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Written by: Carolyn Young
Carolyn Young is a business writer who focuses on entrepreneurial concepts and the business formation. She has over 25 years of experience in business roles, and has authored several entrepreneurship textbooks.
Edited by: David Lepeska
David has been writing and learning about business, finance and globalization for a quarter-century, starting with a small New York consulting firm in the 1990s.
Updated on March 22, 2023
Investment range
$6,950 - $14,600
Revenue potential
$180,000 - $900,000 p.a.
Time to build
1 – 3 months
Profit potential
$130,000 - $180,000 p.a.
Industry trend
Growing
Commitment
Flexible
If you’re a truck driver, you may have thought about taking control and starting your own business. The US car hauling industry is worth nearly $11 billion, so there is money to be made shipping cars from one place to another. You’ll have to get a truck and an operating license, but you should get an excellent return on that investment. You can start by running your business from home, and later grow your company with a fleet of trucks.
No matter how much truck driving experience you have, however, you can’t start a business without some business savvy. Luckily, this step-by-step guide lays out all the ins and outs of a car hauling business, getting you ready to launch your new company.
Looking to register your business? A limited liability company (LLC) is the best legal structure for new businesses because it is fast and simple.
Form your business immediately using ZenBusiness LLC formation service or hire one of the Best LLC Services.
Starting an auto transport business has pros and cons to consider before deciding if it’s right for you.
Trends in the car hauling industry include:
Challenges in the car hauling industry include:
Startup costs for a car hauling business range from $7,000 to $15,000. The largest expense is a down payment on a 7-car hauler trailer, which can run from $35,000 used to $70,000 or more for a new one.
| Start-up Costs | Ballpark Range | Average |
|---|---|---|
| Setting up a business name and corporation | $150 - $200 | $175 |
| Business licenses and permits | $100 - $300 | $200 |
| Insurance | $100-$300 | $200 |
| Business cards and brochures | $200 - $300 | $250 |
| Website setup | $1,000 - $3,000 | $2,000 |
| Hauler Trailer Down Payment | $5,000 - $10,000 | $7,500 |
| Licensing and operating authority costs | $400 - $500 | $450 |
| Total | $6,950 - $14,600 | $10,775 |
Typically, you can charge $300 to $700 per car, but this can be much higher for long-distance hauls or expensive cars. These calculations will assume $500 per car. Your profit margin after fuel and maintenance should be about 70%.
In your first year or two, you could do one 7-car haul per week, bringing in about $180,000 in annual revenue. This would mean a tidy profit of nearly $130,000, assuming that 70% margin. As you expand your fleet sales could climb to 5 hauls per week. At this stage, you would rent a commercial space and hire drivers and staff, reducing your margin to 20%. With annual revenue of over $900,000, you’d still make a cool $180,000.
There are a few barriers to entry for a car hauling business. Your biggest challenges will be:
Now that you know what’s involved in starting a car hauling business, it’s a good idea to hone your concept in preparation to enter a competitive market.
Market research will give you the upper hand, even if you’re already positive that you have a perfect product or service. Conducting market research is important, because it can help you understand your customers better, who your competitors are, and your business landscape.
Research car hauling businesses in your area to examine their services and price points. You’re looking for a market gap to fill. For instance, maybe the local market is missing a long-distance car hauler.
You might consider targeting a niche market by specializing in a certain aspect of your industry, such as used cars.
This could jumpstart your word-of-mouth marketing and attract clients right away.
You need to determine if you want to do interstate hauling as well as local hauling. You’ll also need to decide if you want to haul just multiple loads for dealers or if you want to ship individual cars for consumers.
Car hauling prices range from $300 to $700 per car, but these prices could be higher for long-distance hauls or more expensive cars. When you’re working by yourself, after fuel and maintenance, your profit margin should be around 75%.
Once you know your costs, you can use this Step By Step profit margin calculator to determine your mark-up and final price point. Remember, the prices you use at launch should be subject to change if warranted by the market.
Your target market is likely to be car dealers. You can find them by networking or advertising on LinkedIn or just calling on them directly. You can also offer services to private buyers and sellers and find them on sites like Facebook.
In the early stages, you may want to run your business from home to keep costs low. But as your business grows, you’ll likely need to hire workers for various roles and may need to rent out an office. Find commercial space to rent in your area on sites such as Craigslist, Crexi, and Instant Offices.
When choosing a commercial space, you may want to follow these rules of thumb:
Your business name is your business identity, so choose one that encapsulates your objectives, services, and mission in just a few words. You probably want a name that’s short and easy to remember, since much of your business, and your initial business in particular, will come from word-of-mouth referrals.
Here are some ideas for brainstorming your business name:
Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these.
Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. Your business name is one of the key differentiators that sets your business apart. Once you pick your company name, and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.
Every business needs a plan. This will function as a guidebook to take your startup through the launch process and maintain focus on your key goals. A business plan also enables potential partners and investors to better understand your company and its vision:
If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist to create a top-notch business plan for you.
Registering your business is an absolutely crucial step — it’s the prerequisite to paying taxes, raising capital, opening a bank account, and other guideposts on the road to getting a business up and running.
Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business!
Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you are planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to car hauling businesses.
If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state.
Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your car hauling business will shape your taxes, personal liability, and business registration requirements, so choose wisely.
Here are the main options:
We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization, and answer any questions you might have.
Choose Your State
The final step before you’re able to pay taxes is getting an Employer Identification Number, or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN.
Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.
The IRS website also offers a tax-payers checklist, and taxes can be filed online.
It is important to consult an accountant or other professional to help you with your taxes to ensure you are completing them correctly.
Securing financing is your next step and there are plenty of ways to raise capital:
Bank and SBA loans are probably the best option, other than friends and family, for funding a car hauling business.
Starting a car hauling business requires obtaining a number of licenses and permits from local, state, and federal governments.
First, you’ll need to obtain a commercial driver’s license from your state DMV. You’ll also need a Department of Transportation number and a Motor Carrier Authority number, both of which you can get by registering with the Federal Motor Carrier Safety Administration (FMCSA). Finally, you’ll need to complete a unified carrier’s registration, and if you plan to drive to other states or Canada, an International Registration Plan tag and an International Fuel Tax Agreement decal.
Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration (OSHA), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits.
You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more.
You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package. They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.
This is not a step to be taken lightly, as failing to comply with legal requirements can result in hefty penalties.
If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.
Before you start making money, you’ll need a place to keep it, and that requires opening a bank account.
Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your car hauling business as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.
Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account.
Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.
Here are some types of insurance to consider:
As opening day nears, prepare for launch by reviewing and improving some key elements of your business.
Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks.
You may want to use industry-specific software, such as Shipwell, Samsara, or SuperDispatch, to manage your loads, trips, payments, invoicing, and dispatching.
Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism.
You can create your own website using services like WordPress, Wix, or Squarespace. This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.
They are unlikely to find your website, however, unless you follow Search Engine Optimization (SEO) practices. These are steps that help pages rank higher in the results of top search engines like Google.
Some of your business will come from the casual online visitors, but still, you should invest in digital marketing! Getting the word out is especially important for new businesses, as it’ll boost customer and brand awareness.
Once your website is up and running, link it to your social media accounts and vice versa. Social media is a great tool for promoting your business because you can create engaging posts that advertise your products:
Take advantage of your website, social media presence and real-life activities to increase awareness of your offerings and build your brand. Some suggestions include:
Unique selling propositions, or USPs, are the characteristics of a product or service that sets it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your car hauling business meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire.
Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your car hauling business could be:
You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running a car hauling business, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in car hauling for years and can offer invaluable insight and industry connections.
The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in car hauling. You’ll probably generate new customers or find companies with which you could establish a partnership.
If you’re starting out small from a home office, you may not need any employees. But as your business grows, you will likely need workers to fill various roles. Potential positions for a car hauling business include:
At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need.
Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed, Glassdoor, or ZipRecruiter. Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent.
Car hauling is a great way for truck drivers to start their own businesses. In a $13 billion industry, you know that demand for your services exists as long as people are buying cars. You’ll be your own boss, completely in control of your time and your income, and you can make very good money.
It takes a bit of an investment, but you can see a huge return. You’ve now got some business savvy to combine with your truck driving skills, so go ahead and get on the road to your entrepreneurial destination.
A car hauling business can be extremely profitable. With a 7-car hauler trailer, you can make as much as $5,000 a load. If you work by yourself, your only expenses will be fuel and maintenance, so you’ll keep a lot of that cash in your pocket.
Your best bet is to call on car dealers directly. You can also network or advertise on LinkedIn to find dealership owners. If you want to haul cars for consumers, you can also advertise on Facebook.
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