Car hauling is transportation of cars on a trailer or a dually truck from one place to another. The purpose of car hauling can be many and for different reasons. In earlier times, the industry was majorly unrecognised and unorganised but in the last few decades it has become a robust and competitive industry for many reasons.
You can start your own car hauling business with the help of tips given in this article. This article will help you in creating a business plan for multiple car hauling or just 1 car hauling business.
There are various purposes for which a car is hauled. They are:
- Transporting new car from manufacturing site to showrooms.
- Shipping a car to a far location where the customer resides.
- A car user shifting from one place to another which is usually far and difficult to drive all along
- Shipment of used cars for commercial purposes, etc.
There can be many more reasons for car hauling but major sources of business in this industry come from the above four reasons.
Car hauling market has also seen a lot of growth in the past few decades. The global market for was recorded at $12 billion in 2019. With a growth rate of 1.2% from 2014-19, the industry employs close to 57000 people in different roles.
Before you get into this business it is important for you to know whether you are made for this business or not. It is important to know the challenges around and whether it is worth your time.
This article will provide you the basics of car hauling and how you can start your own business. This will help you in getting insights of the industry and its working.
Car Hauling Business Requirements
There are certain things that are must in order to start your car hauling business. Here’s the list of requirements.
- Truck along with trailer or a dually truck
- Driver and supporting staff
- Authority or Permit for the business
- Registering your business
- Getting authority through FMCSA
- Obtaining your insurance
- Various permits like IFTA, UCR, ORP
- Getting your Commercial Driver License and other permits
- Medical Report and Drug Test
Other Necessary Requirements
These essential requirements are not something that is stated formally but is essential when you are starting a hauling business. These are:
- Necessary experience in car hauling industry or trucking industry
- Mentorship and assistance from someone already in the business
- Networking and contacts important to get new work
Some other Important Aspects
- Capital Cost and Expenditure
- Growth and Profit
Now, as we have mentioned all the necessary requirements for car hauling business. Let us discuss them one by one.
Truck along with Trailer or a Dually Truck
Car hauling requires a spacious trailer that can carry at least 7 cars. A dually truck can do the job for you. You need a truck that has the capacity to easily pull 7 cars both big and small in size. The engine therefore should be powerful. Dually truck comes with 2 extra wheels on the rear side that help in more traction control of the vehicle.
The length of the trailer should also be long and should be equipped with utilities necessary to hold and accommodate cars easily. Loading and unloading of the cars should be smooth to ensure they don’t get damaged in the process.
Generally, trailers are made so that you don’t require any external machine to load the cars on the trailer. There’s a ramp that comes down, allows the car to be driven on the ramp, then the car is locked using bolts and chains on the ramp and the ramp using hydraulics contracts and fits into the designated place in the trailer.
Whether you are purchasing a new truck-trailer or leasing it, ensure that it is strong and durable to withhold a high amount of load and flexible to sustain for a long period.
Driver and Supporting Staff
Driving such a long trailer would be difficult for any driver and therefore a trained and skilled driver is needed who can easily maneuver through the roads without getting many jerks that can have the potential of damaging the loaded cars.
Motor vehicle laws in the United States are different for different states but the general pattern is that you need a special license for driving heavy vehicles like truck trailers. Ensure that your driver has those licenses and also doesn’t have bad credit against his license. Commercial driver’s license is required to operate this business.
Other proper documents might also be required like fitness test report, anti-drug test report, etc.
Support staff is the one who will be assisting the driver through the whole journey. He will also be supervising the loading and unloading process, will help the driver in driving with proper instructions and sometimes will also be driving when the driver will be taking a break.
Your staff should be equally skilled and experienced in this field.
Authority or Permit for the Business
You will get your authority through Federal Motor Carrier Safety Administration or FMCSA by filling up the requisite form costing $300. The process is lengthy sometimes and requires various sorts of documentation.
The Unified Registration System is generally used to get your authority through FMCSA. Obtain all the requisite documents and for this your local attorney will be of help since each state has different criteria.
Authorities are of different kinds which can be interstate, intrastate or sometimes inter country as well. Based on your requirements you are free to obtain by submitting all the needed docs along with fees.
The administration will scrutinize them all and then will grant you the authority.
Other Permits like UCR, IFTA and IRP
Many times you will need extra permits like the above mentioned ones for various purposes especially when traveling longer distances. They are explained below.
UCR: Unified Carrier Registration system is a fund paid to the enforcement of laws related to motor safety. They are paid annually and are generally based on the size of your fleet.
IFTA: International Fuel Tax Agreement is for those who travel interstate and are required to pay the requisite tax amount quarterly through their home state.
IRP: International Registration Plan is an agreement between different states, the capital Washington DC and Canada aimed to ensure smooth travel. The tax is paid usually on the miles covered.
Heavy Vehicle Use Tax: When the cumulative weight of your vehicle crosses 55, 000 pounds or more then you are required to file this tax using form 2290. Some states also charge taxes based on additional weight when the vehicle travels through their states.
Registering your Hauling Company
If you are the sole proprietor then go for sole proprietorship or if you are in partnership then LLP would be fine. Get it registered by furnishing the required documents. Obtain your Tax identification number.
One of the most important aspects of your business is obtaining your insurance for the business. It is necessary because it helps you to overcome certain burdens in case of some mishap. It is obvious that no matter how good you render your services, chances are that you may suffer a certain loss.
Your client may demand money for certain damages which may not necessarily be to the car but it may be due to inordinate delay in transportation, etc. An insurance policy covering your cargo, your truck and driver is essential for safe work.
It is also necessary in order to start your business and those who will be associating with you as a broker will also look into your insurance cover. Insurance policies are generally costly and therefore you need to do proper research in choosing the right policy for you.
Other Necessary Requirements
Necessary Experience in Car Overhauling Industry:
No matter whatever you read from wherever, the essential element in this industry is experience. Experience helps you in mitigating all challenges.
Work for the industry with someone for sometime to gain experience on how things work. It will help you in understanding the process, the cost factor, the expense, profit aspect and much more.
You will also know the difficulty and challenges in this field closely. All this will help you in starting your own business.
Networking in the Industry:
It is the networking that will give you new work in the business. Networking will be built when you are into the business for sometime. Connect with people who matter. Learn from them and build a relationship where both of you gain something.
Managing everything all alone won’t be very easy for you. You need a mentor who will guide you in mitigating through challenges. Make good friendships with someone who is trustworthy and helpful in the industry.
Mentorship will help you in taking the right steps and avoiding mistakes. Especially when you won’t be getting new work, such mentorship will not only help you in getting new work but will also help you in calming down.
Other Aspects of Business
Capital Cost and Expenditure:
Your feasibility analysis report and business plan will calculate the probable expense. Cost and expenditure depends on the type and scale of business you are opening. Other factors also influence the expenses.
Truck and trailer will majorly cost you along with the cost of staff management. License permit and other legal formalities would be another source of expenditure. Be vigilant in expenditure and don’t spend where it is not needed.
Growth and Profit:
This industry takes time to grow and it is also applicable for you. Firstly you need to grow fully using one truck and trailer and when you feel that you are getting enough work on a regular basis then you can go for buying more trucks and hiring more drivers to drive for you.
Growth factor depends on the service you render. Advertisement is another aspect but it doesn’t work beyond a point. Goodwill and your service is the one that matters in the long run. Never compromise on these two and within few years you will be a successful business on your own.
1 Car Hauling Business
All the above mentioned documents and licenses are required for 1 car hauling. You need to follow the business plan accordingly. Follow the required formalities given in this article and start with 1 car hauling at the beginning. Later on you can grab other multiple car hauling opportunities. You can use your dually truck for one car hauling.
Marketing of 1 Car Hauling Service
As you are hauling only one car, you target audience is going to be very big as compared to multiple car hauling which has limited customers. Person who are moving from one state to other will require your service to for his/her car to be transported to his destination. Many people do not want to drive their own vehicle while migrating to other cities.
You can target those customers with the help of Instagram and FB demographics ads. Your service offering will be visible to your targeted audience in a matter of second.