How to Start an Auto Transporting Business

Last Updated: January 21, 2022 References Approved

Thanks to new technologies to make auto transporting more energy-efficient, it's becoming ever more popular as an eco-friendly way of moving cars. Starting an auto shipping business can be a rewarding endeavor, but you might have questions like how to get started and how much it will cost. That's where we come in. Our how-to guide has all the info you need to start your own car hauling business.

Steps

1
Determine what type of auto transporting business you want to start. There are auto transporting businesses that provide open car transport for regular vehicles, specialized auto transporting businesses that offer enclosed car transport for vintage and exotic vehicles, and those that provide both types. Open car transport utilizes car haulers on which the vehicles are exposed to the elements, while enclosed car transport makes use of special car haulers that are sealed on all sides to protect the cars inside.
2
Investigate the competition in your area.^{[1]
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Trustworthy Source
U.S. Small Business Administration
U.S. government agency focused on supporting small businesses
Go to source} If a competitor already covers a large part of the market, consider specializing in one specific niche such as vintage car transport.^{[2]
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3
Obtain your commercial driver's license from the appropriate department in your state.^{[3]
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4
Draw up a business plan that includes your start-up costs, projected revenue, market, business strategy, and marketing plan.^{[4]
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5
Raise investment capital by presenting your business plan to private investors or your bank.^{[5]
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6
Get your motor carrier number and transportation license.^{[6]
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Research source} In most countries, these are issued by the Department of Transportation.
7
Buy cargo and liability insurance.^{[7]
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Research source} When starting an auto transporting business, you're required to carry insurance on each cargo, though the amount will vary depending on your location.
8
Choose a location for your auto transporting business. You'll need good access to major routes as well as sufficient room to load and unload the car haulers. Check with your city to make sure you comply with local zoning laws.
9
Have a lawyer draw up auto transporting agreements, and employee contracts if you are planning to employ staff.
10
Purchase the necessary equipment.
- For a regular auto transporting business, purchase at least one open car hauler.
- For a specialized auto transporting business, purchase at least one enclosed car hauler, a winch, hydraulic liftgate, and high-strength tie-down straps.
11
Approach auto transporting brokers to be included on their subcontractors' list. This means that they can hire you to transport cargo for them.
12
Advertise your business in local media, as well as on the Internet.^{[8]
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13
Open your auto transporting business.

Community Q&A

Question

When transporting 3 cars or fewer, is a Commercial Drivers License (CDL) required?

Community Answer

If the total weight of the items transported and the vehicle is less than 26,000 lbs., no CDL is required.
Question

When buying the truck does it have to be new or could it be used?

Community Answer

Buying a new truck comes with better warranties, and generally peace of mind. The cost can be greater upfront in this case, however, you are getting a "new" tool or instrument that is going to create revenue. If your business flounders before the new vehicle is paid off, though, you are stuck with it. Starting a business with a used truck can be a good idea as less capital is required and therefore less risk. However, interest rates on used vehicles can be higher, if financing is involved. It is also a good idea to know the history of what you are buying, i.e. if a used vehicle has a verifiable service history this could be a good option especially with higher miles.
Question

Should I invest in a diesel truck or a gas one?

Community Answer

Diesel due to the difference in torque and the longevity of the drivetrain. The torque from a diesel engine will usually be double that of a gas engine.

Warnings

Before you hire employees, make sure they have their commercial driver's licenses and clean driving records.

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