Auto Transport Carriers: The Cost of Starting Your Business

Like with any business, especially as an auto transport carrier, it costs money to make money. However, when it comes to starting your business, it’s important to consider initial, ongoing, and down-the-line costs of kicking off and managing an auto transport operation. 

If you are considering or ready to get your auto transport carrier business going, whether you are an owner-operator or fleet, here all of the following items you will need and their associated costs. 

Insurance

There are many items needed to get your business started, but one of the more potentially expensive and necessary is your insurance. Getting insurance isn’t just the law, it’s the only way to get work. Car hauler insurance is also one of your ongoing costs to calculate within your monthly budget. 

Trusted Choice suggested that car hauler insurance can cost a carrier anywhere from $800 to $1400 a month.

The type of coverage auto transport carriers need will also be dependent on a few factors. If you are hauling a smaller rig, and therefore a minimal number of vehicles, then you would be safe with about $250,000 in coverage. And if you are operating a larger rig to haul several cars, then you’re looking at closer to $500,000 or more in coverage. Although, it must be taken into consideration that this does not include liability. Depending on the vehicles you move and the truck you operate on, you may be required to have $1 million to $2 million in liability with your insurance. 

Trusted Choice suggested that car hauler insurance can cost a carrier anywhere from $800 to $1400 a month. However, this cost may go up or down depending on the size and type of your truck, how many cars you transport, the types of cars you transport, where you are transporting cars, and more. 

If you are nervous about the cost, or just want a way to save, try bundling your other coverages with the same insurer for an overall cheaper price. The best bet is to shop around and collect quotes to ensure that you are getting the best offer considering any of your given circumstances. 

CDL 

Getting your CDL isn’t just important to qualify for insurance, but it’s critical to getting loads on any load board.

As Driving Tests reports, “a gross combination weight rating (GVWR) of 26,001 or more pounds, provided the towed vehicle is heavier than 10,000 pounds”. This makes this particular class of CDL perfect for auto transport carriers. The cost of obtaining a CDL varies per state, but it’s best to budget around $100 for the complete process. 

Equipment

To get started, you’re going to need a truck, trailer, or rig based on your budget and goals. If you’re just starting out, the more affordable option is to purchase a used trailer. If you’re looking at a 7-car trailer that has been used, then you’re looking at around $30k.

Best Truckin suggests that, “a truck can cost you anywhere between $15,000 to $175,000. Expect a down payment somewhere between $1,000 to $10,000”. But it’s best to do your research on what kinds of loads you think you’ll be able to move in your preferred routes and what’s best for your immediately available budget.

Best Truckin suggests that, “a truck can cost you anywhere between $15,000 to $175,000. Expect a down payment somewhere between $1,000 to $10,000”.

As always, with your equipment comes regular maintenance fees. For any auto transport carrier, it’s always a good idea to keep a monthly budget of truck maintenance fees so that you aren’t putting your expenses at risk. The amount you budget will be dependent on the type of truck you operate and typically average distances. 

Operating Authority 

None of us are legal experts, but we all know how important it is to have everything legally checked away. And the biggest is to apply and receive your operating authority. 

…obtaining your operating authority now includes your Motor Carrier (MC) number and your USDOT which consolidates into a single USDOT Pin.

As of the past year, obtaining your operating authority now includes your Motor Carrier (MC) number and your USDOT which consolidates into a single USDOT Pin. And not to make it more confusing, but you may see that your FMCSA operating authority is also referred to as your MC. All of which are necessary to legally operate and/or work as a carrier for hire.

For a filing fee around $300, you can apply for our operating authority here. And while this isn’t a requirement to haul cars, if you are wanting to register your business, follow this cheat sheet on filing costs per state. 

Auto Transport Carrier Fixed and Variable Costs

There are numerous other costs associated with starting up and running your car hauling business, but it’s also important to consider your fixed and variable costs. 

These fixed costs range from your monthly insurance fees and any auto transport platform to help you manage your business betters.

These fixed costs range from your monthly insurance fees to any auto transport platform to help you manage your business betters. Some variable costs to consider include gas, fuel tax, on-the-road food expenses, and any utility costs. 

Aside from calculating all known fixed costs, it’s difficult to create expectations on variable costs. Here is where budgeting for risk will come in handy. Learn from fellow carriers around their gas expenses, give yourself a budget on food on the road or pack meals to save money, and ensure you are keeping a rainy day fund for any incident that may occur with your rig.

Another fixed cost to consider to help you manage your cash flow is an auto transport platform that includes a transportation management system that connects to accounting software like QuickBooks. This fixed cost will vary based on the partner you choose. 

It’s a great time to consider starting off your car hauling career or owning your own car hauling business. Auto Transport carriers are always needed, but it’s important to consider all the costs that go into getting started to ensure that you are setting yourself and your business up for success. 

For more information on how Super Dispatch can help you succeed as a carrier in auto transport, sign up to get started today. 

Published on February 12, 2021