Expand Your Towing Equipment Inventory Before Year-End

As we approach the final quarter of the year, towing and recovery companies face a critical decision: whether to delay equipment purchases until next year or to move now. At Collins Manufacturing, we believe there is a compelling case — both operationally and financially — for expanding your towing equipment inventory before year-end. When framed properly, such investments can serve not only to strengthen your fleet and service capacity but also to help manage your company’s taxable income and preserve cash flow.

Have You Examined Your Inventory Lately?

First and foremost, investing in additional towing equipment ahead of the year-end translates into immediate readiness. Whether that means acquiring extra dollies, winches, carriers, or specialized hook-lift units, a robust inventory enables your dispatch operations to respond more rapidly, offer more capacity to clients, and reduce the risk of downtime when a unit is out for maintenance. That operational readiness, in turn, supports revenue growth. But equally important is the tax benefit. Under the U.S. tax code, business-use equipment that is purchased and placed into service in the tax year qualifies for accelerated expense treatment, allowing you to deduct a larger portion — or potentially the entire cost — in the same year you buy it. Of course, always consult with your CPA or tax professional for tax advice, but this article may provide you with questions to ask them about your company’s situation.

By expanding your towing equipment inventory now, your company could generate a substantial deduction for the current year. This lowers taxable income, meaning less tax paid today and more cash retained for operations, marketing, or further growth. In the towing business, where margins can be squeezed and equipment utilization is critical, that retained cash becomes a strategic asset. Moreover, if you expect a higher income year — perhaps due to increased call volume, contract work, or fleet growth — taking the deduction now allows you to smooth or reduce your tax burden accordingly.

It’s Not Just About Taxes

Beyond tax strategy, this timing supports your business operations. With additional equipment in inventory and available, you can bid on more jobs, serve more customers, and avoid losing work because you lack capacity. The incremental revenue potential increases, but because the equipment cost is largely written off (or greatly accelerated) this year, the net cost after tax is significantly lower. In effect, you’re buying growth while simultaneously buying a tax hedge.

Of course, many caveats apply, and this is where your tax professional should provide you with guidance. In general, the equipment must be put into service during the tax year; simply ordering before December 31 is not enough if it sits idle until next year. As tax advisors emphasize, purchasing and making operational use of the asset are both required to qualify for the accelerated deduction. Also, the deduction cannot exceed your business taxable income under Section 179 in a given year. And while bonus depreciation offers a broader write-off scope, it too has specific rules and should be reviewed with a qualified professional.

From a practical standpoint, here’s how towing companies should think about the timing: Evaluate your projected income for the year, consider the tax liability you expect, and identify equipment needs you have for growth or fleet renewal. If the cash flow allows, place orders so that delivery, installation (if applicable), and operational readiness are completed by year-end. Work with your vendor — such as Collins Manufacturing — to ensure equipment is delivered, inspected, and documented as placed in service. Then coordinate with your accountant to complete the necessary forms (such as IRS Form 4562) with your tax return.

Another advantage: by purchasing now, you lock in vendor pricing and delivery slots before the year-end rush. Equipment lead times are increasing in many industries, and by acting now, you may avoid longer delays or price increases. Meanwhile, you’re clearly signaling to your stakeholders (customers, lenders, insurance) that you are investing in growth and reliability. That enhanced confidence can translate into better contracts or more favorable terms.

Expand Your Towing Equipment Inventory with Collins

For towing companies seeking to enhance their bottom line, expanding your towing equipment inventory before the end of the year presents a doubly beneficial path: operational readiness and tax-efficient investment. At Collins Manufacturing, we specialize in designing and delivering top-quality tow-truck accessories, dollies, and recovery gear tailored for the towing industry’s demands. Partnering with us means you’re not simply buying gear — you’re making a strategic investment in your fleet and your tax position.

We encourage all fleet and towing operators to review their equipment needs now, speak with their tax advisor about acceleration opportunities such as Section 179 and bonus depreciation, and take action before the calendar year ends. The year-end timing matters. Equip your business for the workloads ahead, take advantage of the tax rules while they’re favorable, and position your company for both growth and profitability. When you act now on expanding your inventory of towing equipment, you’re doing more than buying gear — you’re investing in your company’s future.