Tow companies say motor club reimbursements often too low
Good for us, not for them
Between rising gas prices and insurance costs, many tow companies say they can't afford to take service calls from motor clubs like AAA.
While a local tow generally costs between $50 and $75 out of pocket, roadside assistance programs pay contractors far less to pick up stranded motorists. And one of the most popular services for consumers is the least popular among towing firms.
AAA is the lowest-paying club in the region and the nation, according to a survey from industry group towPartners. The AAA base rate for an average five-mile tow is about $28 in the Northeast, the survey said; the highest-paying club was Coach-Net with almost $52.
"As far as I'm concerned, AAA is no good," said John Harrington, a driver with A&D Express Towing in Queensbury.
A&D doesn't accept AAA calls because the rates don't cover the cost to start up his truck, Harrington said. A&D charges $65 for a tow; AAA used to pay the company a base rate of $21.
Two other Queensbury towing companies, Clark's Towing and Northway Towing, also stopped working with AAA and other motor clubs like Allstate and Geico because the overall rates were too low.
Northway Towing owner Philip Kent said he now sticks to dealership warranty work and police calls, which pay more than the clubs.
For Frank's Body Shop in Fort Edward, a AAA contractor, the club rates may be low, but the payments come on time and there is enough work to stay busy.
Owner and driver Charlie Campney said AAA pays him a $27 flat fee, plus mileage. That works for him, so long as the call isn't time-consuming.
Another AAA contractor, Bodies by Jay in South Glens Falls, works with multiple motor clubs.
Trish Cardinale, who handles administrative work the family business, said she hasn't had problems with any of the clubs, but knows that not everyone feels the same way.
"I have heard that a lot of people don't want to tow for AAA because it's low," she said of the rates. "But we do it based on volume."
According to AAA Northway spokesman Eric Stigberg, rates vary by contractor, as all sign independent agreements.
He said the local division has an average response time of 34.5 minutes and a large and growing network of contractors - 87, covering a 10-county area from Albany to Lake Placid, as well as a fleet of nine vehicles in Schenectady and Saratoga counties.
In addition to individual policies, auto brands that rely on AAA for roadside service include Audi, Buick, Chevrolet, GMC, Hummer, Lexus, Oldsmobile, Pontiac, Porsche, Saab, Saturn and Volkswagen.
Stigberg said AAA customers aren't charged out-of-pocket fees and they have access to a range of other products and services. He also noted that some insurance companies increase premiums based on roadside assistance claims.
While most tow companies agree that the roadside assistance services provided by clubs like AAA benefit the customer, they say those lower-paying calls can fall to the wayside during snowstorms.
According to towPartners, its members said they would not accept a call from a motor club they don't already work for unless the basic rate was, on average, more than $46.
Clark's Towing owner Bob Clark said he has picked up many stranded AAA customers during storms who had been waiting for hours because the designated contractor for that area is busy and other companies don't want to take the job.
Tom Brennan, Capital Region vice president for the Empire State Towing & Recovery Association, said he recommends AAA service to his mom, but his tow company in Cohoes can't afford to take AAA calls on a regular basis.
"They do have a good product for the consumer," he said of motor clubs. "But as an owner of a tow company, it is not a very good thing to do."