How to Start a Towing Business in 2026

A towing business earns its money in the worst moments of other people's days: the breakdown on the interstate, the crash at 1 a.m., the car blocking an apartment complex's fire lane. It is also one of the more regulated ways to run a truck. In practice, learning how to start a towing business comes down to six moves: decide what you will tow and for whom, register with the Federal Motor Carrier Safety Administration (FMCSA) where federal rules apply, get the state and local licenses and permits your market requires, insure every truck for the work it does, buy equipment that fits your plan, and build accounts with motor clubs, police agencies, property owners and repair shops before you depend on them.

This guide works through seven steps: choosing your lane and equipment, federal registration and CDLs, state and local permits, insurance, revenue accounts and pricing, storage lot rules, and dispatch and safety. Then come common mistakes and the software question. Federal rules are the same everywhere, but states, counties and cities regulate towing in very different ways, and the details change from one jurisdiction to the next. We use Texas as a worked example because its regulator publishes clear requirements, and you should confirm every point with your own state and local authorities before you buy a truck.

Towing splits by weight class and by who calls you. Light-duty towing covers cars, SUVs and pickups, and it is where most new companies start. Medium-duty covers box trucks, small buses and larger work vehicles. Heavy-duty covers semi-trucks, buses and heavy equipment, and heavy recovery, such as uprighting an overturned truck, is a specialty of its own. Each step up means costlier equipment, more training and, for heavier trucks, a commercial driver's license.

Then decide who you will work for, because each revenue stream brings its own rules. Motor clubs and roadside assistance programs send consent tows and service calls for their members. Police and highway patrol rotation lists send accident and nonconsent tows, usually with response-time and storage requirements. Private property impound means towing illegally parked cars from contracted lots. Body shops, dealerships, auctions and fleet operators need vehicles moved. Many new companies start with one or two light-duty trucks on consent and motor club work, then add a storage lot and rotation work as they grow.

Equipment follows that plan, and it is the biggest check you will write. A new rollback on a medium-duty chassis is a six-figure purchase once the chassis, the bed and options are added up, a used light-duty truck can cost far less, and heavy wreckers and rotators cost several times more than a rollback. The chassis, the body and options such as a wheel-lift on a rollback are often priced separately, so get written quotes from at least two dealers and upfitters and compare the full configuration, not the headline price.

Federal registration depends on your trucks and where they go. According to FMCSA, if you operate a vehicle with a gross vehicle weight rating or gross combination weight rating of 10,001 pounds or more in interstate commerce, you need a USDOT number, and there is no charge to get one. Interstate commerce includes trips that cross a state line and trips within one state that are part of a movement that starts or ends in another state or country. Some states also require USDOT numbers for intrastate carriers, so check your state even if your trucks never leave it.

Operating authority, often called an MC number, is separate. FMCSA requires it for for-hire carriers transporting federally regulated commodities in interstate commerce, while carriers that haul only exempt commodities do not need it. How those rules apply to a particular towing operation depends on what you tow, for whom and where, so use FMCSA's registration tools or ask FMCSA directly rather than assuming either way.

Driver licensing follows FMCSA's tow truck guidance. A driver needs a Class A CDL when the combination's gross combination weight rating is 26,001 pounds or more and the towed vehicle alone is rated over 10,000 pounds, and a Class B CDL when the tow truck alone is rated at 26,001 pounds or more and tows either nothing or a vehicle rated at 10,000 pounds or less. CDL drivers are also covered by federal drug and alcohol testing rules, so set up a testing program before your first CDL driver takes a call. Many light-duty operations sit below these thresholds, but run the numbers for every truck and every combination you plan to tow.

State and local rules are where towing gets specific, and Texas shows how detailed they can be. As of 2026, the Texas Department of Licensing and Regulation (TDLR) licenses tow companies and issues a permit for each truck in one of three types. An incident management permit covers nonconsent tows initiated by a peace officer and tows from traffic incidents, including any tow from a public roadway. A private property permit covers nonconsent tows authorized by a parking facility owner, such as towing from an apartment complex or restaurant lot. A consent tow permit covers tows the vehicle's owner or operator requests. Each permit carries its own insurance minimums, costs about $75 per truck, and lasts up to one year, and every permit expires with the company license.

Texas also licenses the people. Tow operators hold incident management, private property or consent tow licenses that match the work, and incident management and private property operators must be certified by an approved program before they can be licensed. Storage lots, which Texas calls vehicle storage facilities, are licensed separately, and anyone who works at one needs a storage facility employee license or a tow operator license.

Other states may regulate towing through a different agency, such as the state police or a transportation or utility commission, and many cities and counties add their own tow permits, rotation list rules and caps on nonconsent tow rates. Before you buy a truck, call your state regulator, your city's permit office and the law enforcement agencies whose rotation lists you hope to join, and ask for their requirements in writing.

Towing insurance is a stack of policies, and your permits, rotation agreements and motor club contracts will set minimums for several of them. Commercial auto liability covers injuries and damage your trucks cause on the road. On-hook or cargo coverage covers the customer's vehicle while it is on your truck or in tow. Garagekeepers coverage covers customer vehicles in your care, custody and control at your lot or shop. General liability covers your premises and operations beyond driving, and workers' compensation covers employees as your state requires. Many operators add an umbrella policy on top.

Texas shows how minimums work in practice. As of 2026, TDLR lists, per truck per incident, $500,000 in liability and $50,000 in cargo coverage for incident management trucks, $300,000 in liability and $50,000 in cargo for private property trucks, and $300,000 in liability with no cargo requirement for consent tow trucks. Police rotation programs and motor clubs may ask for more than the state minimum, so collect every account's requirements before you shop for coverage.

Use a broker who writes towing business. Premiums are one of your largest fixed costs, and they depend heavily on your drivers' records, your claims history and the kinds of tows you do. Hire drivers with clean motor vehicle records, document your training, and keep incident reports thorough, because those details show up at every renewal. A clean first year is the best discount you will ever get.

Revenue in towing comes from accounts more than from one-off calls. Motor clubs and roadside assistance programs are the usual starting point: you apply to become a provider, meet their insurance and equipment requirements, accept their rates, and are measured on how fast you arrive. The volume can be steady, but the club sets the rate, so model what each call earns after fuel, labor and wear before you commit a truck to it. Police rotation lists bring accident and nonconsent work, often at rates set or capped by the agency or city, in exchange for response-time commitments and storage requirements. Private property contracts with apartment complexes, retailers and parking lots bring impound tows under state rules on signage, notice and fees.

Commercial accounts are often the steadiest money. Body shops, dealerships, auctions, rental car branches and fleet operators need vehicles moved on a schedule and usually pay on account, which makes invoicing and collections part of the job.

For your own retail and account rates, most operators charge a hook-up or base fee, a per-mile charge, and extras for winching, dollies, waiting time, after-hours calls and specialty equipment, with storage billed per day. Write those into one rate sheet, check them against any caps your state or city sets for nonconsent tows, and make every driver quote and invoice from the same sheet. Consent tow customers should hear the price before the hook goes on, and see it in writing where possible.

A storage lot turns towing from a service into a business with inventory, and it brings its own rules. Where your state licenses storage facilities, as Texas does, expect requirements for fencing, lighting, signage, posted fees, hours when owners can retrieve vehicles, and staff licensing. Cities often regulate lots through zoning as well, so confirm the address works before you sign a lease.

The paperwork is the harder part. When you store a vehicle after a nonconsent tow, state law typically sets how quickly you must notify the registered owner and any lienholder, what storage fees you may charge and how they accrue, what the owner must show to get the vehicle back, and how long you must wait before an unclaimed vehicle can go through a lien or title process. A late notice can cost you the right to collect fees, so build the process before the first car rolls through the gate.

Run releases the same way every time. Check ID and proof of ownership or authorization, take payment, have the person sign a release, and photograph the vehicle's condition at intake and at release so damage disputes have an answer. Keep an inventory log of every vehicle on the lot with its intake date, reason for tow, notices sent and fees owed, and reconcile it against the lot every week. The lot is where small towing companies quietly lose money, usually in fees that were never billed or notices that went out late.

Dispatch decides whether a towing company keeps its accounts. Motor clubs and police agencies measure your response time, so you need one place where calls land, a clear view of which truck is free and closest, and a way to confirm the arrival time with the customer. Small operators often dispatch from the owner's phone at first; as you add trucks, a dedicated dispatcher and dispatch software start to pay for themselves by catching calls that would otherwise go to the next company on the list. Our guide to dispatching tow trucks and tracking jobs in real time goes deeper on the workflow.

Drivers are your product. Hire for clean driving records and a calm manner with stressed customers, verify licenses and certifications, and run drug and alcohol testing where federal rules or your contracts require it. Train on securement, winching, wheel-lift and flatbed technique and scene safety, and document every session. Your state may require specific certification for some tow types, as Texas does for incident management and private property operators.

Roadside scenes are dangerous, so make safety a condition of the job: high-visibility apparel, warning lights, cones or flares, a pre-trip and post-trip inspection of every truck, and a rule that drivers keep their eyes on traffic. Log every incident and near miss and review them with the team. Clean records keep people alive, and they keep your insurance renewable.

Towing software has to handle dispatch speed, account billing, storage and compliance. Our best towing software roundup compares tow-specific platforms, and our towing business software guide explains what each part of the stack does.

Deelo, the platform we build, runs the business layer. Field Service turns every call into a work order on a dispatch board, prices it from a rate sheet built as a price book (hook-up, mileage, winching, after-hours), texts the customer the driver's name and arrival time (texts run on the Communications add-on), captures a signature on the driver's phone for authorization or release, and collects card payment on scene. Invoicing bills body shops, dealers and fleet accounts on net terms such as Net 30, and the CRM keeps every account, from motor clubs and police agencies to property managers. Fleet keeps each truck's records, pre-trip and post-trip inspection reports, maintenance alerts, incident reports and a document vault that flags registrations, permits and insurance certificates as they near expiry. HR keeps copies of each driver's license and certifications on the employee record, and Planning schedules the on-call rotation as a weekly shift calendar.

Deelo is not a tow-specific system. Deelo does not receive digital dispatches from motor club networks or police rotation systems, and it does not run an impound lot: there is no per-day storage fee accrual, owner and lienholder notice tracking or lien sale workflow. If storage and motor club integrations drive your business, pair Deelo with a towing platform or choose one outright.