How to Start a Car-Hauling Business

by Chosen Caleb
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Ever wondered how cars are transported from one place to another for delivery? Well, this is done through car hauling. Car-hauling is the use of trucks to transport cars from one location to another. So many reasons can arise for one to move their cars, which include auctions, repairs, or individual deliveries. It is a lucrative business, and this article aims to guide you on how to begin one.

Photo by Mike Bird on Pexels

Why Should I Venture into the Car-Hauling Business?

You might ask yourself, Is it really worth it to start a business like this? Well, here are various reasons you should do so:

1. High Demand

It is estimated that tens of millions of cars are transported across the USA every year, which shows how high the demand for car-hauling services has become. Because there is a rise in sales of automobiles, there has been a high demand to get them moved to their buyers; so, the need for car-hauling services has been on the rise. Also, the increase in automobile ownership means an increase in faulty vehicles, which means a demand for car-hauling services.

2. Highly Lucrative

From the first point mentioned above, the rising demand means that car-hauling businesses are very profitable in the long run. One of the many ways that you can make huge returns from this business is by hauling high-value vehicles. Moreover, sources state that the car-hauling market size is expected to grow at a 2.7% CAGR, reaching an estimated $10.89 billion. According to CitizenShipper’s, hauling a car in the USA can cost as much as $680. Another source states, however, that it can be as high as $950. This is enough proof of how profitable car-hauling is.

3. Helping Others

This, to me, is the most important reason why any kind of business should begin. Car-hauling businesses are value-creating businesses. The hassle of how to get a car delivered or tow faulty vehicles stuck in the middle of nowhere is taken away from people’s minds when they know there is a car-hauling business around to help with those things. It also creates job opportunities for those who are in need. I dare say that adding value to people through your services is more important.

4. High Profit Margin

There is a high profit margin that owners of car-hauling businesses enjoy. Not many losses are incurred in this type of business, and an estimated 20–90% profit can be made from each car hauled. However, this is quite dependent on the distance taken to haul the cars.

5. Opportunity to Travel and Business Growth

The car-hauling business offers an opportunity to easily expand. This is because, as you deliver the cars, you get the chance to see more customers and advertise your business to various states around the country you operate in. Also, for those who love to travel, the car-hauling business provides an avenue for you to “sight see.”

However, no matter how good it sounds to venture into a business, do bear in mind that there are always cons associated with it, and car-hauling businesses are not exempt. Below is a list of issues that you can face as a car-hauling business owner.

  • Getting licensed can be rigorous, expensive, and tough.
  • It is highly location-dependent.
  • High cost of maintenance and servicing of the car-hauling trucks.
  • It is highly competitive.
  • It can be physically demanding.
  • It is a highly regulated business.

How do you start the business?

Now that you have seen reasons to start (or not to start) a car-hauling business, here is a guideline showing you step-by-step actions you can take to ensure you successfully begin.

1. Carry out Market Research

Market research will give you an upper hand over other car-hauling businesses. It will also give you a good understanding of who your competitors are, how you should carry out your services, your target market, where your business will be situated, and your business landscape.

2. Create a Business Plan

The next thing to do is to create a suitable business plan that shows how you want the car-hauling business to be detailed. In your business plan, your niche should be defined (what kind of vehicles do you want to haul); your financial projections should also be made known; and so should your marketing strategy. Making a business plan might be a bit complicated, but this article will help you make a proper business plan.

3. Obtain the Necessary Permits

For car-hauling businesses, there are certain licenses and permits that are needed to be allowed to carry out operations. Based on the nature of the car-hauling business you want to start, you can decide to get a CDL-A license (for heavy vehicles) or a CDL-B license (for medium vehicles). You can also register with the local road safety authorities in your region. For those in the USA, the FMCSA team can also help you register the necessary documents.

4. Source for Capital

If you do not have funding to start the car-hauling business, it is important to source funding using different means. It is important to calculate the costs needed and then pull funding from either family and friends, angel investors, personal savings, bank loans, and so on. It is important to note that a well-structured business plan is sure to attract investors to your car-hauling business.

5. Buy the Hauling Equipment

After sourcing funds, the necessary equipment needed for car-hauling should be purchased. What equipment should you get?

  • Truck
  • Trailer
  • Ramps
  • Wheel Chocks
  • Wheel Straps
  • Tow Straps and Chains
  • Winch
  • Software Gadgets

These are just some (not all) of the types of equipment you should get for your car-hauling business. It is important to meet someone who has experience in car-hauling to know the other types of equipment you should get.

6. Build your Brand

After setting up your car-hauling business, you need to brand it to set it apart from other ones. It is important to create a logo for your business, open social media accounts, etc. Also, market your services, develop a strong customer base, offer competitive prices and unrivaled customer service, and build trust with your customers. These things are what build your brand and set you apart.

What kind of trucks should be used?

Since you now know how to start a car-hauling business and that trucks and trailers are the most important equipment to have, we would like to give you suggestions on what type of truck or trailer to use.
The size and model of truck or trailer you want to use are largely dependent on the type of car you want to haul. You also need to determine whether you want an open or enclosed truck or trailer. Also, it is important to get a fuel-efficient truck or trailer due to long-distance hauling. Then, it is important to take into consideration the number of vehicles you want to transport. For one car, it is important to get a single-axle trailer, and for multiple cars, it is important to get a double-axle trailer. However, it is important to seek professional advice on the type of truck to buy whenever you are ready. You can check out car-hauling trucks to buy here.

Countries where car-hauling business will thrive

It is important to note that the success of a car-hauling business in a particular country is dependent on geographical diversity, developed infrastructure and logistic networks, economic growth, and market competition. Below are a few countries where car-hauling businesses can thrive based on the factors above:

  • The United States of America
  • Canada
  • Japan
  • China
  • Australia
  • Germany
  • The United Kingdom

You can also seek to start up the business in developing regions of the world, like India, Nigeria, and so on, for maximum profit.

Popular Car-Hauling Businesses

Here is a list of popular car-hauling businesses you can find around:

Although most of these companies are based in the USA, it is important for you to go through their history, know how their services are offered, and so on to be able to know how to model your car-hauling business.

Conclusion

A car-hauling business is one that has proven to be profitable in the long run. It is important to note that networking with other car-haulers, investing in driver training, and keeping up with industry trends are vital for the growth of your business.

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