Wrecker Service Business Guide
By Paul W.
About
The Author:
After I left the US Coast Guard I was offered a job with US Customs but decided to turn it down to go into my family business. My parents had 5 gas service stations so my brother in law with me and my parents worked together running our family business. Tow trucks were always coming and going dropping off cars for repair. One day the towing company’s driver damaged my sister’s car while dropping another one off.
With my connections I soon started towing for the highway patrol and the Sheriff’s office so business was going good and it just kept growing. Pretty soon I had 15 tow trucks and my wrecker business was doing great.
AAA & Law Enforcement:
To be able to tow for AAA and law enforcement agencies like the Sherriff’s office or Highway Patrol you have many requirements you need to have in place before they will accept you. For instance AAA only allows so many wrecker companies per each area so I had to wait for one company to drop out to free up a spot for me to take.
In order to tow for most law enforcement agencies you have to have certain licenses and insurance. Many agencies require you have a secure fenced lot to store the cars that you tow. You need to be open certain hours usually 24 hrs a day for towing and certain hours for car pickup for the owners whose car you towed. You need to have live dispatch 24 hrs a day so you were always on call and could respond to anything needed.
To get in with the Sherriff’s office or any state or county municipality you have to submit a form to be accepted and it will help a lot if you know someone. In my case when I was involved with the gas stations many of the officers came in for fuel and service so they knew we had an honest business. I became friendly with many of them who I am sure they put in a good word for me when the time came for them to consider my application to become one of the wrecker services for their law enforcement agency.
Each agency would have different requirements you had to meet in order to get a contract with them. They would require you to have a certain amount of class A, B and C type tow trucks. Your storage lots had to be within so many miles of each tow zone in order for you to be able to tow in that area. This would make it so people who had their vehicle towed didn’t have to drive 50 miles to pick it up.
They usually set you up on a rotation, at first it used to be every other vehicle would get a different wrecker company. They finally switched it to every other incident to simplify the system and make it more efficient by working with just one wrecker service on the scene.
Towing for Local Businesses:
We also towed for 12 different car lots for warranty and or for service issues. We would have a verbal contract that already had our prices negotiated and what we expected from them and what they expected from us. Certain times towing would be free under certain situations. Basically if they didn’t get paid for a tow you would not. But you would easily make up for the free calls by handling all of their other warranty and service calls. One car lot say on a Monday morning would have 20 calls for wrecker service because of breakdowns over the weekend.
You really had to stay on top of your car accounts bringing them doughnuts and sometimes a nice pen set to keep the other towing companies from trying to steal your account. Staying friendly with the right people would help guarantee they kept using your wrecker service.
We had about 200 local businesses and parking lots that we towed for. These would be for illegally parked cars or abandoned vehicles. In order to get these accounts you just knocked on doors and passed out cards. Once you received an account sometimes you would have to put up tow away signs so people would know who to call to get their vehicle back. You would give the manager of the property a contract and all contact information to get a hold of your wrecker dispatcher when they needed a vehicle towed.
How a Call Comes In:
If a vehicle was illegally parked or the vehicle was abandoned in an apartment complex the manager would call your dispatch and give the details of what car they wanted towed. Sometimes apartment complexes would hire off duty police officers during the peak hours (9:00pm am 4:00am) to watch their parking lot and if a vehicle needed to be towed they would be the ones who called it in.
Now when the call came in to dispatch your dispatcher would radio the wrecker driver to go and pick up the vehicle and bring it back to your storage lot. All vehicles had to be called into the local police department. On busy nights usually weekends we would hire an off duty police officer to sit at the lot and call in the cars that we towed in. This helped with confrontations from vehicle owners who just had their vehicle towed. Instead of arguing with the tow truck driver they would have to argue with a police officer which generally didn’t happen.
If you offer wrecker service in a college town and have contracts with the college apartments in that town you will be very busy on weekends and during any college sporting event.
When someone would come into pick up their vehicle you would have to fill out the required paperwork and notify the local police department to let them know it was picked up. If a vehicle was not picked up within a certain period of time you could get a lien placed against their license that they would have to settle before they were able to get their licensed renewed.
We charged flat rate per tow plus so much a mile. Storage fees were $10.00 per day for outside storage and $20.00 per day for inside. If a vehicle was a high end expensive vehicle or if this vehicle could get damaged by the weather we would store it inside.
Hiring Drivers:
We just ran ADS in the local papers for wrecker drivers and never had much of a problem getting drivers when I started my wrecker service. As time went on insurance companies became stricter on who they would insure so the pool of tow truck drivers who had a good enough driving record to hire became smaller. Then the regulations for licensing drivers became more difficult. So it started to become cut throat between wrecker companies in recruiting drivers.
I would pay drivers a salary plus commission on how much money they brought in. A driver that worked hard could make real good money for themselves and you. These were the drivers every wrecker company wanted so they were always trying to steal them away with better commissions or benefits. We paid our drivers $250.00 per week salary plus 10% commission on anything they brought in during the day and 30% commission on everything they brought in at night.
So the trick in hiring a driver is to find the ones who are quick to get out of bed and respond to the call. The more they made the more you made so you needed drivers who were hungry and wanted to make money. Each driver would have a certain geographic area they covered so we could keep the response times down to about 15 minutes during the day and 30 minutes at night.
The wrecker driver had to have his own hand tools and safety equipment. To make sure they maintained the truck and kept it clean, we would bring them in 2 hours a week on the clock to maintain our tow truck they were driving. It was the driver’s responsibility to make sure they were keeping our truck in good shape and clean. Preventive maintenance is the key to keeping your fleet operational.
At any given time I would have between 20 and 25 employees that worked for my corporation. This in itself is a full time job overseeing the day to day operations. So with this amount of overhead you have to keep the tow trucks on the road and busy constantly. So make sure you take your time in hiring employees making sure that they can and will do the job. Pay them well and treat them right or you will never keep the good ones.
How Contracts Work:
You will find it takes a lot of time keeping up with demand of replacing your antiques. Many people will take off 3 months just to travel and purchase antiques to sell the rest of the year. I recommend even though I did very well with my antique store if I were you I would consider renting that space in an antique mall maybe even a couple of different ones and selling on EBay or yahoo auction etc… while running your business out of your home. This way you do not have to be at the store 6 days a week which will help free up your time and you can close down for vacation whenever you like freeing up your time making it your own.
If it was an apartment complex or parking lot where you were going to be the exclusive towing company called you would have a contract with them. Anytime you were going to be the exclusive towing company you would usually have a written contract explaining all the details involved.
If you were towing for car lots usually it would just be a verbal contract stating your charges. You would have to really stay up on these relationships to make sure someone did not steal your account.
If you were going to be put on a rotation basis for say law enforcement this was done by meeting the requirements they had for wrecker service companies. Every 6 months someone from the enforcement agency you towed for would come out and inspect your trucks, equipment and make sure your licenses and insurance were current. They checked your gates and lots to make sure they were secure and kept up. Usually they would have three towing companies on rotation for each zone or area they had. So even know you met the requirements for that zone you may have to wait until someone went out of business or they dropped off for failing to meet requirements to be able to be considered to tow that zone.
To get city wide exclusive towing where you would be the sole provider you would have to bid for these cities. This took some practice learning how to bid because everything was broke down and had to be bid with a percentage on each type of towing service that could be provided. So some items you knew you could bid low and some you would bid high. So once you knew where you made your money from bidding became easier and you will succeed at being awarded these contracts.
Cars left on Your Lot:
We would get cars left in our storage areas all the time that people did not pick up either because they were junk or they did not have the money. You would have to notify them after 24 hours that they were being charged storage fees plus what they owed for towing to come get their vehicle.
Then after 30 to 90 days depending on the state you operate your wrecker business in you own the vehicle. If it was a decent vehicle we would auction them off to recoup as much money as possible or one of my employees would purchase it for themselves. Junks we sold to the junk yards for parts. One time one of the local cities gave me a contract to pick up all of the abandon cars in the city so we went around with law enforcement and any vehicle they had previously ticketed we picked up and took them to the cities storage lot. We ended up with 2000 vehicles. 60 days later we towed them all to the scrap yards. We were paid to pick them up and we got to keep the scrap money for hauling them away.Once in awhile you would end up with a nice car that was used by a drug dealer or some other illegal activity and the registration would have a fictitious name so no one would come claim it. One time I ended up with a 1 year old Mercedes convertible that after 60 days I paid the fees myself and had it titled to me.
Advertising Your Wrecker Service:
I did a lot of advertising much of was doing community service events. I would let the local high schools use the flatbed trucks to make their home coming floats on. We would drive in parades and help out at local kids sporting events.
I had fake money printed up that we would give to everyone we towed. They could use this fake money to get $10.00 off their next tow. We would have our wrecker service business contact information on the back and some safety measure to take if they broke down.
We would buy doughnuts and coffee for the guys at the car lots or garages that used us. Signs on all of our trucks this always works great because they are constantly driving around town or in parking lots etc…
Yellow pages and also having a website is vital to survival today. Each driver also was responsible to try and pass out cards when they got the chance. This helped them and me.
Some years we would sponsor a little league team or bowling team. Purchase banners that hung in the outfield at baseball games. Anything in the local communities always worked great.
All the drivers carried pens and note pads that had our wrecker business information on them that they would give to any garage they towed a vehicle to. We always would thank them for the business and see who they currently used for towing and asked if they were satisfied with their current towing company. We would explain to them what type of operation we had the types and number of trucks we had what vehicles we could or could not tow. Give them our rates etc…
I would take crashed vehicles to certain body shops because they would give us a kick back of say $100.00 some shops I would not take the money but when I needed a truck painted they would paint it for me. If you bring the body shop 10 or 15 vehicles that he makes good money from when you get a truck that has a fender bender they will be more than happy to help you out.
Tow Trucks & Safety:
If you want to have a large and growing wrecker business you need to have a tow truck for very vehicle on the road from flat beds to trucks that can tow a semi. At one time I had 8 flat beds for towing passenger vehicles. I had a 28 foot flatbed for hauling big trucks along with small tow trucks like you see every day around town and other specialty trucks.
You need to have a truck for anything they vehicle they throw at you. Now unless you are rich don’t expect to have everything at once. I started slow and just kept growing. These trucks are very expensive so you need to keep them on the road working as much as possible.
Normally we would lease all of the small tow trucks because of all of the miles we put on them. We would be constantly turning them in for new trucks at the end of each lease. A driver will put on 500 miles a day on your small tow trucks. The large class C trucks we would purchase.
You also had to have a very good safety record to help keep your insurance prices down. The way you did this is by having good drivers and good equipment. You are going to have accidents and fender benders because you are constantly on the road and in parking lots. But keeping them to a minimum will save you a ton of money.
Whenever there was a major accident I always showed up with my truck because of the procedures that needed to be followed and the dangers in being there. When you respond to an accident especially at night you have to be extremely careful with other drivers on the road. You are highly exposed when hooking up a vehicle to be towed and can easily be hit by other drivers that are not paying attention.
When there is an accident that was from drunk driving or there was a fatality special measures are taken. You have to work with the police and help them with the accident as far as removing the vehicle and any parts lying around. They will want it stored in a certain manner so not to do any further damage. They will want it not to be disturbed until someone can examine the vehicle anytime it is in a crime, fatal accident, driving under the influence etc…
Things You May Not Know:
When you get called out for an accident by law enforcement the tow truck company has to sweep up the glass and pick up the pieces. One time there was a truck hauling junk refrigerators and it rolled over the driver either split, got hurt or arrested and me being the wrecker driver on the scene had to pick up all of the junk and haul it off.
When you get called out for a stolen vehicle or an abandoned car in a ditch or a lake the tow truck driver or someone the company hires has to dive into the lake and hook up the car and tow it away. I did all the diving myself but you have to have someone watch for gators and snakes.
The best money towing for me was always highway patrol or the sheriff’s department. It was also the most interesting. Besides accidents and abandoned cars I would tow for civil cases. These would be cases were someone was sued and they lost their vehicle in collection. Sometimes it would be a whole fleet of vehicles from a business.
Repo towing is usually done by people who specialize in just going after repos. I stayed away from that.
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