QuestionQUESTION: My husband and I would like to start a auto hauling business in 2008. Right now, we are trying to gain knowledge of the field and preparing a business plan. So, research and gathering information is primarily what we are doing right now. I have a few questions that you may be able to help me with.
We want to purchase a dually truck and 3/4 car trailer. First question: what brand trailer is best for this type of business?
Contracts: what type of companies can we work with other that dealerships for business?
Pricing: On all the stickers of new vehicles in our area, there is a $300 destination charge; is that what they are charged normally? Or is that marked up as well.
Last but not least (I am sure I will have more questions later) - is there a book that I can get that will explain all of the details of auto hauling (from hooking up cars to business startup?)
ANSWER: Hi Nicole.
What trailer to buy depends on what type of vehicles you plan to haul. You probably want to look at a 4 car, wedge trailer with a gooseneck. If you haul larger vehicles like tractors or construction equipment, you'll want a flatbed. If you plan on hauling any high end vehicles such as Mercedes or BMW, you may want an enclosed trailer. Most people go with a wedge and that's probably what you'll need. You'll be able to haul 4 cars on most wedges too.
Besides dealers, you can haul for private individuals, companies or other car haulers. The problem with dealing with John Q Public is that you may have to pick up a car and deliver it on a certain day. Plus, you may have to go way out of route. Price accordingly. This is where auto hauling companies do business with each other. A customer calls you for a pickup and delivery that your truck is nowhere near? Find a company that will haul that car for you and mark it up then charge the customer. You made a few dollars for being the middleman. Happens a lot in your business. Businesses (non-dealers) are other great sources. Big companies are always shipping company vehicles from one office to another. It's worth dropping off your business card to senior management!
Pricing is as varied as colors in the rainbow. I had to ship a car from Clearwater, Florida to Sequim, Washington. I ended up calling some outside carriers myself, not telling them my business. Take a look on a map and see where Sequim is. Many carriers quoted me $1500 to Seattle and $3000 to Sequim. On a map, Sequim is only 122 miles from Seattle, but there is a huge PITA (Pain In The Ass) factor there. You could waste an entire day going that extra 122 miles and back. Again, you have to consider that and charge accordingly. Call companies in your area and find rates for different destinations. Then you'll get an idea of pricing. The $300 destination charge very well may be what a dealer is charged. This could include the truck AND train transportation. Most new car dealers have contracts with their parent companies (be it GM, Ford, etc.) who in turn have negotiated the price with transport companies. Where carriers like you come in is used cars, or dealer-to-dealer transfers. Finally on pricing, there are many other factors like size of vehicle (large vehicles weigh more, thus you'll burn more fuel). Does the vehicle run or does it need to be winched on? Is it a high-end vehicle that has special needs?
I would go to www.Amazon.com and get two books. One is "How to Start & Manage an Independent Trucking Business: A Practical Way to Start Your Business" by Jerre G. Lewis and Leslie D. Renn. The other is "Bumper to Bumper: The Complete Guide to Tractor-Trailer Operations" by Mike Byrnes & Associates.
Finally, one more piece of advice. Make sure you have a detailed check sheet when picking up a car, along with a great digital camera. Always take pictures of the car showing any scratches, dents, etc. Write them down on a check sheet AND MAKE THE CUSTOMER SIGN OFF ON IT! Very important!! I've seen it happen where customers try to get a new paint job off a carrier for scratches that were already there! You can't get too detailed!
I hope I helped. Good luck with your new company!
Bob Stephens
---------- FOLLOW-UP ----------
QUESTION: Thanks for all of your help! I have just ordered both books and can't wait to read them.
But I have yet another question - do you have any idea where I could obtain a sample business plan for a auto transport business? Also, do you know of anyone that has been financed through the SBA?
AnswerHi, again, Nicole.
I don't know of any sample business plans for the auto transport business. You may have to call future competitors for help. I've seen the SBA help out a few new trucking companies. It's worth a look into.
Good luck!
Bob Stephens
