Do you find the idea of starting an auto hauler business interesting? If so, it's time to acquaint yourself with the groundwork needed to kick-start the venture. The best part is that you can run this type of business as your own boss. Doing so allows you to leverage your enthusiasm for driving long distances and interest in the trucking industry to make the business successful.

The startup costs for a car-hauling business are relatively moderate. Starting a new company as an owner-operator helps reduce the overheads. Over time, you'll grow your operations by reinvesting the profits, allowing you to hire a truck driver and administrative staff.

In this guide, you'll discover key steps to plan and set up your business.

Obtain Professional Certification

Although you can start and run a car-hauler company without any formal education or training, it's beneficial to obtain certification. As a result, you'll find it easier to stand out in the highly competitive auto transport industry. Examples of certifications include:

Many business owners in this industry work as apprentices at an established trucking company before becoming new business owners.

How to Plan Your Auto Transport Business

Like any other commercial enterprise, your car-hauler venture requires a well-developed plan. To plan more effectively, make strategic decisions based on insights gleaned from comprehensive research about the industry and market trends. A proper plan incorporates cost estimates, marketing strategies, service niches, and pricing strategies.

When it comes to compliance, keep your trucks in good condition and adhere to gross vehicle weight requirements. If you're an owner-operator, your driving record is an essential part of the business.

Write a Car-Hauling Business Plan

Successful transport company entrepreneurs handle day-to-day operations based on a detailed business plan. In the plan, you should outline various operational points. These key aspects include:

  • Cargo insurance and liability insurance
  • Business ownership structure
  • Acquiring a business license
  • Hauling company financial projections
  • Improving core business processes with digital products like Skynova's software
  • Central dispatch plan
  • Marketing plan
  • Fueling and maintenance

In the marketing section of your car hauler business plan, identify the most effective ways to spread the word about your services. An effective plan incorporates both offline and online marketing channels. As a result, you may find it easier to boost profits with a steady stream of car-hauling loads.

Select the Ideal Motor Carrier Service Niche

As a small business owner focusing on vehicle hauling, you need to choose the type of service to offer clients. Your chosen niche determines the type of truck or fleet of trucks you need. You can transport multiple used or new cars for short or long distances. One viable option is to partner with car dealerships, which can be a source of ongoing work.

Alternatively, your transport company can focus on moving one vehicle at a time using a car trailer. You can haul the vehicles in an open or enclosed trailer depending on factors like road conditions.

Determine Operating Costs

To avoid budgeting problems, carefully evaluate your startup and ongoing expenses.

Startup costs include:

Ongoing car carrier operating costs include:

  • Fuel and maintenance costs
  • Heavy vehicle use tax
  • IRP (International Registration Plan) plates
  • Annual permit fees
  • Tollgate fees
  • Insurance premiums

Starting operations with a single truck enables you to minimize initial capital requirements. Hence, you can begin operations faster without worrying about further funding challenges. If you plan to acquire a used truck, ensure that the vehicle is in good condition to reduce repair and maintenance costs. Opt for a truck that's not more than five years old.

On the other hand, Skynova software provides a viable way to create professional order confirmations, quotes, and advance payment requests. With template-based solutions, you can handle various accounting tasks, such as recordkeeping, sending customizable invoices, and resolving billing errors with credit notes.

Setting Up Your Car Transport Business

Registering your car-hauling company allows you to benefit from its legal entity status. It becomes easier to distinguish between company and personal assets depending on your chosen business structure. As you set up the venture, take out adequate insurance, obtain the required business licenses, and pick a unique name.

The process of registering your business name is straightforward. Before registration, check whether your chosen name is not already in use by visiting the secretary of state's website. If the name is not in use by another company, proceed to the next stage: company formation.

Register Your Transportation Business

Depending on your long-term plans, you can select one of several business structures. If you aim to grow the auto transport venture into a larger company with branches in multiple states, opt for either a partnership, corporation, or limited liability company (LLC). A sole proprietorship isn't ideal for larger, multi-owner companies.

With a car-hauling LLC, you benefit from limited liability in the event of lawsuits. Thus, third parties can't use personal assets to cover debts or legal fees. Additionally, an LLC is a simpler and more flexible business structure than a corporation. The Internal Revenue Service (IRS) allows you to pay taxes as an individual (pass-through tax status).

Additionally, depending on the business structure you choose, you may need to apply for an employer identification number (EIN) from the IRS for tax purposes and to open a bank account.

Obtain Licenses and Permits

For your startup motor carrier business to operate smoothly, you must comply with federal, state, and local regulations. Thus, identify all the applicable permits and licenses and obtain them. Doing so can also help your company gain credibility in the competitive trucking industry.

Examples of required permits and licenses include heavy load permits and a commercial vehicle license. The law also requires you to obtain a DOT number via the Department of Transportation. A motor carrier number or operating authority (MC/FF number) is mandatory if you plan to operate in multiple states. Furthermore, check long-distance driver regulations applicable in the relevant states.

Take Out Insurance

Your trucking business requires adequate insurance to comply with regulations. You should carry general liability insurance and other trucker insurance policy products that provide sufficient coverage in case of unexpected events. Additional policies offered by your chosen insurance company may include business owner's policy group insurance and worker's compensation.

Open a Business Bank Account

As you set up your car transportation company, you can separate personal assets from commercial affairs by opening a dedicated business account. An added benefit of the account is that you can start building your business's credit history. Relying on a personal bank account undermines your ability to access business loans to grow the venture.

Although banks have varying requirements, you'll need to submit registration documents and the EIN confirmation letter to open a new bank account. If you chose a sole proprietorship business structure, you can submit a Social Security number (SSN). Once the account is active, you'll be able to handle accounting and taxes more conveniently. Skynova's accounting software can also enhance your business processes by simplifying recordkeeping, billing, and other aspects.

Determine Your Tax Obligations

The IRS taxes companies differently depending on their chosen business structure. This means you need to select your vehicle-hauling business structure carefully. An LLC comes with more flexible tax reporting requirements, while corporations are subject to more complex business taxes.

You should also consider state and local taxes that apply to your company. As a car transport company, you may pay heavy vehicle use tax and other taxes. Failure to comply with specific tax requirements can compromise your company's finances. Authorities issue fines and other penalties for failing to report and pay the required taxes.

Market Your Car Carrier Business

Adopting a proactive approach to marketing your services keeps the wheels rolling. An effective marketing strategy helps you compete favorably with smaller and more established car-hauling firms in your area. The first steps to achieving your objectives include formulating a robust branding strategy. Doing so bolsters your business's presence in the sector, enabling your target market to recognize your business name and logo.

Build a Website

Establishing an online presence by creating an auto transport website and a Google My Business page makes it easier for clients to discover your services. The platforms complement other online and offline marketing channels, such as social media, seminars, and print ads.

You can build a highly functional and aesthetically pleasing website without the assistance of a professional web developer. Web hosts provide access to intuitive website-building tools that eliminate the need for programming skills. However, if you want to work with an experienced developer, search for freelancers via Upwork or Fiverr.

Create an Eye-Catching Logo

The most prominent companies in the trucking business have recognizable logos and other branding elements. To stand out in the sector, create a distinctive logo. By choosing the right design, you send a powerful message about your business. Your company's logo appears in marketing materials, including the website, brochures, and social media pages.

Handling Day-to-Day Operations

Tracking and managing company finances is an unavoidable task that requires experience or an intuitive accounting software product. Thankfully, Skynova offers various template solutions that allow you to handle finances efficiently. You can send your car transport clients professional invoices, making it easier to receive payments quickly and easily.

With Skynova's invoice template, it's easier to accept credit card payments and manage invoices with the touch of a button.

Maintain Higher Standards With Skynova

Starting and operating a car transport company successfully can be an exciting and rewarding journey. To achieve your objectives, you need to comply with regulations, choose the ideal business structure, budget appropriately, and streamline day-to-day processes. Thankfully, Skynova can help with that last part.

To see what Skynova's software products and business templates can do for your business, check out our product range today.