If you’ve been driving a truck or are involved in the fleet industry, you may wonder how to become a fleet owner. Starting a fleet business is an exciting but challenging endeavor requiring much preparation and knowledge. You will need to do a lot of research, but this article will point you in the right direction of where to begin when starting the journey towards becoming a fleet owner.
What is a Fleet Owner?
A fleet owner owns and operates at least ten commercial motor vehicles. Fleet owners will be both drivers and operators of their businesses. They handle all aspects of fleet management like forging contracts, hiring drivers, handling payroll, building relationships with other companies and customers, and maintaining equipment. A fleet owner is self-employed.
What Do You Need to Become a Fleet Owner?
Of course, to become a fleet owner, you must meet specific requirements and comply with applicable laws.
USDOT and MC Numbers
Commercial vehicles are required to have a USDOT number in most states. This is how the Department of Transportation marks vehicles that shuttle passengers, haul interstate freight, or transport hazardous materials. In some cases, you will need an MC (motor carrier) number as well. This is required if you transport passengers or federally-regulated goods across state lines. To get either of these numbers, you’ll need to register online with the Federal Motor Carrier Safety Administration (FMSCA) and go through their application process.
Heavy Vehicle Use Tax
If you’re operating a commercial vehicle, you’ll likely need to pay the heavy vehicle use tax levied on vehicles greater than 55,000 pounds that operate on public highways. You’ll need to file Form 2290 with the IRS, and if you own more than 25 fleet vehicles, you’ll need to file this form through a software provider approved by the IRS. The fees are based on the weight of the vehicle.
- 55,000 to 75,000 pounds: $100 base fee for up to 55,000 pounds and $22 for each additional 1,000 pounds
- Over 75,000 pounds: annual $550 fee
Intrastate Licensing
Some states require additional licenses for your vehicles. Check with your State Driver Licensing Agency to see what you may need. These licenses may depend on what you are transporting and where you are transporting it.
International Fuel Agreement
If your vehicles weigh over 26,000 pounds and have two or more axles, you must display your fuel credentials under the International Fuel Agreement (IFTA), a tax program for fuel reports. This is a sticker you display on your truck alongside a photo.
How to Become a Fleet Owner
There are five steps to becoming a fleet owner that will guide you on your way to success.
- Write a Business Plan: This is the first step for any business. Your plan should include projected expenses, how many trucks you will start with, how you will obtain them (purchasing or leasing), costs you’re expecting, and how long you expect it will take before you become profitable.
- Get Your Commercial Driver’s License: Chances are, you’ve already completed this step if you’re a truck driver or have already spent time in the fleet industry. However, if you haven’t, you will need to complete a written test, air brake, truck, and combination vehicle test. You will also need to pass a health physical.
- Buy Your Fleet Equipment: Consider what type of freight you’ll be hauling or what jobs you’ll be completing with your fleet; this will dictate what trucks you need. Consider the trailers you’ll need and the engine strength required to pull them. This is also where you should decide whether to lease or buy your vehicles. Leasing can initially help you save money, but if you want more freedom, buying may be a better choice for you.
- Get Insurance Coverage: Depending on if you choose leasing on owning, you will need to choose different types of insurance. You may need to purchase non-trucking liability insurance, physical damage coverage, motor truck cargo coverage, or lease gap coverage.
- Comply with Regulatory Compliance Requirements: You’ll need to comply with all federal and state regulations to stay in operation. Once you’ve gone through the previous steps, ensure that your vehicles and policies meet these requirements, so you don’t run into any nasty surprises down the line.
Learn More About Fleet Ownership
Our blog can tell you everything you need to know about fleet ownership. We post about saving on fuel, keeping up with your vehicles’ maintenance, and everything in between. Check in regularly as you start your fleet to see what new things you can learn!
