Cost of a Towing Business

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Originally written in 2014.  Updated 2024.

 

Equipment based on PSP FR-6 requirements

1 Light Duty Tow Truck

  • ​Used $35,000 to $45,000 plus tax and tags
  • ​2024 $75,000 to 105,000 plus tax and tags
  • ​New $75,000 to $90,000 plus tax and tags
  • ​2024 $125,000 to $175,000 plus tax and tags

1 Light Duty Rollback

  • ​Same as above

1 Medium Duty Rollback

  • ​Used $70,000 to $80,000 plus tax and tags
  • ​2024 $85,000 to $120,000 plus tax and tags
  • ​New $125,000 to $150,000 plus tax and tags
  • ​2024 $190,000 to $250,000 plus tax and tags​​​

1 Medium Duty Tow Truck

  • ​Same as above

2 Heavy Duty tow trucks

  • ​Used $225,000/per truck plus tax and tags (truck approximately 7 years old)
  • ​2024  $450,000/per truck plus tax and tags (truck approximately 5 years old)
  • New  $370,000/per truck plus tax and tags
  • ​2024  $575,000/per truck plus tax and tags

Truck tractor for separating combinations as required by law

  • ​Used $30,000 to $50,000 plus tax and tags
  • ​2024 $85,000 to $125,000 plus tax and tags
  • ​New $150,000 to $180,000 plus tax and tags
  • ​2024 $195,000 to $235,000 plus tax and tags

The above figures do not include the extra $1500 (2024-$2500) to $16,000 (2024-$25,000) needed in chains, straps, etc to equip each truck for towing and recovery.  The equipment listed above is the minimum requirement.  Specialty equipment such as a Landoll trailer ($50,000 used) (2024 $95,000 used), lowboy trailer ($70,000 used) (2024 $83,000 used) or a rotator wrecker ($450,000 used) (2024 $750,000 used) add significantly to the cost of doing recovery work.

Tags $36 (2024 $54) for R/T tag to $1685 (2024 $1800) 80,000 lb apportioned tag

Qualified tow truck operator

  • ​$20/hr times 168 hours/week=$3360/per truck/week=$174,720/truck/year plus benefits.
  • ​2024 $30/hr times 168 hours/week=$5040/per truck/week=$262,080/truck/year plus benefits.

A certified heavy duty operator

  • $40/hr times 168 hours/week=$6720/week=$349,440/year
  • ​2024 $45/hr times 168 hours/week=$7560/week=$393,120/truck/year plus benefits

(each driver allowed to work 60 hours in 7 days, which requires 2.8 employees to cover per truck)

Training for qualified operator

  • ​$1540/operator to start to operate tow truck, recertification thru WreckMaster every 3 years
  • ​2024 $1800/operator, does not include travel and lodging

Office Personnel to cover phones

  • $15/ hr times 168 hours/week=$2520/week=$131,040/year plus benefits
  • 2024 $20/hr times 168 hours/week=$3360/week=$174,720/year plus benefits

(requires 4.2 employees based on 40 hour work week)

Fuel

  • $4.20/gal, average heavy duty truck gets 4 miles/gal, medium duty 8 miles/gal.
  • ​2024 $4.59/gal (PA pricing)

 

Legal/Professional fees

​Attorney

  • $350/hour for handling business filings, zoning hearings, lease/purchase agreements
  • ​2024 $450/hour

​Accountant

  • $125/hour for tax filings and statements for obtaining loans
  • ​2024 $200/hour

Insurance

  • ​Light/medium duty $1800 to $2000/truck  2024-$2100 to $2700/Truck
  • ​Heavy duty $3400/truck  2024 $3800 to $4300/truck
  • ​Property $1500-2500  2024 $5000 to ??
  • ​General Liability $4500  2024 $6000 to ???
  • ​Workman’s comp based on payroll
  • ​Health care based on plan chosen/deductible

​Umbrella Policy – at owner’s discretion

  • $8000 for $2,000,000 coverage
  • 2024 $20,000 for $5,000,000 coverage

Location – The cost of a shop and storage facility to house a towing company based on a 7500 square foot facility shop and offices and a 1-3 acre storage facility zoned to accommodate a towing company.

​Rent

  • $3500 to $5000.00 per month
  • ​​2024 $5000 to $7500 per month

Own

  • $600,000 to $1,000,000.00 with existing facility
  • 2024 $1,500,000 to $3,000,000 with existing facility​
  • $1,000,000 to $2,250,000 to purchase land and build a facility​
  • 2024 $3,000,000 to $4,500,000 to purchase land and build a facility

Taxes

​Payroll taxes

​Property tax

​Income tax

​Fuel Tax

​Use tax in some municipalities

​

The following costs are NOT figured in:

  • Utilities-electric, telephone, internet
  • CDL for medium and heavy duty operators
  • DOT drug/alcohol/physical $200/driver/every 2 years
  • Maintenance, wear and tear, replacement costs
  • Interest on business loans
  • First born child needed to give away to get collateral to get started
  • Fence for secured storage yard
  • IFTA sticker
  • UCR Registration
  • Association dues
  • Uniforms
  • Bank fees
  • Credit card fees
  • Retirement funding
  • Health Insurance
  • Life Insurance
  • Disability Insurance
  • Facility Maintenance
  • Every local organization that thinks you have unlimited funds to make donations to their cause.

Prepared by Gwen Null, May 2014

UPDATED January 2024

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