So You Want to Start a Limousine Business….



Info You Need to Know Before you Buy a Limousine

Not much can be as rewarding as being in charge of your own fate by owning your own business.  Not much can be as challenging or confusing either.  Every business owner will experience their own set of bumps along the road to success, and starting a limousine or public transportation business comes with its own set of forks and twists unique to the industry.  There are many blogs and articles on being successful once your business has started, and we’ve listed a few links below if you’re interested.  This post is focused on the pre-start up, how to start the process and resources to help you confirm this is the business plan for you.

1. Limos or Taxis …or Bus? Oh my! – Choosing your “Team”

Even the very first step of picking what type of transportation you will provide can be daunting for some, especially as industry changes add new transportation subtypes.  Limousines, Non-Emergency Medical services, shuttles, TNCs and taxis all fall under the official industry title of “For Hire Public Auto Transportation”. The difference between the main types of For Hire Public Auto Transportation might seem slight but they are key in not only how you market to and obtain clientele, but also can be very important for other business costs.  Depending on where you are located, there are a few main types of Public Auto Transportation, and each type has its own governing authority(ies), and permit and insurance requirements.

The first part of the step one is choosing your main transportation type, and sub division after that.  The main division in Public Auto (also called “livery“) work is pre-booked or on-demand.  Pre-booked services are normally limousine services, bus operations and some shuttle services.  On-Demand services tend to be taxis, Transportation Network Carrier (TNC) operators, and Non-Emergency Medical (NEMT) providers.  The latter two are generally dispatched from a home office or dispatch center, while taxi can be owner operated or part of a larger operation with shared dispatch.  Every state has different rules on requirements for each type of transportation, but here is a comprehensive list of how/where to apply for each state, which may help you narrow down your options.

2. R & D – Read and Do Your Homework

Once you have your preferred type of transportation service settled, you need to find a vehicle(s) to fit your business plan and clientele needs.  If you intend to do luxury or executive transportation, you should look for newer (the newer the better for these fleets), high end, sedans, SUVs or smaller stretched units.  High end vehicles such as Mercedes, Cadillac, Lincoln, Audi, Jaguar, etc. are traditional.  For an on demand or shuttle type service, minivans, passenger vans, and larger SUVs are often utilized.  For TNC and Taxis, sedans and minivans are common and for NEMT minivans, especially those with wheelchair lift equipment are the vehicle of choice. But the right type of vehicle is only part of the equation. Several things to consider when you research your potential purchase are cost of payments, cost of insurance and cost of permits.  While the cost of payments has a pretty obvious impact on your budget, many forget to include insurance and required permits in their initial budget or drastically underestimate the cost.  Permits vary in cost, but can be $250-2500 or more, when you include airport and parking permits in addition to state or local business licenses. Insurance can vary greatly, depending on required limits, what carriers you gain access to (via broker or direct) and what programs you can qualify for, based off your experience, vehicle and transportation type.  For example, in California annual For Hire Transportation rates can be anywhere from $3000-15000, per vehicle.  While the $15,000 price tag is not the norm, it’s definitely not uncommon especially for new ventures.  Knowing your potential costs before signing on the dotted line for a vehicle is crucial to proper budgeting and business plan development.

3. Dot the “I”s, Pay the Fees – Applying for Permits and Insurance

After you’ve planned out what and where you’ll provide your service, and which vehicle(s) will be in your fleet, it’s time to submit for permits and sign up for any state required programs.  The permitting process can often take several weeks, and most commercial insurance carriers are unable to write commercial policies until all required permits are at least “pending”.  This means timing is important, and you may need to work on both your permits and insurance quotes/policy at the same time in order to have the least delay in business start-up.  Finding the right broker can greatly reduce the stress and confusion with this process, as a qualified broker will have all the expertise and advice to keep you on the right path, and access to quality programs with lower rates.

Remember, you will not be able to legally operate your business without the proper permits/filings of insurance, so your start up budget must be sufficient to carry you through the initial set up costs and up to sixty (60) days after submitting applications.  You may be responsible for vehicle and/or insurance payments during this time, and chances are you will need to budget for some advertising or marketing of some kind.  Some sites and blogs have helpful tools like this LCT Magazine Limousine Cost Calculator created to help calculate the cost of livery vehicles.

Important Line Items to Budget For:


  • Purchase Amount or Down/Monthly Amount
  • Maintenance Costs including detailing/cleaning of vehicle
  • Estimated Fuel Costs
  • Insurance Costs

Office Location:

  • Lease or Purchase Amount
  • Insurance Costs



  • Annual Cost
  • Required Maintenance/Documentation Costs


  • Website Purchase/Setup
  • Social Media Marketing
  • Other Advertising such as print, local community events, donations, etc.

Educate and Inspire Yourself

Of course once you get your business officially rolling, there are many other factors to consider.   Long term goals are just as important as the start-up ones, so you’ll want to work on those sooner than later.  Here are a few articles we found, which were written to help transportation businesses thrive.

Seven Secrets of Highly Successful Limousine Businesses

Attention to Detail Sets CA Operator Apart

How Much Capital Do you Need?

What I Learned About Running a Business by Driving a Limo


Written by Stephanie Osorio, licensed commercial insurance agent with 12+ years experience working with and insuring For Hire Public Auto insureds.

2 thoughts on “So You Want to Start a Limousine Business….

  1. Val Thorndike

    Consider hiring a consultant. There are consultants who specialize in the limousine business. They can help you identify lucrative markets, set rates, and advertise effectively. Particularly if you are new to the business, a consultant can make you money in the long run, despite the initial cost.

    • Jason Gilbert Post author

      This is a very good point and the CPUC has a list if you’re in CA. Other states may have lists as well.

      We are willing to become affiliated with a reliable company providing this service. Contact us to find out more.

Comments are closed.