How Do You Start a Car Hauling Business?

How Do You Start a Car Hauling Business?

If you dream of owning your own business and want work in the auto transport industry, you may want to start your own car hauling business. The pay is great and while demanding, you can set your own hours and runs. If you have a track record of safe driving and some experience under your belt, you can start your own car hauling business.

Before you get started, there are some things that you will need to do.

#1- Get Your Authority

The first thing you have to do is get your authority. The process is really no different from the standard process for obtaining authority, but you will need to select “auto hauler” as your commodity type.

You will need to meet all state and local legal requirements in order to obtain your authority. The process for obtaining operating authority includes:

#2 – Form Your Company

Before you can apply for authority, you must first form your company and get your EIN. The requirements to form a business will vary from state to state.

#3 – Applying for Authority Through the FMCSA

The next step is to apply for authority through the FMCSA using the Unified Registration System. The fee is $300 for each type of authority. You may also need intrastate authority in your home state, so be sure to research these requirements.

The process for obtaining authority is lengthy, and you will need to ensure that you have all of the appropriate documentation.

#4 – Obtain Insurance

Next, you will need to get insured. Securing an insurance policy can be a hurdle for many new trucking companies, but it is a necessary step. You cannot operate without insurance coverage. Insurance rates are typically high, so do your research and compare policies to find the best rates.

As a car hauler, you will be responsible for expensive cargo. Generally, auto haulers want double the coverage of standard owner-operator policies. Extra cargo insurance is a must, as brokers and shippers will want to see that you have adequate coverage to protect your loads.

#5 – Register for UCR, ORP and IFTA

Once you’ve obtained insurance, you will need to register for:

  • UCR: Unified Carrier Registration system. This is used to fund the enforcement of motor carrier safety laws. Fees must be paid annually and are based on the size of the fleet.
  • IRP: The International Registration Plan. This is a registration reciprocity agreement between states, Washington, D.C. and Canadian provinces. Fee is based on your annual mileage in certain jurisdictions.
  • IFTA: International Fuel Tax Agreement. Interstate motor carriers must file IFTA taxes quarterly through the taxing authority in your home state.

#6 – File Heavy Vehicle Use Tax (HVUT)

If your vehicle has a gross weight of 55,000 pounds or more, you will need to file a Heavy Vehicle Use Tax return, or form 2290. Some states require additional weight distance taxes if you plan to haul within those states. These states include: New Mexico, New York, Oregon and Kentucky.

#7 – Obtain the Right Equipment

In addition to authority, you will need the right equipment for the job. Do your research to estimate the cost of a car carrier trailer. A brand new car hauler trailer can cost upwards of $70,000 or more.

It’s important to do your research and weigh your options before purchasing equipment. Used equipment in good condition may cost less than half the cost of new equipment. Leasing options may also be available, although the carrier may require you to work with them.

#8 – Develop a Business Plan

As an owner-operator, you are in charge of your business, which means that you are also in charge of making sure that you have a steady line of work. Just like a sole proprietor, you will be responsible for developing your business, marketing your services and paying your taxes – as well as the other costs that come with running a business.

A business plan will serve as a roadmap to success. A thorough plan will include:

  • Where you will find customers
  • Your goals for your business
  • A plan for growth
  • Projections for expenses and profits

#9 – Finding Loads

Owner-operators who haul vehicles will need to find their own loads to keep their business running. Load boards are a great place to start. Some of the most popular auto transport load boards include:

In addition to load boards, drivers can also find work through:

  • Broker portals
  • Dealers
  • Auctions
  • Personal vehicle shipping

Once you have a solid business plan, your authority, insurance coverage and the right equipment, it’s time to put your plan to work and start generating revenue for your business.