Car hauling may be lucrative but comes with risks. So perhaps it would be a good idea to start loading low-cost cars first.
Besides, being a car transporter is not even a hassle-free job. However, if you're interested in enjoying the natural landscapes throughout the countryside, car hauling could be your best fit as a job.
Either you're going to start your own car hauling business or join an auto transport company as a hauler, you're going to earn a lot of money. However, staying profitable in your car transportation business means being careful about the expenses in your business, especially fuel.
Despite this, questions may arise in your mind about how much money you will make if it is an easy job to do, what is the market's condition, and how much money you will need to get started.
We'll address all your concerns today. Not only will we discuss these, but we will also focus on the process of starting an auto hauling business.
So, read on:
What is Auto Hauling and How It Works?
Auto hauling is a car shipping service that helps people move their cars from one location to another. Car dealers, brokers, shippers, and private car owners usually purchase this service to get their vehicles transported to their desired locations.
As a car hauler, you get to know about a job when you're in contact with shippers, brokers, or car owners and quote your rates considering multiple factors such as how many cars to be moved, how many miles to be traveled, etc. Then, once your deal is done, you're responsible for hauling the cars from the pickup point to the destination.
You can even start a car hauling business from scratch if you have the correct information and patience to jump into this industry. However, even if this business is lucrative, you must know everything about starting this business instead of jumping in without any information.
Below, we've explained this business model briefly, along with numbers and demands.
So, keep reading.
How Much Money Can You Make Through Car Hauling?
The amount of money you're going to make can vary depending on the earning model you choose. For example, if you set up your own business, you can earn a lot of money once your company reaches a certain level of success.
As an auto-hauler driver, you're paid a fixed salary that the company sets. In this case, you earn a certain amount of money based on years in the field.
Generally, the rates range from $300 to $700 per car, depending on how valuable the cargo is. Of course, you'll earn more if you drive a large number of miles and if you haul both intrastate and interstate.
When you work as an independent contractor and are ranked among the top car hauling drivers, you will almost make six figures a year transporting one or two expensive cars in enclosed containers. According to The Auto Haulers Association, experienced drivers can easily make between $75k and $110k per year.
In another scenario, the carriers make money based on the miles traveled while the brokers take a fixed amount per car. If the driver makes up to $1 a mile, the broker will be earning up to $200 a vehicle.
You can make money by working as an affiliate for a1autotransport. You'll be earning a commission when traffic from your website will visit a1autotransport.
How to Start an Auto Hauling Business?
Starting and then operating a car hauling business successfully to keep earning is not an easy task. First, you need to be aware of the legal and operational risks involved and sustain yourself as a car hauler.
From our experience of more than 20 years working as a car shipping company, we've explained the significant steps to start and maintain a car transportation company.
Risks and Precautions for Auto Hauling Business
The more significant number of cars you're hauling, the higher should be your insurance coverage. Typical amount value includes about $2 million liabilities and a minimum of $0.5 million in cargo insurance.
Be ready to increase your coverage as your business expands to deliver more cars.
A common risk is any un-welcoming damage to the vehicle. For example, if your truck breaks down during a hauling trip, you can't just immediately resume driving with another truck. Further, finding the best match for your new truck and trailer is a different exercise. In short, that's a quick loss of revenue as well as time.
Further, knowing the detailed dimensions of the cars you're going to haul is as essential as having information on the actual loading capacity of your trailer. Most experienced drivers will tell you that every inch matters when you've to load your truck fully.
Working with excellent and reputed brokers is also a big point to consider. Dealing with every broker in the industry isn't a good idea in the auto-hauling business. Just as in other companies where brokers are involved, they will bid the lowest to win the task and cut the price they must pay to the carriers. These brokers will give hauling contracts to any transport company that has the resources. They don't consider the experience and reputation of the hauling company.
What Do You Need To Start a Business?
First, you immediately need to buy a truck and a trailer once you're all set to kick off your auto-hauling business. These resources should be able to cover the capacity of the number of cars you've planned to haul as per your business model.
The 2nd critical need is the registration to obtain a DOT number from the US department of transportation and MC (Motor Carrier) Number. The latter is necessary only if you want to deliver your cargo in interstate locations.
The company individuals and drivers should also be aware of all the long-distance driving regulations set by the state. This straightforward will help you avoid any legal mishaps while delivering your loads.
Find Your Target Market to Get Better Clients and Earn More Money
Finding the correct target market affects the money you'll make. So, the first step is to decide if you can manage to deliver multiple cars at once or prefer looking for people who want one or two vehicles to be transported.
The first target market is more profitable, where you'll be looking for clients such as shippers or brokers who need several vehicles hauled in a single trip. But, again, it's simply because of delivering a more significant number of cars and making multiples of the total cars.
Secondly, mechanics or car enthusiasts usually require one or two vehicles to be transported from any location to their garage or for any car show. It would be best to look for better rates here, and probably transporting in another region can result in a profitable deal. You can also handle multiple clients in a single trip if your driving route is the same for them. In short, better profits are in marketing your services in areas where your ideal clients are.
Tell Your Clients about Your Rates for Auto-Hauling
The typical fee or charges structure for a vehicle moving business is based on how many miles you need to travel and how many cars to be driven. This works best if you're hauling multiple cars in one trip and working with relevant shippers or brokers.
But if you're offering to move single cars, you need to take care of the expenses involved in each trip along with the charges of the number of miles you're traveling. These expenses include fuel and immediate maintenance charges until you complete your journey and drive back to your base.
You can also offer extended rates for premium services such as transporting enclosed vehicles or the best position in the trailer.
Sign-up for Load Board to Start Getting Clients
Once all the legal work has been done, you're ready to explore the market to look for clients. First, you need to dig out all the market areas, such as shippers, brokers, and private owners. This exploration can take time, and building your reputation in the local market is a challenge itself.
In this scenario, centraldispatch.com can be your first option to get started. This website is a load board where you can find loads to book and start earning money. Not only auto haulers, but this site is for brokers, carriers, and dealers as well. However, you need to pay a small monthly membership fee to sign-up. So, head over to the website as soon as you complete all the other requirements and are ready for your first car moving trip.
Promote Your Auto Transportation Business
Promoting your vehicle hauling business is not any different from promoting any trucking or driving service. You must fulfill the demands of your clients and collect good testimonials to display on your website or brochures.
Convey the transportation area coverage to your market and let them know that your company is fully insured to cover the value of their cargo. In addition, you can maintain the history of your accident-free trips and displayed them on your website to build the trust of new clients who are contacting you for your services through your website.
Growing Your Car Hauling Business to Earn Better
As a rule of thumb, any trucking business needs to generate more revenue than its expenses. In auto-hauling, you can do that easily by transporting more cars at better per-car rates. But, of course, it would help if you also keep your expenses in control.
Building a better trust factor with your current customer can help you grow in repeat business. For example, if you're providing quality services to your clients and have regular needs for transporting their cars multiple times in a year, they'll call you back whenever required. Repeat business models usually come from private owners, and they also pay premium rates for high-quality services.
Investment and Expenditures to Start and Run Car Hauling Business
Initial investments and operational expenses involved in starting and running a car hauling business are divided into different categories.
You need to be aware of each section to prepare your budget.
Insurance: Cargo hauling insurance is the legal expense required as a part of the initial investment and monthly expense. The total amount needed for this section is usually $250k to $500k in coverage and $1 million to $2 in insurance liabilities depending on the hauling capacity of your company.
While monthly insurance expenses for a single carrier usually range from $800 to $1400. You can consider this range as a base amount that changes depending on the truck, car hauling capacity, and types of cars you must move.
CDL: Although CDL (Commercial Driving License) isn't a big part of initial investment, being a meager amount, it's a mandatory expense as you cannot drive any carrier without CDL. You need to confirm that all your hired drivers have obtained CDL from relevant authorities, even as an operator. CDL for one driver usually costs $100 for the complete process.
Equipment You Need: You need a truck and a trailer, depending on your business plan. If you're starting for the first time, a used truck and rig can be a better option. This equipment is an immediate requirement and can cost you anywhere between $15k to more than $150k. This is the base range while you need to research the market to check the best available option depending on your desired auto hauling capacity. After buying vehicles, you also need to estimate and decide on a monthly budget to carry out any regular maintenance of the truck. This budget will keep you safe from any uncertain situation, which can eventually be a loss if you're not taking care of consistent maintenance.
MC and USDOT Registration Costs from Operating Authority: MC and USDOT are mandatory registrations and have legal importance, just like CDL. The operating authority of your company is now referred to as the USDOT pin, which is a consolidated registration number for both MC and USDOT. The total processing fee of these registrations is also a significant expense but is only about $300.
Operational Company Expenses: Once you're made all the initial investments and are ready to kick off your journey as an auto hauler, you need to prepare a budget for fixed and variable monthly expenses for running your business. Fixed payments will usually include your monthly insurance and fixed business operation costs such as salaries and monthly software subscriptions. The variable part of the expenses will consist of gas charges, rood food expenses, any irregular maintenance cost, fuel, other taxes, etc.
How to Become an Auto-Hauler
If you're starting a car-hauling business following all the above steps, you'll be working as an owner of the company and be responsible for taking care of car transportations. However, if you don't have enough capital to buy a truck and bear all the business expenses, you can still join the industry as a carrier.
All this process is more like joining a company as a driver, and you need to possess all the required legal documents before applying for a job.
However, if you already have trucking experience and know the state traffic rules, you can apply for a driver's post at a1autotransport and start earning money immediately.