A properly run towing business can make a good deal of money. A big reason of this is because the industry is heavily regulated by the government. Local agencies typically limit the number of towing companies. This cuts down on competition and keeps the prices relatively high. This is why so many people want to start a towing business. But how much does it cost?

The exact costs really depends on what city you plan on operating in. If you live in a big city, starting one isn’t cheap. Figure at least several hundred thousand dollars if you live in a big city because there’s a good chance you will need to buy a lot and and a tow truck license from an existing business.

However, there are strategies to keep your start up costs low. Consent licenses are typically far easier to obtain than non-consent. So you could specialize in towing broken down cars and taking them to a mechanic shop (which often you can work out a special deal to get a percentage of the repair fee.) Once you build up experience, working capital and relationships you can expand into the far more profitable non-consent towing (removing illegally parked cars.) You can also buy used equipment and cut down on labor costs by driving the tow truck and doing the work yourself.