How Much Does a Towing Business Profit

The amount of profit that a tow truck company generates depends on various factors and is different from one company to the next. Factors determining this profit include the number of your employees, the size of your business and whether you provide 24/7 towing services or not. It also depends on whether you serve as a towing company for local service garages or whether you only wait for calls to come in.

Many issues affect the amount of available work for tow truck companies. Weak economy reduces the need for hauling work, as people prefer to struggle and do the task by themselves. If consumers spend less money at stores, there will be fewer delivery trucks on the road, and this reduces the number of heavy towing jobs.

In dealing with losses, some towing companies make arrangements with banks, new car dealers and car loan companies to tow repossessed vehicles. Similarly, even a healthy economy can affect a towing business. If credit is available at meager rates, more consumers will prefer to buy newer cars, which would less likely require towing services.

Ongoing Expenses

The fixed current costs for a towing business includes any licensing fees that must be renewed and all insurance premiums. Depending on the size of your company, other expenses include employee salaries, truck depreciation and repair and fuel costs.

Typical Profits

Tow truck charges an average of $120 per tow, which may include both a flat fee and mileage charge. There is also a standard storage fee which is charged on a daily basis for vehicles stored on the company’s property. The average storage fee is in the tune of $20 per day.

The average towing business owners make anywhere between $30,000 and $100,000 annually. However, this figure is highly affected both positively and negatively by factors we have discussed here in this guide.

Diversification

A towing business can diversify and increase its revenue by offering other services such as emergency roadside assistance. With emergency roadside assistance, you prime yourself to earn from services such as emergency fuel deliveries, providing jumpstart and similar services, changing flat tires among others.

Leasing tow trucks can be another way for towing companies to increase their profits. Some leasing agreements make it possible for one to own the truck at the end of the lease if you can meet the purchase terms. Leasing can be a better choice than buying a new vehicle, if you are not so certain about the market.