Starting a tow company?

A guy I work with is good friends with a towing company owner, so we hear some stories. Huge overhead. Constantly buying and maintaining expensive trucks. Has a shop with a p/t mechanic. It seems like you MUST get a contract with AAA if you have any dreams of making money. Having employees is a necessary evil and a PITA. That said, his buddy seems to be good at it - AAA contacted him about a region where they were having trouble getting reliable service, so he opened a 2nd business there. They guy makes a lot of money, but he has zero free time and stress levels are at maximum.

I've dreamed of buying a flat-bed to have for personal use, but since the yearly registration fees in PA seem to go up exponentially the heavier a truck gets ('86 Toyota 4x4 = $46/yr; '95 Dodge Cummins 4x4 = $153/yr), I'm sure a flatbed would be substantially heavier than my Dodge and I'm not sure I want to pay even more every year for a truck that sits 99% of the time.

The towing companies are now booming in industry. The wide margin profit they earn is because of the needs of the individuals reaching towing companies. Out of several, I prefer to use [canoe towers]. They've been awesome to me till now in terms of pricing, quality service, and quick turnaround. But Who knows what's gonna happen in the future.

[mod suspects an increase in spam on the digital highway]

At least five tow trucks were set ablaze in the GTA early Monday morning in what are just the latest instances of vandalism and violence tied to the region's towing industry. 

Three of the incidents happened within minutes of each other in the Bathurst Road and Finch Avenue area of North York, while two others occurred during roughly the same time frame — between 3:30 a.m. and 4:00 a.m. — in Richmond Hill. 

 

York Regional Police Insp. Christina Dawson said the fires are all "likely" connected

Heavily mobbed up in Toronto and starting to see the same here. I have a friend who runs a one-truck show and has been doing it for over 20 years. Not a flatbed. A new truck that can deal with the heavy pigs we drive nowadays is gonna run $100k. Maintenance and insurance needs to come out of the $60 tow jobs before you get paid.

As an indie you can carve a niche out of working for specific garages, scrapyards, personal contacts and dealers. A truck that can do underground parking is almost a niche in itself as there are not many who can respond to those calls. Repos are another niche that fills in the time. You wont get rich.

10 year old canoe tow

When I started NYC was cracking down on mob businesses in general but hadn't stopped chasing wrecks. It was competitive but more Mother Jugs & Speed than Goodfellas. 

MrJoshua said:

Momma says, Tow companies are the devil.

Fixed it.

10 years...

Carkid's not a kid anymore. 

In reply to SVreX (Forum Supporter) :

I think in a recent post, CarKid was shopping back seats because he's had a kid!  

John Welsh said:

In reply to SVreX (Forum Supporter) :

I think in a recent post, CarKid was shopping back seats because he's had a kid!  

Aren't back seats how you get kids?? 

John Welsh said:

In reply to SVreX (Forum Supporter) :

I think in a recent post, CarKid was shopping back seats because he's had a kid!  

Two actually.  But since its another ancient thread canoe revival he's had time :)

OK, I'm not pretending to be knowledgeable on the subject other than to relay a friends story: His (very successful) nitch is to take better care than others. A lot of  of tow guys just aren't very careful. He makes his gravy via a contract with Tesla as well as getting his name out in the collector car community. This works because he's not expected to do too much (dangerous) emergency work, and if he wants to take a few days off to go to the mountains, his customers will wait or call someone else. 

Don't know if that model would work in your community, but there's a lot of money where I live, and people pay for quality.

As an aside, once he got his name out there he's also become known as a good guy to sell stuff to, and keeps a steady flow of light restoration projects flowing through his shop. 

In reply to Kreb (Forum Supporter) :

Umm...

This is a 12 year old thread

To get a 3 year contract with the CHP you need BRAND NEW TRUCKS. Next 3 year contract, ALL NEW TRUCKS. 

And I believe you need a minimum amount of trucks for a given region. They must be available 24/7 which means multiple drivers per truck.

My neighbor has had a contract for 20+ years, is 75 years old and just ordered new trucks (12) for another 3 year contract. He says it's his last.

Unfortunately for a recent experience I was told a 75 ton rated wrecker costs over $1M.   That's a steep start-up cost.

I used to watch all the Highway Through Hell and used to fantasize having a business like that like Jaime Davis or Al Quiring. Then I saw the type and demographics of the employees they have to deal with and the problems ... 

No thank you.

Purple Frog (Forum Supporter) said:

Unfortunately for a recent experience I was told a 75 ton rated wrecker costs over $1M.   That's a steep start-up cost.

 

We expanded our hotel business in Montana during Covid. If $1m+ is the cost of those trucks, a hotel/motel that costs pretty similar, is much better ROI.

The local towing company bought a 50T rotator on a Peterbilt chassis brand new from NRC with limited rigging it was $550k. I guess a 75T could cost $1M. It's a lot of dollars and the upkeep and insurance is wicked. 
That being said it's. It uncommon at all to have individual tow bills of $30k or more.