auto repair and towing
bkgs@thefreesite
10-02-2010, 02:57 PM
Hello, I am looking to start a tow truck business and would like to ask the mechanics.An auto repair store will either have its own tow truck or have tow truck companies. I would like to ask about towing.If I were not familiar with tow truck companies I would think if I were to start a company in this industry I would advertise to the public and individual consumers would call when they needed a tow truck.However, insurance companies, police departments and parties with a large number of sales over a long period time are the majority of sales and individual consumers are the minority.I would like to ask an estimate for what % of sales from individual consumers for a typical tow truck company.
MagicRat
10-02-2010, 08:31 PM
You are on to something here. You need towing contracts in order to make a living operating a tow truck.
The easiest way to start is to be an owner-operator, and tow for a major towing company and/or AAA or other auto club. This means you own and drive your own truck, but you have the major towing comany's name on your truck, and you take calls from their dispatch office, while you are on your shift. Off your shift, you can tow for your own clients (usually).
These major towing companies are the ones who already have all the contracts with commercial customers. These customers are unlikely to award their contracts to you unless you have many trucks and have an excellent history of service.
There are many independent tow trucks, who tow exclusively for themselves. But these are often called "chasers". They make most of their money waiting on the highway for an accident to happen. They swoop in and persuade the drivers involved to let them tow the car to a repair center, usually someone the tow truck driver knows. Typically, the repair center will kick-back up to 15% of the repair cost directly to the tow truck driver, as a reward for bringing the work in.
Typically the accident repair is paid by an insurance company, so, these chasers are making their money from your insurance premiums.......... and you wonder why your premiums are so high.
Yes, these "chasers" will happily do regular tows, but they don't make as much money on them. Sometimes, around here, "chasers" will get towing business from the police, who have accident scenes to clean up. Here too, occasionally the cop will receive a $$$ reward from the "chaser" in exchange for the call.
FWIW this is how the towing business works in Southern Ontario in a nutshell, although it may be a bit different where you are. My friends in the towing business say "chasing" is difficult, risky, somewhat corrupt and stressful. It is MUCH better to be an owner-operator working for a reputable major towing company or auto club.
The easiest way to start is to be an owner-operator, and tow for a major towing company and/or AAA or other auto club. This means you own and drive your own truck, but you have the major towing comany's name on your truck, and you take calls from their dispatch office, while you are on your shift. Off your shift, you can tow for your own clients (usually).
These major towing companies are the ones who already have all the contracts with commercial customers. These customers are unlikely to award their contracts to you unless you have many trucks and have an excellent history of service.
There are many independent tow trucks, who tow exclusively for themselves. But these are often called "chasers". They make most of their money waiting on the highway for an accident to happen. They swoop in and persuade the drivers involved to let them tow the car to a repair center, usually someone the tow truck driver knows. Typically, the repair center will kick-back up to 15% of the repair cost directly to the tow truck driver, as a reward for bringing the work in.
Typically the accident repair is paid by an insurance company, so, these chasers are making their money from your insurance premiums.......... and you wonder why your premiums are so high.
Yes, these "chasers" will happily do regular tows, but they don't make as much money on them. Sometimes, around here, "chasers" will get towing business from the police, who have accident scenes to clean up. Here too, occasionally the cop will receive a $$$ reward from the "chaser" in exchange for the call.
FWIW this is how the towing business works in Southern Ontario in a nutshell, although it may be a bit different where you are. My friends in the towing business say "chasing" is difficult, risky, somewhat corrupt and stressful. It is MUCH better to be an owner-operator working for a reputable major towing company or auto club.
bkgs
10-02-2010, 09:52 PM
Ok, so if you advertise like tow companies do in the yellow pages where many of the companies include advertising to individual consumers and some take of much of ad space to individual consumers.Maybe it is not as big a lack of market though as I understood, where you could advertise equally to individual consumers or somewhat less than you would to contract sales. And only 1% or 5% of sales would be to individual consumers not because of bad advertising or doing something wrong, just lack of market. How bad is it going after individual consumers, is it a couple sales a year on high end. Maybe I am exagerating, I would just like to ask.
MagicRat
10-02-2010, 10:02 PM
Towing is what they call a 'mature industry'. Lots of companys, lots of competitors.
How are you going to be any different?
How can you take business away from the well-established companys?
The solution is not 'advertising'. The solution is for you to be operating the tow truck(s) as much as possible, with as little down-time as possible. Contract out to an existing operation. Let them advertise. Let them feed you calls.
All you do is drive and make money, so you can pay for the equipment. After a couple of years, you will have made some money and you will know the business better. Then you will have a better idea of how to make advertising work in your local area.
Imo hoping for advertising to work without money-making contracts is a quick way to losing your shirt. Just my :2cents:
How are you going to be any different?
How can you take business away from the well-established companys?
The solution is not 'advertising'. The solution is for you to be operating the tow truck(s) as much as possible, with as little down-time as possible. Contract out to an existing operation. Let them advertise. Let them feed you calls.
All you do is drive and make money, so you can pay for the equipment. After a couple of years, you will have made some money and you will know the business better. Then you will have a better idea of how to make advertising work in your local area.
Imo hoping for advertising to work without money-making contracts is a quick way to losing your shirt. Just my :2cents:
Automotive Network, Inc., Copyright ©2025