Interested in starting a tow company in Michigan? The laws that govern towing are set at the state and local levels, not at the federal level. Learn what you need to know about Michigan tow-truck laws in order to start your own towing company in the Great Lakes state.
Get a Class B CDL
In Michigan, most tow-truck drivers will need a Class B CDL because the gross combination weight rating will likely be more than 26,001 pounds, which is the minimum weight for needing a CDL in this state for commercial tow vehicles.
Most people who want to start a tow company intend to do much of the driving themselves, even though strategic planning and other day-to-day business activities may keep you in the office more than you like. Regardless, go ahead and get your Class B CDL and be aware that anyone you hire as a tow truck driver in Michigan should have this license as well.
Understand Michigan Tow Truck Laws
Michigan tow truck laws require towing companies to follow a specific procedure when towing a vehicle at the request of a private property owner rather than at the request of the vehicle owner. In short, when a tow company is contacted about an unauthorized or seemingly abandoned vehicle on private property, the company must give police a 24-hour notice before towing the vehicle.
These laws are in place in order to give the police a chance to cross-reference the vehicle in their databases in case it's stolen. The police department also takes on the responsibility of informing the vehicle owner of where the vehicle has been taken and how it can be recovered, which the police only know because the tow company reports its intention to tow the vehicle to its facility.
Another Michigan tow-truck law example involves soliciting at the scene of an accident. If you go to the scene of an accident on public property and attempt to sell your towing services, you can be fined up to $1,000. However, exemptions do apply, including helping stranded motorists in a "non-nuisance" way. Knowing what you legally can and cannot do as a tow-truck driver can save your budget and reputation.
In addition, the Michigan State Police place caps on the amount you can charge owners for recovering an abandoned vehicle from your lot, and you'll need to know how much you can legally charge in order to avoid lawsuits and to create your company budget.
Contract With Michigan State Police
The Michigan State Police operate a no-preference wrecker list. When a driver involved in a collision needs towing, the police will contact the preferred tow company.
However, some drivers don't have a preferred tow company in mind. In this case, the police contact the companies on the no-preference wrecker list in order until an appropriate one is found. As a new tow company in Michigan, you should make it a priority to apply as a contractor with the Michigan State Police in order to get this business.
You can also contract with AAA as a roadside-assistance service provider, which can help you gain more business as you become more established in your community.
Join the Michigan Towing Association
Finally, consider joining the Michigan Towing Association in order to connect with other professionals in the towing industry, access resources designed for tow companies and stay up to date on any changes in rules or regulations that could affect your business. Joining a professional association also helps build your credibility in the eyes of customers, so list any professional memberships or credentials on your website.
- Michigan Towing Association: Home
- Michigan Department of Attorney General: Towing: Know How to Get Your Vehicle Back and Challenge Unauthorized and Unreasonable Fees
- Michigan Office of Secretary of State: Obtaining a CDL
- Michigan Legislature: Michigan Vehicle Code (Excerpt)
- Michigan State Police: Vehicles: Towing, Reporting, Inspection, and State Wide Wrecker Policy
- Working capital for your towing business can pay for fuel costs, truck repairs and maintenance, insurance, paperwork and forms, as well as anything else that may be needed when performing daily business operations. A gas card or small business credit card can also give your towing company a source of extra capital to pay for fuel costs and other maintenance needs.
Cathy Habas specializes in marketing, customer experiences, and behind-the-scenes management. Cathy has contributed to sites like Business and Finance, Business 2 Community, and Inside Small Business. She served as the managing editor for a small content marketing agency before continuing with her writing career.