costs little to form and keeps you as the boss of your company. You retain all the profits of your business but must also cover business debts and are liable when the business fails. If you decide to change your business structure later

  • Corporation: A corporate business structure is owned by shareholders and exists separately from them. This means shareholders are protected from business liability and receive income through dividends. Corporate income is taxed twice, once on profits and second on the dividends they pay to shareholders. With a corporate structure, you have extra tools to raise investment, like issuing stocks. Issuing stocks is not available to other business structures like sole proprietorships and limited liability companies.

  • Limited liability company: An LLC has pass-through taxation, meaning you don’t have to be doubly taxed like a corporation. It also retains the liability protection of a corporation, making it a kind of middle-ground between a sole proprietorship and a corporation. Compared to a sole proprietorship, an LLC is more expensive to form and allows multiple members.

Get the Right Licenses

When researching how to start your own car hauling business, you should pay attention to the licenses and permits you need for your business.

  • Vendor license: This license is required for charging customers sales tax on your services.

  • Commercial drivers license (CDL): When operating a larger vehicle like a car hauling trailer, you must have a CDL

  • Federal Motor Carrier Safety Administration (FMCSA) registration: You must register with the FMCSA to obtain a US Department of Transportation number allowing you to transport vehicles safely. An FMCSA registration guarantees that you are complying with the appropriate safety regulations.

Get an EIN

Do you want to learn how to start a vehicle transport company? An essential step to starting this business is getting an employer identification number (EIN) from the IRS. This is the primary step to register your business on a federal level. With an EIN, you get recognized for tax purposes by the IRS and can hire employees and open business bank accounts. With a business bank account, you can raise your business credit score and access business loans. An EIN also lets you take advantage of tax benefits and file your taxes easier when tax season rolls around.

Purchase or Rent the Right Vehicles

When researching how to start a car hauling company, one of the most critical considerations is getting the right vehicle. You will need a vehicle hauling trailer to transport vehicles long distances efficiently. Hauling trailers that hold a single vehicle can cost $4,000 or more. However, if you want to transport many vehicles simultaneously, you will need a double-decker car hauler, which costs $20,000 or more, depending on its hauling capacity. Typically larger car haulers can transport 5 to 9 cars and carry up to 80,000 pounds.

Pay Taxes and Fees

Are you interested in how to start a business transporting cars? There are several fees you need to account for when starting this business. You will need to pay for your Department of Transportation registration fees and your heavy vehicle use tax. The Heavy Vehicle Use Tax is paid annually for vehicles over a certain weight. If your vehicle weighs between 55,000 and 75,000 pounds, it will cost you $100 plus an additional $22 per 1,000 pounds. Vehicles weighing over 75,000 pounds are charged a flat $550.

If you need to transport vehicles to another country, you may need to pay an International Registration Plan (IRP) fee or an International Fuel Tax (IFTA) agreement fee. The cost of these varies depending on the weight of your vehicle, the area you register in, and the duration of your registration. Your registration fee could cost you as little as $9 or higher than $1,300.

Hire Employees

Do you want to learn how to get into the car hauling business? In that case, you will want to look into hiring talented employees. You can help your clients and take on more business with more employees. You will want to hire truck drivers with CDL licenses who can take up your hauling work. As your business expands, you want to hire a bookkeeper to manage finances and payroll. An office assistant can answer the phone and order supplies you need, leaving you to focus on other aspects of the business.

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A car being pulled on a trailer bed.

How to Run a Successful Car Hauling Business

Are you interested in learning how to run a successful car hauling business? There are a few steps you can take, like investing in SEO and designing a website that will help you become more successful.

Design a Website

When deciding how to start a car carrier business, investing in a website can pay off. With a website, you have a 24/7 way for customers to read about your business and reach you. A website can attract customers to your business, building trust and credibility along the way. If a customer wants to search the name of your business but cannot find you online, you are missing out on a potential sale. People increasingly look to the internet for business reviews and answers to questions before purchasing. You can use a service like GoDaddy to purchase a website domain and host your site. You can design your website from a template or hire a professional web designer to customize your product. 

Market Your Business

Do you want to know how to start a car transport service? If people don’t know about your car transport service, then you will find it difficult to get your business off the ground. You should consider investing in marketing and advertising to boost your brand awareness and reach your target audience. You can do this by purchasing ads and paying for sponsorships. Online you can pay for pay-per-click ads. These ads direct users to your website through video ads or banner ads. Video ads play before videos on popular video sites like Youtube. Banner ads display on web browsers’ edges when visiting a popular site.

Look into Auctions

When learning how to start an auto transport business, don’t overlook vehicle auctions as a potential source of income. You will need to research auctions in your area to find where your potential customers might be. Since someone is likely to be buying at an auction, you may find work just picking up vehicles and delivering them to auction winners. One of the most popular auction networks in the world is Manheim. They have over 127 auction sites between traditional auction locations and digital channels in North America.

Invest in SEO

Search engine optimization (SEO) is the technique you use to increase your ranking on search engines like Google or Bing. By publishing content on your website, you can increase your visibility to potential customers when they search for certain keywords. You can target keywords related to industry topics or areas where you would want to find customers. With SEO, you don’t have to pay like you do for advertisements. SEO generates organic traffic that is of higher value. Higher-value traffic is more likely to be interested in your car-hauling business and make a purchase of your services.

Keep Improving Your Skills

As a car hauler, you must master your vehicles and machinery. When loading cars onto a trailer, it can be time-consuming work to load vehicles perfectly without damaging them. You will be working outside in different temperatures and weather conditions. It is hard work and can be very physically taxing. Securing vehicles requires slowly loading them and securing them with straps or chains. Car hauling can be a dangerous business. The average car weighs between 2,600 and 3,000 pounds. This weight can easily crush or seriously injure you if you are not careful.

How Much Do Car Haulers Make?

Car haulers make an average annual salary of $51,988 per year. Your salary typically ranges between $23,000 and $130,000 annually, depending on your location and experience level. Your average hourly wage will be $25 per hour as a car hauler. Below is a comparison of what you can expect to make on average as a car hauler in each state.

State Average Annual Salary Average Hourly Wage
Alabama $38,294 $18.41
Alaska $53,206 $25.58
Arizona $45,314 $21.79
Arkansas $41,493 $19.95
California $49,941 $24.01
Colorado $47,459 $22.82
Connecticut $52,397 $25.19
Delaware $47,458 $22.82
Florida $38,255 $18.39
Georgia $44,546 $21.42
Hawaii $54,471 $26.19
Idaho $43,009 $20.68
Illinois $49,353 $23.73
Indiana $45,328 $21.79
Iowa $53,515 $25.73
Kansas $46,679 $22.35
Kentucky $42,288 $20.33
Louisiana $46,663 $22.43
Maine $45,682 $21.96
Maryland $48,142 $23.15
Massachusetts $55,853 $26.85
Michigan $45,387 $21.82
Minnesota $55,966 $26.91
Mississippi $48,365 $23.25
Missouri $45,020 $21.64
Montana $43,625 $20.90
Nebraska $43,625 $20.97
Nevada $56,253 $27.04
New Hampshire $44,356 $21.33
New Jersey $47,924 $23.04
New Mexico $52,985 $25.47
New York $53,192 $25.57
North Carolina $41,750 $20.07
North Dakota $52,022 $25.01
Ohio $52,245 $25.12
Oklahoma $45,470 $21.99
Oregon $55,309 $26.59
Pennsylvania $44,509 $21.40
Rhode Island $52,241 $25.12
South Carolina $45,726 $21.98
South Dakota $52,061 $25.03
Tennessee $51,440 $24.59
Texas $44,339 $21.32
Utah $50,799 $24.42
Vermont $47,573 $22.87
Virginia $48,143 $23.15
Washington $53,599 $25.77
West Virginia $38,351 $18.44
Wisconsin $58,461 $28.11
Wyoming $45,539 $21.89

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Insurance Requirements for Boosting Income

Without the right insurance coverage, your business income might be exposed to events like lawsuits, theft, and property damage. By acquiring insurance protection, you can limit your liability and retain more business profits. Below are the recommended insurance policies for car-hauling businesses.

Business Owner’s Policy

Your business owner’s policy will combine general liability coverage and commercial property insurance. For this reason, it is considered one of the most comprehensive business insurance options. NEXT is one of the most affordable options for business insurance coverage. You can get a business owner’s policy with no hidden fees and the same coverage as their general liability policy. The company has an A- rating from AM Best and has served over 420,000 customers.

General Liability Insurance

General liability insurance protects your car hauling business against lawsuits related to slips and falls and other customer injuries. Typically it covers property damage, bodily injury, and advertising injury to third parties. Thimble is our top pick for a general liability policy. A-rated insurers back their insurance policies. With their expedited buying process, you can get a quote and purchase a policy in as little as 60 seconds. They offer short-term general liability insurance. This means you can set policy periods down to the day or hour. Thimble has an A+ rating from the Better Business Bureau.

Professional Liability Insurance

A professional liability insurance policy offers protection from business mistakes. This policy protects you if you don’t fulfill a contract with a client due to negligence or other causes. It also protects you when you infringe on someone else’s copyright. Hiscox is our recommendation for your car hauling business’s professional liability policy. They offer specialty insurance policies customized and tailored to your needs. They have a trusted service award from reviewer Feefo. Thanks to their flexible payment options, you can make monthly payments with no additional fees. Hiscox has an A rating from AM Best.

Commercial Property Insurance

Commercial property insurance protects your business equipment and building from physical damage. Typically, you will get coverage for events like wind damage, fire, lightning, theft, and vandalism. CoverWallet is an excellent choice for commercial property insurance. You can skip the insurance form and call them directly if you are short on time. They have an online digital platform with over ten trusted carriers. CoverWallet has an A+ rating from the Better Business Bureau.

Commercial Auto Insurance

Commercial auto insurance is necessary when using vehicles for business purposes. You will also need cargo insurance for your car hauling business, which protects the merchandise you are transporting. Commercial auto insurance generally protects against liability from vehicle accidents. It can help cover damage to your own vehicles through collision and comprehensive coverage. We recommend Tivly for commercial auto insurance. They help match you with policies from over 200 insurance partners. With Tivly, you are not spoiled for choice. You can purchase policies with the coverage you need, like gap insurance, uninsured motorist, and cargo insurance.

Workers’ Compensation Insurance

Your workers’ compensation policy will help your employees with medical costs related to injuries on the job. This policy also covers medical treatments, checkups, and medications related to occupational illnesses. Workers’ comp can supplement income for employees who miss work due to injuries. The Hartford offers workers’ compensation insurance and has over 200 years of underwriting experience. They employ nurse case managers for workers comp policies, allowing your employees to get help with their care every step of the way. With The Hartford, you can file online and track claims easily. They have an A- rating from AM Best and an A+ rating from the Better Business Bureau.

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