How to Start an Auto Transporting Business
If starting an auto transporting business is a dream of yours, you should look carefully into the upfront expenses and profit potential before starting. The costs to start an auto transporting business are high compared to many other types of businesses, but depend on the type of auto transport you will specialize in. Read the following steps for a basic understanding of what is needed to start an auto transport business.
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Instructions
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Consider working as a driver or dispatcher for auto transporter or tow trucking company. Before you start your own auto transport company, it could be well worth your while to work for an existing auto transporter or even a car towing company. This will give you an introduction into the business. You will see how auto transporting companies actually work and decide if you really like the work involved before investing money of your own. The company may also provide initial training and licensing while working for it so that you do not have to start from scratch if and when you decide to start your own auto transport business.
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Find out about the competition. You will want to find out how competitive the auto transport business is in your area. In some places, the competition is very fierce and getting contracts can be quite difficult. You might decide opening your own auto transport business is not worthwhile if there is too much competition or you might find working with an existing auto transporter is more worth your while.
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Determine if you will be operating your business only in your state or within different states. If you will only be operating your auto transporting business in one state, license requirements are different than if you will be operating between states. Be sure to check with your state for details. If you will be operating your business in various states, you will need a USDOT number. This is a number that will identify your company for monitoring its safety information.
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Get an operating authority. You will need to obtain an operating authority, also known as FF, MC or MX number. The operating authority tells the type of operation you may run, where you are allowed to do business and what types of transportation can be done. You may need more than one operating authority. You may also need state operating licenses, in addition to federal licenses. Check this out with states where you will operate.
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Purchase auto transporters. Your major investment in starting an auto transport business will be purchasing the auto transporters like trailers and flatbeds. You might want to buy a few auto transporters or just one to start. This investment may be based on the success of your business.
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Obtain commercial driving licenses for drivers. You must get special licenses for your drivers to drive auto transporters. Auto transport drivers are highly regulated for safety. In addition to local and federal requirements, don't overlook local regulations for auto transporters.
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Get insurance on your transporters and cargo that you will haul. You must make sure to get enough insurance to cover your equipment and the cars or other cargo that you will transport. Look carefully into insurance options and interview companies that specialize in auto transporting. Costs vary depending on type of cargo and weight you will be hauling. Be sure to also get bonded.
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Lease office and parking space. Another expense you will have is a small office to run your business plus a garage or parking area to park your transporter when not in use. When selecting a location, look for a place that your transporters and equipment will be safe and secure.
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Find business. Finally, you are ready to start finding clients for your auto transport business. You can build up relationships with new and used car dealers and mechanics, for example. You can also make arrangements with an auto transport broker to help you bring in business.
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Tips & Warnings
This is a general guideline. Be sure to talk to professionals in your area to find out about additional licenses or insurance requirements. Be sure to talk to a business lawyer and accountant for general requirements for starting any business.
Starting an auto transport business is a big expense - think carefully before you start investing.
