Automobile Towing

Business for Sale Industry Economics




Projected CAGR

2003 - 2020


2020 - 2026






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For the majority of the five years through 2020, the Automobile Towing sector saw good developments. For instance, the US economy has been robust, resulting in a drop in unemployment. With an increase in employment, more people choose to drive to work, increasing overall vehicle miles.

Additionally, as disposable money increased, customers were more comfortable driving rather than carpooling or utilizing public transit. Increased vehicle traffic increases the likelihood of an accident or the need for roadside assistance, hence raising demand for industry services. However, these trends are expected to reverse significantly in 2020, with revenue expected to fall 10.3 percent after hitting a record high in 2019.

The COVID-19 (coronavirus) pandemic has wreaked havoc on macroeconomic circumstances, while mandatory stay-at-home orders and limits on corporate operations have resulted in significant reductions in motor travel. While the pandemic, in combination with highly unpredictable oil prices, resulted in a decline in industry profit throughout the time, continuous demand growth prior to 2020 has resulted in industry revenue growing at an annualized rate of 1.0 percent to $7.5 billion in 2020.

During this time period, harsh weather conditions aided the industry’s survival. Hurricanes Harvey and Irma in 2017 halted motorists and business activities. Operators in these locations saw higher demand, as local governments often contracted them to assist in mitigating storm damage, propelling industry revenue up 9.2 percent in 2017.

The research anticipates sales to continue to expand over the next five years, through 2025. Economic growth and increased consumer confidence are anticipated to encourage customers to acquire newer automobiles, which implies that more drivers will depend on industry services to repair their cars. Increased vehicle complexity will very certainly contribute to this trend.

Additionally, as customers increasingly prefer driving to other modes of transportation, the number of automobiles on the road is likely to increase. Simultaneously, new automobiles are being designed with more safety measures, and modern vehicles have fewer breakdowns than older ones. These developments are projected to temper the projection period’s faster revenue growth. Research forecasts that industry sales will grow at an annualized pace of 3.6 percent to $8.9 billion by 2025.


For the majority of the five years through 2020, the Automobile Towing sector saw good developments. During the first half of the era, discretionary income and consumer confidence increased, encouraging consumers to drive their own automobiles rather than using cheaper options such as carpooling or public transit. As the number of cars on the road and average vehicle miles rise, the likelihood of having a car accident or experiencing other automotive problems rises, creating a larger need for towing and roadside help.

By 2020, however, these beneficial patterns had shifted due to the disruption of typical industrial operations caused by the coronavirus pandemic. As the virus spread across the United States, increasing infection rates and fatalities, state and municipal governments imposed movement restrictions on residents and shuttered unnecessary enterprises. Throughout the spring and summer, a significant portion of the US economy was shut down, and people were urged to stay at home as much as possible.

As a consequence, the number of automobiles on the road in 2020 has decreased significantly, significantly lowering vehicle miles driven during the year. Fewer automobiles on the road should result in less wear and tear on existing vehicles, lowering industry demand. Both developments have stifled demand for industry services significantly this year. Additionally, several towns stopped standard parking laws during the stay-at-home orders, allowing individuals to feel less motivated to relocate their vehicles and therefore reduce their risk of spreading the virus.

As a consequence of this disturbance to regular living in the United States, macroeconomic circumstances have worsened during the last year. Unemployment has increased significantly, and while uncertainty persists, consumer confidence and expenditure have sunk. As a consequence, new vehicle sales are expected to decline by double digits in 2020.

This is anticipated to further constrain the number of automobiles on the road, hence limiting industry demand. As a consequence, the sector is predicted to decrease 10.3 percent in 2020 alone, reversing a trend that began in 2019. While this downturn has slowed overall revenue growth over the last five years, industry revenue is predicted to remain positive, expanding at an annualized pace of 1.0 percent to $7.5 billion.


Revenue for the Automobile Towing sector is predicted to continue expanding over the next five years to 2025, with a high rise projected in 2021 as traffic conditions in the United States normalize. As the economy improves, more customers are likely to choose for driving, resulting in an increase in the number of automobiles on the road. However, there will very certainly be persistent constraints on industrial demand.

Newly produced vehicles are often equipped with improved safety systems that assist drivers in avoiding accidents as a result of recently enacted rules. These include automated parking and braking systems, lane-change and backing assist systems, as well as features that warn drivers of possible road hazards.

Increased adoption of these vehicles is projected to put downward pressure on industry demand over the next five years since they successfully prevent breakdowns and accidents. Nonetheless, new vehicle sales are likely to increase, resulting in an increase in the total number of cars on the road.

Additionally, when more individuals return to work and per capita disposable income increases during the recession, they will resume commuting. Increased wear and tear and larger vehicle traffic on the road increase the likelihood of breakdowns and accidents, hence increasing the need for towing services. In the five years to 2025, industry revenue is predicted to expand at an annualized pace of 3.6 percent to $8.9 billion.

Automobiles are increasingly equipped with new accident prevention systems such as adaptive cruise control, active steering, and changeable lighting. Additionally, autonomous cars are being introduced to the market with driver-assistance technology like as braking assist and lane-keeping assist, which are intended to aid passengers in remaining safe on the road. The continuing development of new technology is expected to reduce car accidents.

Federal legislation aimed at enhancing vehicle safety is also anticipated to put a squeeze on demand for sector services. For example, Federal Motor Vehicle Safety Standard No. 126 mandates electronic stability control (ESC) devices to be installed in passenger cars, multifunctional passenger vehicles, lorries, and buses.

Similarly, Federal Motor Vehicle Safety Standard No. 136 mandates ESC devices to be installed on truck tractors and buses weighing more than 26,000 pounds. These systems regulate the brakes of individual wheels and assist drivers in regaining control of the vehicle under challenging driving conditions. As a result, an increase in the number of vehicle accidents is expected to slow to a 0.6% yearly rate during the five years through 2025.

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This business transports little or large motor vehicles across short or long distances. Additionally, industry operators may provide incidental services like storage and emergency road repair. Automobile towing is nearing the end of its life cycle. This sector offers towing and roadside assistance, which customers consider to be required expenditure. Increased utilization of older automobiles has aided in the growth of the sector.

Industry value added (IVA), which quantifies an industry’s contribution to the entire economy, is forecast to expand at a 2.8 percent annualized pace during the next decade through 2025. In comparison, the US GDP is expected to grow at an annualized pace of 1.9 percent during the same time.

This business normally does not face major revenue fluctuation during economic downturns, since drivers tend to stick with older vehicles, increasing the possibility that they will need towing and roadside assistance. This, however, was not the case in 2020, since the fall was mostly a result of stagnant mobility.

Nonetheless, over the next decade to 2025, the average age of cars is predicted to continue increasing, increasing demand for industry services. Additionally, after the 2020 downturn, disposable income per capita is expected to rise, encouraging customers to acquire new or used automobiles.

When the number of registered cars increases, the likelihood of breakdowns and accidents increases, resulting in increased demand for towing services. Increased new vehicle sales, on the other hand, may jeopardize industry development, since new vehicles break down less often and need less roadside help.

Due to the absence of new goods or services, the sector provides low product differentiation. Operators in the industry compete on a regional level, and consolidation happens on the same regional level. Since a consequence, each operator has a limited possibility for development, as local businesses often operate inside a defined geographic region. Despite this, the number of venues has continued to rise in lockstep with increasing demand.

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