Question on Towing business

nards444 · October 20, 2015

Maybe those that are there and have been there can give me some insight. But first let me explain what Im trying to do.

Next year my lease is up on my 14 Silverado 1500. I am thinking of the possibility of getting a diesel to tow what I need for myself. But I got to thinking I think there is a market for small load towing around my area, basically a few hour radius around here. What I am talking about is things like bringing the guys boat from storage to the marina, moving a TT to a seasonal camp ground, or somebody bought something and don't have a truck to move it for one reason or another. The only real option around here for stuff like that is to hire a tow truck company which they all charge high as normal. Now what I am thinking I can lower prices and do some of these small jobs, as the truck is already a part of my life so its not like im adding cost of the truck to my business, and I don't have to pay for employees. Im not really planning on making this some full time effort, just jobs here and there. Just some pocket change when Im not busy.

I have some questions. First I would plan on owning a SRW 2500-3500 truck that is probably no older than 3-4 years old. I know these trucks can tow up 13-15k. But I would probably mainly be looking at keeping it at 10-12k. Bumper pull only and towing customers provided trailers.

Would I have to get USDOT and NYDOT stickers or just one

What kind of insurance we looking at, and cost

And anything else of value you might have to add.

Again my aim isn't to make this my job. But I also don't want to pay thousands a year in insurance and registrations as my goal is probably only to make a few thousand or so a year.

Tattooo · October 20, 2015

To be legit your gonna have commercial insurance & registration etc which is more expensive ... So make sure your sure youll have enough work to at least cover that

Potts · October 20, 2015

Sounds like a nice side business. I'm always looking for ways to pick up extra scratch to pay for all of my hobbies. I have a lot of hobbies ; )

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sahls01gmc · October 20, 2015

I second what Tattoo said. You will need the proper tags on your truck, DOT verification, commercial insurance (probably $1,000,000 balloon coverage or greater). Not sure on costs on that.

Now you see why "tow" companies charge so much. There can be money made, but it's not quite as easy as you think.

DOT fines are not cheap, and if you have an accident with someone else's equipment and don't have the proper insurance.....goodbye to everything you own.

Not trying to scare you off, but want you to realize you need to dot your I's and cross your T's before you do this.

nards444 · October 20, 2015

I second what Tattoo said. You will need the proper tags on your truck, DOT verification, commercial insurance (probably $1,000,000 balloon coverage or greater). Not sure on costs on that.

Now you see why "tow" companies charge so much. There can be money made, but it's not quite as easy as you think.

DOT fines are not cheap, and if you have an accident with someone else's equipment and don't have the proper insurance.....goodbye to everything you own.

Not trying to scare you off, but want you to realize you need to dot your I's and cross your T's before you do this.

That's why Im trying to get the information. At a minimum I would definitely have the insurance. Just wondering what I can do to get away with without going DOT. My thinking is this is going to be a job or two here and there. Id be happy with two tows a month netting me 500 bucks which is 6 grand a year. But im not trying to scam the system. That's why I am trying to get an idea on DOT pricing and insurance. And do I need DOT for NY and USDOT?

I know tow companies charge because they have overhead. But I don't have to pay employees and then make a profit on the top, im also not factoring in the price I charge in trying to pay for my 100-200k truck. Around here I called around to get my 5th wheel moved about 50 miles one way, best price was 300 bucks. Something Like that I wouldnt mind charging 150-200 and after paying fuel and overhead walking home with 100-150 for two hours worth of work.

Keep in mind like I said this isn't going to be long haul across state borders. This is more or less local moves. Lots of boats and campgrounds around here. Plus lots of military around that need something moved. At minimum I want to be covered insurance wise. And also want to abide by the law. But am wondering if theres some grey to maneuver in seeing as how this wouldn't be a full fledges business. Because I can tow my buddies boat with my truck all day long and don't need DOT or any insurance, granted im not getting paid, but what I want to do isn't much more than this.

sahls01gmc · October 20, 2015

Sounds like you have your head wrapped around it correctly. Hit up your auto insurance guy, and see what they can do for you. They might have some coverage for special occasions like this.

Don't know how to answer the DOT question. My guess is you would need it, since you are "for hire".

nards444 · October 20, 2015

Sounds like you have your head wrapped around it correctly. Hit up your auto insurance guy, and see what they can do for you. They might have some coverage for special occasions like this.

Don't know how to answer the DOT question. My guess is you would need it, since you are "for hire".

Thanks that is my guess too. My next stop was going to call insurance. There is tpw truck insurance out there which can run 1000-5000 but tow truck insurance is different than just hauling a lot more liability and danger involved in it.

Was browsing USDOT And looks to cost 600 bucks and you need physical. So I mean I don't think its out of reach. Im not skirting the system, insurance is a must im just wondering what and if any I can get around as far as DOT

sahls01gmc · October 20, 2015

Yeah, a yearly physical isn't too bad. I have this for my work so I can drive the company vehicles. I also have my Class A CDL for some of the weights that I do haul. Some of our equipment requires a Class C CDL, but it was only 10 more questions and 15 minutes longer on the driving test to be certified to drive anything* with wheels at this point.

Tattooo · October 20, 2015

Let us know what you find out

j-ten-ner · October 20, 2015

...But I don't have to pay employees and then make a profit on the top, im also not factoring in the price I charge in trying to pay for my 100-200k truck. Around here I called around to get my 5th wheel moved about 50 miles one way, best price was 300 bucks. Something Like that I wouldnt mind charging 150-200 and after paying fuel and overhead walking home with 100-150 for two hours worth of work....

I'd recommend to break down the real cost of driving your truck to a mile/km. Also come up with a hourly rate you can live with.

That will give you a better idea what you'd have to charge the customer to at least break even.

My truck cost me about 58 cents/km. Based on 20.000km a year. Including maintenance, wear and tear, insurance, payments, fuel.

Taking your example the trip over 50mls (~80km/160km round trip) would cost me about $93. Not towing, just the truck.

For 160km I'd estimate 3hrs at (just to say a #) 25 $/hr makes 75 bucks.

Charging 170 bucks will just break you even. If it was me I'd charge at least $200 to make some profit. For future investments.

so long

j-ten-ner

sahls01gmc · October 20, 2015

I did find this...

http://www.fmcsa.dot.gov/registration/insurance-requirements

nards444 · October 20, 2015

I'd recommend to break down the real cost of driving your truck to a mile/km. Also come up with a hourly rate you can live with.

That will give you a better idea what you'd have to charge the customer to at least break even.

My truck cost me about 58 cents/km. Based on 20.000km a year. Including maintenance, wear and tear, insurance, payments, fuel.

Taking your example the trip over 50mls (~80km/160km round trip) would cost me about $93. Not towing, just the truck.

For 160km I'd estimate 3hrs at (just to say a #) 25 $/hr makes 75 bucks.

Charging 170 bucks will just break you even. If it was me I'd charge at least $200 to make some profit. For future investments.

so long

j-ten-ner

yeah thanks. definitely would have to factor in the numbers before I come up with something to charge. One thing like I said I would own this truck for my daily driver and for hauling my boat and other things. So Im really not having to factor payment into me making money, as doing this will more or less be extra. Also I plan on having a truck with some warranty for a at least a while so maint should be low. And the fact that this little business will probably account for around 10% of miles driven or less, im not sure I can factor full weight into wear and tare on what I charge. But would still have to factor in fuel, insurance etc. fuel alone is 25 cents a mile give or take.

So if I factor in a 50 mile on way trip, which most people factory in 100 for return. Even if I went a dollar a mile cost factor 200 bucks would make me 100 bucks, or 50 an hour. 150 would only be 25 an hour which isn't bad, but for low amount of time it may not be worth it. But I also think my cost per mile would probably be closer to 50 cents a mile as Im not going factor in a lot of stuff in there, as its a cost for me anyways.

ember1205 · October 20, 2015

Your best bet would be the following:

- Contact your insurance agent and inquire as to the cost of commercial insurance for the vehicle and trailer itself, what kind of liability you'll need ($1,000,000 is nowhere near enough in my view when you can toast a half million dollar boat and take out a lot of additional property along the way with just one accident - and that doesn't cover any sort of injuries).

- Get yourself into a DMV and ask about the registration and DOT process.

Alternatively, you could stop off at a local State Trooper barracks and ask them what sort of regulations commercial haulers have to adhere to. These guys are enforcing the laws, so they'll have a good sense of what those laws are. They can give you information on things like licensing, registration, trailering requirements, DOT stickers, etc.

The other thing to understand is what happens if you're driving around in a commercially registered vehicle and you're towing something that's yours and not for hire. Weigh stations and such will almost certainly still be a required stop, for example.

Lastly, you HAVE to give consideration to the fuel and wear and tear on the truck and trailer. No one starts up a business of any kind "just for fun". They all do it to turn a profit. Even if your profit is intended to be small, it will still be a profit. Operating at a loss won't be tolerated on your taxes for very long and you will have to take wear and tear into account at tax time.

Chevor · October 20, 2015

Im pretty sure anything over 10,000 pound GCWR pulled for hire requires DOT number.

Not much to be made on short trips. Most loads pay per mile. It takes time hooking and unhooking.

nards444 · October 21, 2015

Your best bet would be the following:

- Contact your insurance agent and inquire as to the cost of commercial insurance for the vehicle and trailer itself, what kind of liability you'll need ($1,000,000 is nowhere near enough in my view when you can toast a half million dollar boat and take out a lot of additional property along the way with just one accident - and that doesn't cover any sort of injuries).

- Get yourself into a DMV and ask about the registration and DOT process.

Alternatively, you could stop off at a local State Trooper barracks and ask them what sort of regulations commercial haulers have to adhere to. These guys are enforcing the laws, so they'll have a good sense of what those laws are. They can give you information on things like licensing, registration, trailering requirements, DOT stickers, etc.

The other thing to understand is what happens if you're driving around in a commercially registered vehicle and you're towing something that's yours and not for hire. Weigh stations and such will almost certainly still be a required stop, for example.

Lastly, you HAVE to give consideration to the fuel and wear and tear on the truck and trailer. No one starts up a business of any kind "just for fun". They all do it to turn a profit. Even if your profit is intended to be small, it will still be a profit. Operating at a loss won't be tolerated on your taxes for very long and you will have to take wear and tear into account at tax time.

Thanks for the info and points. I will call insurance. Nothing in this area for the most part or what this truck could tow would be in the half million range To be honest your probably talking most things around here brand new are in the 50k range high end may around 100k, so what the market is will have to be taken into consideration. Also you can use the magnet DOT plates and take them off while not working.

Like I said my aim to is to stay within an hour or two of the house, I wont be using my trailers, it will be towing other trailers. While I will have to factor in fuel while on the job, and will have to factor how many miles I tow with on the job for wear. My aim for sure is to make money and some great advice in here. I definitely do not want to lose money.

What Im kind of equating this to is this. Say I go out and buy a zero turn mower to mow my lawn, then decide to mow a few neighbors lawns on the side. Im not looking to make a killing just a few extra bucks. But after factoring insurance and DOT requirements the equation has to make sense, and it may not. But I do think there a niche and money to be had without taking this to a long haul type mentality.