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Anybody own a tow truck? Does it affect your insurance?

In a not for hire usage with your dealer tag to pick up Towing services or take cars to the auction and to deliver to customers.
Yes, in most states, you can use a dealer tag for not-for-hire transport like picking up auction cars or delivering vehicles to customers, as long as it’s directly related to dealership business. Always check your state’s DMV rules to confirm.