How to Start a Tow Truck Business | Equipment, Costs & Licensing
- Nate Jones, CPCU, ARM, CLCS, AU
- Sep 17
- 2 min read
Starting a tow truck business can be a profitable venture, especially with the growing demand for roadside assistance and vehicle recovery services. Whether you're looking to operate a single truck or build a fleet, understanding the essentials—equipment, costs, licensing, and insurance—is key to launching successfully.
Steps to Start Tow Truck Business
Step 1. Choose Your Tow Truck Type
Tow trucks come in various types, each suited for different towing needs:
Flatbed Tow Trucks – Ideal for transporting vehicles without damage.
Hook and Chain Tow Trucks – Best for junk or wrecked vehicles.
Wheel-Lift Tow Trucks – More affordable and suitable for short-distance towing.
Integrated Tow Trucks – Heavy-duty trucks used for commercial or industrial towing.
Your choice will depend on your target market and budget.
Step 2. Equipment You’ll Need
Beyond the truck itself, you’ll need:
Winches and chains
Safety lights and cones
GPS and dispatch software
Uniforms and branding materials
Secure storage yard (if impounding vehicles)
Investing in quality equipment ensures safety and reliability, which builds trust with customers.
Step 3. Startup Costs to Expect
Starting a tow truck business involves several upfront costs:
Tow Truck Purchase or Lease: $50,000–$100,000 depending on type and condition
Licensing and Permits: $500–$2,000
Insurance: Varies based on coverage and location
Marketing and Branding: $1,000–$5,000
Operational Costs: Fuel, maintenance, payroll, and software subscriptions
Budgeting wisely and securing financing or grants can help ease the financial burden.
Step 4. Licensing and Legal Requirements
To operate legally, you’ll need:
Commercial driver’s license (CDL) if operating heavy-duty trucks
Business registration and tax ID
Tow truck operator license (requirements vary by state)
Permits for impounding or roadside assistance
DOT and MC numbers if operating across state lines
Check with your local Department of Transportation for specific regulations.
Step 5. Don’t Forget Business Insurance
Tow truck businesses face unique risks—accidents, vehicle damage, and liability claims. That’s why business insurance is essential.
At Wexford Insurance, we specialize in providing comprehensive coverage for tow truck companies nationwide. Whether you're a new venture or expanding your fleet, we offer:
General Liability Insurance
Physical Damage Coverage
Garage Keepers Liability
Protect your business and your drivers with the right insurance from a trusted agency.
Final Thoughts
Starting a tow truck business requires careful planning, investment, and compliance with legal standards. With the right equipment, proper licensing, and reliable insurance from Wexford Insurance, you’ll be well-positioned to succeed in this competitive industry. Contact now!
