Motor Vehicle Towing Services
Description
Companies in this industry provide towing services for light or heavy motor vehicles; they may also offer other roadside assistance and vehicle storage services. No major companies dominate the industry.
The US motor vehicle towing industry includes about 9,200 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $7 billion.
COMPETITIVE LANDSCAPE
Demand is driven by the average age of the US motor vehicle fleet, the rate of automobile accidents, and parking enforcement by private landowners and municipalities. The profitability of individual companies depends on effective marketing and efficient operations. Small companies can effectively compete with larger ones, because there are few economies of scale in operations. The US industry is highly fragmented: the top 50 companies account for about 10% of revenue.
PRODUCTS, OPERATIONS & TECHNOLOGY
Towing services primarily consist of consent and nonconsent towing. Consent towing usually involves towing a consumer's inoperable vehicle to a designated location, such as a repair facility. In consent towing situations the consumer orders and pays for the towing. Nonconsent towing generally is ordered by law enforcement or private property owners and is paid for by the vehicle's owner. Vehicles are usually subject to nonconsent towing if parked in clearly marked tow-away zones, or after an accident. Prices for nonconsent towing are usually higher than for consent towing, as nonconsent towing is not subject to consumer choice or price negotiation. Nonconsent towing can also involve additional services such as vehicle storage or cleaning up debris after an accident. Towing services account for about 95% of the industry revenues, with maintenance and repair services accounting for less than 5%.
Many towing companies offer roadside assistance in addition to emergency towing after accidents or breakdowns. Typical roadside assistance services include changing tires, delivering fuel, jump-starting vehicles, and unlocking doors. Some companies may also be licensed to perform vehicle repossessions for financial institutions. Most towing companies also earn revenue from holding towed or repossessed vehicles in their impound yards until they are recovered. Companies in large markets may also invest in heavy-duty trucks capable of recovering large vehicles, such as refuse trucks or tractor trailers. These companies often are certified in the handling of hazardous materials.
Some companies contract to offer private impound towing services to private businesses such as shopping centers, hotels, and apartment complexes. These services consist of removing unauthorized vehicles from a business' parking lot, or removal of vehicles illegally parked in handicapped zones or fire lanes. Vehicles towed from private parking areas typically are stored in towing company impound yards. Vehicles that remain in a company's impound yard beyond a specified period of time may be deemed legally forfeited and subject to sale or auction. Terms of vehicle abandonment and forfeiture vary based on local laws.
A typical towing company owns a fleet of fewer than 20 trucks. Fleets may contain a number of different types of trucks for towing vehicles of various sizes. The trucks, sometimes called wreckers, include light-, medium-, and heavy-duty models. Most wreckers are of the wheel-lift variety; these trucks use a hydraulic or pneumatic yoke to lift a vehicle's front or back wheels off the ground before towing the vehicle. Many companies use flatbeds, or car carriers, to transport passenger cars. Because they carry vehicles rather than drag them, flatbeds are seen as safer to operate and less likely to damage a vehicle than wheel-lift trucks. Some tow trucks may be equipped with a boom that is capable of recovering a vehicle from a ditch or embankment.
The US motor vehicle towing industry includes about 9,200 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $7 billion.
COMPETITIVE LANDSCAPE
Demand is driven by the average age of the US motor vehicle fleet, the rate of automobile accidents, and parking enforcement by private landowners and municipalities. The profitability of individual companies depends on effective marketing and efficient operations. Small companies can effectively compete with larger ones, because there are few economies of scale in operations. The US industry is highly fragmented: the top 50 companies account for about 10% of revenue.
PRODUCTS, OPERATIONS & TECHNOLOGY
Towing services primarily consist of consent and nonconsent towing. Consent towing usually involves towing a consumer's inoperable vehicle to a designated location, such as a repair facility. In consent towing situations the consumer orders and pays for the towing. Nonconsent towing generally is ordered by law enforcement or private property owners and is paid for by the vehicle's owner. Vehicles are usually subject to nonconsent towing if parked in clearly marked tow-away zones, or after an accident. Prices for nonconsent towing are usually higher than for consent towing, as nonconsent towing is not subject to consumer choice or price negotiation. Nonconsent towing can also involve additional services such as vehicle storage or cleaning up debris after an accident. Towing services account for about 95% of the industry revenues, with maintenance and repair services accounting for less than 5%.
Many towing companies offer roadside assistance in addition to emergency towing after accidents or breakdowns. Typical roadside assistance services include changing tires, delivering fuel, jump-starting vehicles, and unlocking doors. Some companies may also be licensed to perform vehicle repossessions for financial institutions. Most towing companies also earn revenue from holding towed or repossessed vehicles in their impound yards until they are recovered. Companies in large markets may also invest in heavy-duty trucks capable of recovering large vehicles, such as refuse trucks or tractor trailers. These companies often are certified in the handling of hazardous materials.
Some companies contract to offer private impound towing services to private businesses such as shopping centers, hotels, and apartment complexes. These services consist of removing unauthorized vehicles from a business' parking lot, or removal of vehicles illegally parked in handicapped zones or fire lanes. Vehicles towed from private parking areas typically are stored in towing company impound yards. Vehicles that remain in a company's impound yard beyond a specified period of time may be deemed legally forfeited and subject to sale or auction. Terms of vehicle abandonment and forfeiture vary based on local laws.
A typical towing company owns a fleet of fewer than 20 trucks. Fleets may contain a number of different types of trucks for towing vehicles of various sizes. The trucks, sometimes called wreckers, include light-, medium-, and heavy-duty models. Most wreckers are of the wheel-lift variety; these trucks use a hydraulic or pneumatic yoke to lift a vehicle's front or back wheels off the ground before towing the vehicle. Many companies use flatbeds, or car carriers, to transport passenger cars. Because they carry vehicles rather than drag them, flatbeds are seen as safer to operate and less likely to damage a vehicle than wheel-lift trucks. Some tow trucks may be equipped with a boom that is capable of recovering a vehicle from a ditch or embankment.
Table of Contents
- Industry Overview
- Quarterly Industry Update
- Business Challenges
- Business Trends
- Industry Opportunities
- Call Preparation Questions
- Financial Information
- Industry Forecast
- Web Links and Acronyms
Search Inside Report
Pricing
Currency Rates
Questions or Comments?
Our team has the ability to search within reports to verify it suits your needs. We can also help maximize your budget by finding sections of reports you can purchase.