# How to Start a Towing Company: Starting Checklist

Towing company starting checklist: plan, registration, licenses and permits to research, equipment, insurance, pricing and getting found online, in order.

Source page: https://cheapcheapwebsites.com/small-business-guides/industries/towing/starting-checklist/
Updated: October 6, 2026

Starting a towing company means checking state and city towing licenses or permits, any rotation list requirements, buying the right trucks and equipment, getting commercial auto, on-hook and garagekeepers insurance, finding a storage lot that meets local rules, training drivers in safe operations, deciding on non-consent and private property work, and setting up dispatch and a website.

## Worked example: a two-truck light-duty operation

Ray worked as a tow operator for eight years and opens his own company with a used wheel-lift and a new rollback. He checks with his city and county about towing licenses, rate rules for non-consent tows and the requirements for police rotation lists. He leases a fenced lot that meets the county's requirements for an impound storage facility, with lighting and posted release hours.

He buys commercial auto liability, on-hook coverage for vehicles while being towed, and garagekeepers for vehicles in storage. He signs up with two motor clubs for roadside calls, sets up a dispatch app that tracks trucks and calls, and launches a website with his service area, services, a request-help form and licensing details. He trains himself and his second driver on traffic incident management and the safe use of each truck.

## Setup steps in order

| Step | Done looks like |
| Licensing check | City, county and state rules known |
| Business setup | Entity, EIN, banking |
| Trucks and equipment | Wheel-lift and rollback ready |
| Insurance | Commercial auto, on-hook, garagekeepers |
| Storage lot | Meets local requirements |
| Rotation and motor clubs | Applications submitted |
| Dispatch | App, phone routing, call logs |
| Training | Safe operations and traffic incident management |
| Website and Google | Service area, request form, licensing |

## Mistakes new towing companies make

- Charging non-consent rates above local maximums
- Storage lots that do not meet local requirements
- No on-hook insurance
- Relying only on motor clubs that pay low rates
- Drivers without traffic incident training

## What this industry needs from a website

Dispatch contact, coverage and service information.

- Home with call button
- Services
- Service area
- Rates disclosure where required
- About and licensing

## Free tools

Opening timeline planner

## Common questions

### Do I need a towing license?

Many cities, counties and states require one, especially for non-consent towing. Check every jurisdiction you work in.

### What insurance do towing companies need?

Commonly commercial auto liability, on-hook (cargo) coverage and garagekeepers for stored vehicles. Ask an agent who insures towing.

### How do I get on the police rotation list?

Apply through the local police or sheriff agency; requirements often include equipment, response times, insurance and a storage lot.

### Do FMCSA rules apply?

They can, depending on truck weight and whether you cross state lines. FMCSA's registration pages explain.

### Should I start with motor club work?

Many new companies do for steady calls; build direct accounts alongside it.

## Sources

- SBA: 10 steps to start your business: https://www.sba.gov/business-guide/10-steps-start-your-business
- SBA: Apply for licenses and permits: https://www.sba.gov/business-guide/launch-your-business/apply-licenses-permits
- Towing and Recovery Association of America: https://www.traaonline.com/
- FMCSA: Registration: https://www.fmcsa.dot.gov/registration

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