Car accident tow truck drivers respond to stranded or abandoned vehicles, making them crucial and in-demand automotive professionals. Towing contractors can operate their businesses with the correct licenses and permits. If you enjoy driving and working with vehicles and would like to own your own business, consider a career as a towing contractor. What towing contractors do, their salaries and their job outlook are discussed in this article.
A towing contractor is a roadside assistance professional who performs towing services on behalf of another party. Their tow trucks are used to transport vehicles from one location to another. Businesses, agencies, and organizations hire towing contractors to meet their towing needs. Contractors sign agreements with their employers and perform services based on those agreements. It is possible for towing contractors to work for the American Automobile Association (AAA) or to have multiple employers under one contract.
What are the steps to becoming a towing contractor?
To start their towing businesses, towing contractors need commercial driving experience, the appropriate licenses, permits, registrations, and trucks. You can begin your towing business by following these steps:
1. Earn your class B driving license
You must obtain a Class B commercial driver’s license from the Department of Motor Vehicles (DMV) to drive a tow truck legally. The requirements for obtaining one vary by state, but almost all include passing a driving test and a written test. Your license should be renewed every five to eight years, depending on your condition.
2. Make sure your business is registered
Decide what type of business you wish to start, a sole proprietorship, limited liability company (LLC), or corporation, and then register it with the state. There are different tax and structural requirements for each. If you are a sole proprietor, you can register your business with your county clerk. The secretary of state’s website can register an LLC or a corporation. Next, register your business with the IRS for a federal tax identification number.
3. Purchase tow trucks
Being a towing contractor requires owning a tow truck. The different types of tow trucks include hook-and-chain tow trucks, flatbed tow trucks, and wheel lift trucks. According to the kind of truck, whether it’s new or used, and its features, these trucks’ prices can range from less than $50,000 to more than $100,000. Most truck dealers offer financing to help you purchase your tow truck. You might also obtain a small business loan to finance this purchase. Additional trucks and equipment might be necessary as your business grows.
4. Obtain the necessary permits and licenses
The majority of states require towing contractors to have special permits to operate legally. Typical permits include:
- An indictment management permit allows you to tow vehicles without the vehicle owner’s consent when requested by law enforcement.
- A private property permit, which allows you to tow vehicles as requested by a parking facility owner without the vehicle owner’s permission.
- A consent tow permit allows you to tow a vehicle with the owner’s permission.
A few states also require that towing contractors obtain overweight or oversize vehicle permits for their trucks. You can find out which permits you to need from your county clerk.
5. Obtain an insurance policy
Get policy quotes and buy insurance for your towing business by contacting insurance providers. To protect your business from lawsuits, you should have liability insurance and business auto insurance. In most states, towing contractors must be insured, and employers are more likely to hire insured towing contractors.
6. Locate a business location
Make sure you have a place to park your tow trucks and a place to run your business. Owning a business property requires obtaining a certificate of occupancy verifying that it complies with local zoning and building codes. Make sure the property owner has a certificate of occupancy that allows you to operate a tow truck business there.
7. Obtain towing contracts
Once your towing business operates legally, you will need to market yourself to partners and gain contracts with other companies. Reach out to organizations like:
- Automobile roadside assistance companies.
- Automobile dealerships.
- Petrol stations.
- Auto repair shops.
- Insurance firms.
- Locations such as parking lots, apartments, and shopping malls.
- Police stations.
- Other local government agencies.
Your services may also need to be advertised in newspapers and directories, online, on the radio, and via flyers, if you want to attract clients. If you’re going to tow for AAA, you can also become certified by them. Offering roadside services such as tire changes, fuel deliveries, and jump-starts can make your business more appealing to customers.
Salary and job outlook for towing contractors
According to Indeed Salaries, towing contractors earn an average base salary of $69,404 per year. Based on the contractor’s location and size, the figure will vary. For example, a towing company in a heavily populated urban area might earn more than one in a rural area. Because of the difficult driving conditions, towing contractors working in inclement weather areas, such as harsh winters, might also earn more money.
There is always a demand for tow truck drivers to move abandoned and inoperable vehicles. With a clean driving record and good reviews, towing contractors typically have the best chance of growing.
What is the maximum profit a towing company can make?
Typically, tow truck business owners make between $30k and $40k a year. Depending on the region in which a business is located, the exact amount can differ.
How does a tow contract work?
Towing contracts detail the rights and responsibilities of the towing company and its customers.
Is it worth starting a towing company?
It’s an exciting and lucrative endeavor to start your own business. Starting an independent towing company gives you the freedom to be your boss while providing a valuable service for your community. There will always be a need for towing services as long as there are automobiles on the road, and you can set yourself up to answer these calls.