How to Start a Car Hauling Business

It’s not a stretch to assume that someone considering a life on the road would have more than a passing interest in cars.  For truckers with gasoline in their veins, starting a car hauling business makes perfect sense.  While many aspects of the process are the same as we’ve detailed in our guide about how to start a trucking business, there are some details specific to auto hauling.  

This guide is here for car enthusiast truckers to learn what it takes to get started in the car hauling business.  Read through and decide for yourself if a car hauling business is right for you.  When you’re ready, be sure to also check out the many trucking resources EZ Freight Factoring has to offer.

Without further ado, here’s our list of seven things to consider when starting a car hauling business!

Experience Matters!

While being properly licensed with a CDL is fundamental to start hauling cars, having experience as a truck driver will make things cheaper in the long run.  Cars are expensive and they’re exposed to the elements during transport.  These two factors make car hauling riskier than most other cargo.  Having an established record of good driving will save you money when it comes time to insure your load.

Decide the size and scope of your operation

Not all car hauling businesses are the same.  For some, the combination of a dually and a three or four car trailer is exactly what they need to get up and running.  This smaller operation is great for local and regional hauling and has the benefit of lower starting costs.

For those looking to haul across the country, a larger rig may be in order.  A class eight truck paired with a seven-car trailer will have a higher cost of entry but has the potential for larger returns. Purchasing a semi can cost from $30,000 on the low-end to well over $100,000 for something new.  Add to that a trailer ranging from $25,000 to $75,000, and you’ve got a large initial investment.  Decide which setup is right for you.

Get some insurance quotes

Remember the expensive insurance I mentioned in the first tip?  Here’s where you find out exactly how much that coverage will cost if you’re eligible to get it.  Typically, truckers purchase liability insurance of around $1 million and cargo insurance in the ballpark of $100,000.  For auto haulers, those coverages increase quite a bit. 

Car hauling businesses often have liability insurance of $2 million and cargo insurance of around $500,000.  With higher coverage amounts comes higher insurance rates.  Experience and a clean driving record are crucial in keeping your rates low.  Also be sure to shop around as rates vary by insurance provider.

Get your auto hauler operating authority and USDOT number

The Federal Motor Carrier Safety Administration (FMCSA) requires trucking companies to have interstate operating authority, also called an MC number.  The MC number determines what kind of goods a commercial vehicle can transport.  The process of getting operating authority is fairly simple and explained clearly on the FMCSA website.

You’ll also need to acquire your USDOT number from the FMCSA.  This number is used to identify your company regarding safety information, inspections and audits.  More information about USDOT numbers can also be found on the FMCSA website.

Purchase your equipment

 You’ve decided what type of car hauling you’d like to do, priced out insurance, completed all your registrations and gained some quality experience on the road.  Now comes the fun – and sometimes scary – part, purchasing your equipment.

There are different options available depending on your company needs.  If you’ve followed the steps we’ve outlined, you’ll know what type of rig you need, but other questions still remain.  Are you going to purchase or lease?  Will you go for brand new equipment or save money by buying used?  What brands and models are you going to go with? 

These are not cheap purchases, so don’t make an uninformed decision.  Check online for reviews to learn the pros and cons of all your options.

Find cars to haul

Now’s the time to start hauling!  But where do you find cars that need to be transported?  Fortunately, there are several options.

One of the most common, not just for autos but for all freight, is a load board.  Load boards are online services that connect shippers with carriers.  Some load boards charge a subscription fee, but serve not only to connect drivers to loads, but many also assist with communication and offer rating systems. 

Establishing relationships with car dealerships and auto auctions is another way to find cars to haul.  Auctions in particular have a high volume of cars both coming in and going out and can prove lucrative for a car hauling business.  Car dealerships are also a decent source of cars to haul, though they typically have less volume than auctions.

Factor your invoices

Congratulations, you’ve hauled your first load of cars!  Now you’re most likely looking to haul another batch but won’t receive payment for 30, 60 or even 90 days.  So how are you going to fill up your tank for the next trip without taking on debt?  By contacting EZ Freight Factoring, of course!

Factoring your outstanding invoices is the fastest way to get the cash you’ve earned on the road.  Simply fill out this form or give us a call and we’ll get you started.  The process is simple, and once you’ve been approved you can get paid within a few hours.  So why wait? Start factoring your freight paperwork today!