How to Start a Small Car Hauling Business Successfully

how to start a small car hauling business

Running your own car hauling business can be a profitable venture, but it’s important to know the necessary steps to get started. Car hauling involves the transportation of vehicles from one place to another, and as a business owner, you’ll be responsible for loading and securing the vehicles on a trailer. To start a car hauling business, you can choose to work with a broker, find your own customers, or work for an auto transport company. It’s important to consider the pros and cons of owning a car hauling business and decide whether you want to work independently or with a reputable company. Some of the key steps to starting a car hauling business include obtaining a CDL-A license, obtaining the necessary legal authority, creating a business plan, understanding the costs involved, acquiring proper insurance coverage, gaining experience in loading and unloading vehicles, and obtaining the required permits and registrations. By following these steps, you can lay a solid foundation for your small car hauling business.

Key Takeaways:

  • Starting a small car hauling business can be a profitable venture.
  • Consider working independently or with a reputable company.
  • Obtain a CDL-A license and the necessary legal authority.
  • Create a business plan and understand the costs involved.
  • Acquire proper insurance coverage and gain experience in loading and unloading vehicles.
  • Obtain the required permits and registrations for legal operation.

Obtaining the Necessary License and Authority

Starting a car hauling business requires obtaining the necessary license and authority to operate legally. One of the first steps is to obtain a CDL-A license, which is essential for driving commercial vehicles. Having a CDL-A license not only enables you to transport vehicles but also helps you secure insurance coverage at a lower cost.

Additionally, you need to obtain a standard “for-hire” authority to meet state and federal legal requirements. This authority allows you to operate as a car hauling business and transport vehicles for customers. It’s crucial to comply with these regulations to avoid penalties and ensure the smooth operation of your business.

To ensure your car hauling business is well-prepared, it’s essential to develop a comprehensive business plan. This plan should outline the types of vehicles you’ll be hauling, your target market, marketing strategies, and financial projections. A well-developed business plan not only helps you stay organized but also increases your chances of success by guiding your decision-making process.

Creating a Realistic and Comprehensive Business Plan

“A well-developed business plan not only helps you stay organized but also increases your chances of success by guiding your decision-making process.”

If you’re unsure about creating a business plan, consider seeking professional help. A business consultant can assist you in crafting a realistic and comprehensive plan that addresses all aspects of your car hauling business. This includes financial considerations, marketing strategies, and operational procedures. Remember, a solid business plan is the foundation for your success.

Understanding the Costs and Insurance Requirements

When starting a car hauling business, it’s crucial to have a clear understanding of the costs involved. By carefully considering these expenses, you can ensure proper budgeting and financial planning for your venture. Some key costs to consider include:

  • Equipment Costs: This includes the purchase or lease of a truck and trailer specifically designed for car hauling. Additionally, you may need to invest in equipment for loading and securing vehicles.
  • Fuel Expenses: Fuel costs will be a significant portion of your ongoing expenses, so it’s important to factor in fuel prices and estimated mileage when determining your budget.
  • Maintenance and Repairs: Regular maintenance and unforeseen repairs are a part of owning a car hauling business. It’s important to budget for these expenses to ensure the safety and reliability of your vehicles.
  • Labor Costs: If you plan to hire employees or drivers, you’ll need to consider wages, benefits, and payroll taxes as part of your operating costs.

In addition to the costs associated with running a car hauling business, it’s vital to have the appropriate insurance coverage. Liability insurance is crucial in the event of any accidents or damage that may occur during transport. Generally, car hauling businesses are required to have liability insurance coverage of around $2 million. This insurance protects you and your clients in case of property damage or bodily injury during the transportation process. It’s also important to consider obtaining cargo insurance, which covers the vehicles you transport in case of theft, damage, or loss.

Proper insurance coverage is not only a legal requirement but also provides peace of mind and financial protection for your business. Make sure to research insurance providers that specialize in car hauling businesses to find the coverage that best suits your needs.

Cost Category Estimated Amount
Equipment Costs $50,000 – $150,000
Fuel Expenses $0.50 – $1.00 per mile
Maintenance and Repairs $2,000 – $5,000 annually
Labor Costs $30,000 – $60,000 per year

“Having a thorough understanding of the costs involved in a car hauling business is crucial for financial success. By budgeting for equipment, fuel, maintenance, and labor, you can ensure that your business remains profitable. Additionally, obtaining the necessary liability and cargo insurance will protect you and your clients in case of any unfortunate incidents during transport.” – Car Hauling Business Owner

Acquiring Permits and Registrations

Starting a car hauling business requires obtaining various permits and registrations to ensure legal compliance and smooth operation. These include fees and taxes such as Unified Carrier Registration (UCR), International Fuel Tax Agreement (IFTA), International Registration Plan (IRP), Heavy Vehicle Use Tax (HVUT), and Department of Transportation (DOT) fees. In addition, you will need an MC Number assigned by the Federal Motor Carrier Safety Administration (FMCSA) to identify your business.

Completing the necessary paperwork and paying the required fees for these permits and registrations is crucial. Failure to do so can result in penalties, fines, and potential disruptions to your business. Keeping track of renewal dates and ensuring timely submission of fees and taxes is essential to maintain compliance.

Here is a comprehensive breakdown of the permits and registrations needed for a car hauling business:

Permit or Registration

Permit/Registration Description
Unified Carrier Registration (UCR) A state-operated registration program that requires carriers to pay an annual fee based on the size of their fleet.
International Fuel Tax Agreement (IFTA) A cooperative agreement among states in the United States and Canadian provinces that simplifies fuel tax reporting for carriers operating in multiple jurisdictions.
International Registration Plan (IRP) A reciprocal agreement among states that allows interstate carriers to register their vehicles once and obtain a single apportioned license plate.
Heavy Vehicle Use Tax (HVUT) A federal tax imposed on vehicles with a gross weight of 55,000 pounds or more that use public highways.
Department of Transportation (DOT) Number An identification number assigned by the FMCSA to track a carrier’s safety and compliance record.
Motor Carrier (MC) Number A unique identifier assigned by the FMCSA to carriers involved in interstate commerce.

By acquiring these permits and registrations, you can ensure that your car hauling business operates legally and avoid potential penalties or disruptions. It is crucial to stay updated on any changes in regulations and renew your permits and registrations on time to maintain compliance.


Starting a successful car hauling business requires careful planning and diligent execution. By following the steps outlined in this guide, you can establish a small car hauling business that has the potential to thrive in a competitive industry.

When starting your own car hauling business, it’s important to remember that success doesn’t happen overnight. It takes time to build a solid reputation and a loyal customer base. However, with perseverance and a commitment to providing excellent service, your small car hauling business can gain momentum and grow.

Here are some essential tips to keep in mind for your car hauling business:

  • Invest in quality equipment and maintain it properly to ensure the safe transportation of vehicles.
  • Establish strong relationships with brokers, dealerships, and customers to secure regular business.
  • Stay up-to-date with industry trends and regulations to ensure compliance and provide the best service.
  • Focus on providing exceptional customer service to build a positive reputation and gain repeat business.

Remember, starting a small car hauling business is a journey, and there will be challenges along the way. Stay determined, adapt to changes in the market, and continuously strive for improvement. With a solid foundation and a dedication to success, your car hauling business can become a profitable and rewarding venture.


What license do I need to start a car hauling business?

You will need to obtain a CDL-A license, which allows you to operate commercial vehicles, including car haulers.

What legal authority do I need for a car hauling business?

You need to obtain a standard “for-hire” authority to meet state and federal legal requirements for operating a car hauling business.

How can I create a business plan for my car hauling business?

Consider seeking professional help to create a realistic and comprehensive business plan that outlines your goals, target customers, and growth strategies.

What costs should I consider when starting a car hauling business?

It’s important to consider initial costs, ongoing expenses, and future projections to establish a budget for working capital, daily operating costs, and unexpected expenses.

What insurance coverage do I need for a car hauling business?

Car hauling businesses typically require liability insurance of around $2 million and cargo insurance of $500,000 due to the high-value nature of the vehicles being transported.

What permits and registrations are required for a car hauling business?

You will need to obtain various permits and registrations, including Unified Carrier Registration (UCR) fees, International Fuel Tax Agreement (IFTA) taxes, International Registration Plan (IRP) taxes, Heavy Vehicle Use Tax (HVUT), Department of Transportation (DOT) fees, and an MC Number assigned by the FMCSA.

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