Need Advice From Successful Owner/Operators

[-FlyByNight-]

Please, I would really appreciate only receiving replies from successful Owner/Operators who are not only living it, but have been for quite some time. This is a very serious decision for me and I really only want advice from those that can state facts based on first hand experience. Thanks

Let me first state a few facts about myself, so you understand my individual situation. I'm divorced with no car payment, mortgage or child support. I have bills, but nothing major. I have a class A CDL with TX endorsements and have been driving professionally for just over two years. I've done flatbed(Arrow), reefer(Marten) and van(Arrow & Crete). I'm not interested in ever doing flatbed again and won't even consider reefer until they change the HOS to where I feel I can make enough money and still run legal. I'm open minded about tanker. I have been driving for Crete almost eight months now and am very content.

If I'm to become an O/O, I MUST be leased on to a company that allows me to take part in their group medical insurance plan. Primarily for the prescription drug plan. Otherwise it will be cost prohibitive for me to become an O/O. This is NOT optional and if I can't do this, I can't become an O/O. So as you can see, that severely limits my options right out of the gate.

The good news is that Crete offers it's Owner/Operators just that!
They also have a new or used tractor purchase program and two pay scale options for their O/O.

I've talked to all types of O/O over the last few years. Independents with their own authority, those leased to companies, those doing straight leases and even those doing company lease/purchases. Ideally I would love be able to buy a new truck directly from a dealer and be an O/O with my own authority, but based on my previously mentioned needs am not sure it's fiscally possible/realistic.

Based on what I've learned by talking to all those various O/O and given my personal situation, Here's what I'm seriously considering doing.

I'd buy a used Century from Crete and pay it off ASAP while gaining valuable experience as an independent contractor. I would select pay scale option one and try to run primarily trips 1,200 miles and less, which is 81% of Crete's yearly loads. If after I pay the truck off, I still want to be an O/O, I'll trade the truck in on a new International, Kenworth or Peterbilt. The reason I say those three is that I've been told they're about the only trucks that truly hold their value. I like Volvos, but have been told to avoid them like the plague as an O/O due to maintenance issues. Please correct me if I'm wrong.

I know most will say to buy from a dealer, not a company. The reason I'm going with Crete is no down payment, decent interest rate, I somewhat know how the trucks have been maintained and they extend the warranty 200,000 miles. Yes, I know Selectrucks does that too and they're not out of the question entirely, but I don't know the maintenance history on them as well and I'd just prefer buying used from Crete.

I guess what I'm asking you to do is take a look at the links containing all the facts I've supplied and with what I've said I plan to do in mind, pick it apart. :wink:

Well that or tell me I've done my homework and to stop being such a chicken and GO FOR IT!

Thanks in advance.

[mike3fan]

Question
What happens 6 months from now when Crete only has 300 mile loads for you and they take 2 days to load and unload and this happens for 2 months in a row?

I know this doesn't seem realistic to you,you seem to have made up your mind already.

But fleece purcheses are set up to be good for the company and bad for the owner,you have no leverage, you cannot take your(their) truck to a different company when freight falls thru the floor.

It has been said 100 times here and I know you have some special circumstanes,but you need to save up enough money to have a good sizes down payment on a used truck and have atleast $10,000 in reserve for emergency breakdown repairs.

To me and I just came from a container company I don't think Crete pays enough to be an O/O there.

[geomon]

Your revenue should:
1) Cover ALL your expenses.....take a good hard look at all of them.
2) Cover paying yourself (as a MINIMUM) what you currently make as a company driver.
3) Pay a min of 10-12% return on investment (ROI) on the money you are investing in your business.

I'm think'n it will be hard to achieve that on $0.95-$1 per mile.

[allan5oh]

Considering this guy pushes crete, and even has crete in his signature. On top of that, he just sounds like a recruiter.

[-FlyByNight-]

Mike3fan, thanks for the reply. It's an actual outright purchase on my credit with a down payment, not a lease/purchase. I have taken into consideration what you're referring to about slow times and no I have not made up my mind already. Doing my homework first.

Geomon, thanks for the reply. I've done what you suggested and am inclined to agree with you especially if the unforeseen catastrophe were to happen. It could sink me.

Allan5oh, thanks for ignoring my wishes and posting useless drivel on my thread. I'm not a recruiter, just a satisfied Crete driver and like to help others find a decent company where they'll be happy to drive like I am. If all I was interested in was making money off of recruiting drivers for Crete, I'd have my name and truck number in my sig too. Now kindly stay off my thread! :evil:

[GMAN]

97% of your loads will pay from $0.86-1/mile. Deadhead pays $0.67/mile and according to the information provided around 8% if deadhead miles. Fuel costs will run around $0.50/mile based upon current prices. Frankly, I don't see how you can come out on the money. Personally, I could not see myself leasing to any carrier where I would average considerably less $1/mile. I prefer percentage. It is usually more profitable for the owner operator. If I read the information correctly, you will be required to keep the truck leased to Crete or one of their companies until the truck is paid off. That may not be good for the owner operator. While payments are manageable, they are still high for a first truck. I prefer seeing a payment of around $500-800/month. While it sounds good to not have a down payment, you should not go into buying a truck without some money in the bank. All trucks break down. You need to make sure to have some cash in reserve for breakdowns. I would also suggest you get your own financing. That way, you can leave if and when you decide to do so.

[floored]

I agree with Gman, if you are able to, get your own financing. You don't want to be married to any company. When things get really tough (and hopefuly it would never happen to you) you want to have the option to take your truck elsewhere. Its your business, and you need to take the right steps to protect your investment. I will never lease a car, same goes for a truck, its not really yours and by the time it is you've paid far more than if you would have purchased it off the bat. Trucking is my livelyhood and I want to be the one in control over my business.

Lease options are only good for the company you lease from, talk to some of the poor saps at England that bought into leasing a truck, they are hurting bad. High payments and just enough miles to pay the truck bill. Talked with guys at Stevens who lease those shiny black Petes, they too have high payments and many have to take on student drivers just to make ends meet. Maybe your company is different, maybe not. But for me, I would NEVER get into a lease, its bad business. **edit** Look at this topic, a good read about someones experience with a lease at England http://www.classadrivers.com/phpBB2/...ic.php?t=17668

I got the cash I needed to buy my first truck from a 2nd on my morgage. I did this because worst case, my payment would only be $450 a month, so if I didn't work I could come up with at least that and not lose my truck. And, with my change in work (no paychecks for 4 mos) I've had to fall back on that bare min. payment, but once my checks come in again I'll start making those $2000+ payments to get the loan free and clear from my head. I got a very nice fully loaded Peterbilt (2001 387) with 677k miles for 43k, and it made me about 10k a month with easy running. My situation required me to sell it only after 3 months and buy a local runnning truck, but I turned a profit on that rig so I didn't do bad. Good trucks are out there, look in truckpaper.com, shop around a bit. Many dealers will pay to fly you out to the lot and even give you some kickbacks to make the sale (new tires, free warranties, ect).

I'm rambling now I guess.. By no means do I have a ton of experience in this field, but I run my business like a business. And as I said before, a lease option is bad business in my book. Many on here will agree. But, as I say to everyone. Do what YOU feel is right for YOU. You may fail, or you may succeed. Do what you personally are comfortable with. I've always trusted my gut, most the time it works out for me. Best of luck

[-FlyByNight-]

GMAN, Thanks for the reply. Yours is exactly the kind of reply I'm looking for. You are correct on the numbers you posted and yes, I would have to remain with Crete or refinance the truck before I left. Which wouldn't be a problem. I guess I'll just continue as a company driver and save money for now. I'm assuming you do not suggest buying a new truck when just starting out, so what make, model and year of truck do you suggest for the kind of payment you mentioned? I just worry about inheriting someone else's headaches if I buy used.

Floored, thanks for the reply. As I stated in my last post, it's not a lease/purchase. It's an actual purchase with a credit check and a down payment. I do understand where you and the others are coming from though. I doubt I'll buy through a carrier now.

I know my end goal is to become an independent O/O with my own authority. I just don't know how to make that dream a reality from where I currently stand. I'm concerned I'll never be able to become an independent O/O, because I'll always need to have prescription coverage or pay around $1000 per month out of my own pocket. What do you guys do for medical coverage when you have a pre existing condition as an independent O/O? Thanks again for all your insight.

[Ian Williams]

What do you guys do for medical coverage when you have a pre existing condition as an independent O/O? Thanks again for all your insight.

It will be neigh-on-impossible to make more as an O/O that as a company man with Crete if you throw an extra $20k/year into the equation for health insurance and Rx.

[floored]

Didn't see the outright purchase part in your first post, oops.

There are many good trucks than can be had in the 30-40k price range. I see no reason to buy a new rig when you are starting out. Do whatever you can to keep your payments as low as possible, you don't want to hit a bad spell and lose your truck. I think you should run smart and buy something more plain jane that gets good fuel milage vs a flashy chormed out longnose "truckers truck". Get a dyno done on the truck you wish to purchase. If your worried have your own mechanic of choice look it over. Get a warranty (however I always opt out on this and haven't needed to use it). You'll have problems with almost any truck, be it new or used. The dyno and mechanic report will tell you a lot on your purchase. My Pete needed about 3k in repairs over the time I had it, nothing was taken care of by its warranty, thus why I pass on them now. My Freightliner hasn't had a single problem. Thing is, I just deal with it as it comes, part of owning a business, you know?

[-FlyByNight-]

What do you guys do for medical coverage when you have a pre existing condition as an independent O/O? Thanks again for all your insight.

It will be neigh-on-impossible to make more as an O/O that as a company man with Crete if you throw an extra $20k/year into the equation for health insurance and Rx.

Yeah, but as and O/O leased to Crete you are allowed to pay for group health insurance. Single it's $300 or $350 depending on which deductible you choose. I'd go with the $300 plan.

[-FlyByNight-]

Didn't see the outright purchase part in your first post, oops.

There are many good trucks than can be had in the 30-40k price range. I see no reason to buy a new rig when you are starting out. Do whatever you can to keep your payments as low as possible, you don't want to hit a bad spell and lose your truck. I think you should run smart and buy something more plain jane that gets good fuel milage vs a flashy chormed out longnose "truckers truck". Get a dyno done on the truck you wish to purchase. If your worried have your own mechanic of choice look it over. Get a warranty (however I always opt out on this and haven't needed to use it). You'll have problems with almost any truck, be it new or used. The dyno and mechanic report will tell you a lot on your purchase. My Pete needed about 3k in repairs over the time I had it, nothing was taken care of by its warranty, thus why I pass on them now. My Freightliner hasn't had a single problem. Thing is, I just deal with it as it comes, part of owning a business, you know?

Yeah, I'm not your typical trucker and could care less about chrome and long hoods. Actually, I prefer the aerodynamic trucks due to the better fuel mileage. This would be a purely business decision. That's why I was considering a used Century through Crete. It's nothing fancy, costs $35,550 with payments of $1,200 a month and that's if I put nothing down.

[geomon]

FBN...
A question for you on the purchase thru Crete plan....do I understand that if you want out of the Crete lease and find your own financing, you can do it?

Example: you buy a new truck thru Crete (taking advantage of their buying power) and then 8 mos (or some time) down the road you decide to leave Crete for another company or your own authority. Is all you have to do is secure your own financing and "buy" them out? Are there hidden term limits or other clauses that keep you there for a certain time period?

[-FlyByNight-]

FBN...
A question for you on the purchase thru Crete plan....do I understand that if you want out of the Crete lease and find your own financing, you can do it?

Example: you buy a new truck thru Crete (taking advantage of their buying power) and then 8 mos (or some time) down the road you decide to leave Crete for another company or your own authority. Is all you have to do is secure your own financing and "buy" them out? Are there hidden term limits or other clauses that keep you there for a certain time period?

That's an excellent question and one I wasn't completely sure of the answer to myself, so I made a phone call and the answer I got is that there are no clauses, penalties or hidden term limits etc. You can secure your own financing and leave at any time. However, I think you'd be hard pressed to get as good a deal on a new Classic XL or Century at that price and interest rate elsewhere. That's one of the main reasons I was considering buying through Crete.

[GMAN]

GMAN, Thanks for the reply. Yours is exactly the kind of reply I'm looking for. You are correct on the numbers you posted and yes, I would have to remain with Crete or refinance the truck before I left. Which wouldn't be a problem. I guess I'll just continue as a company driver and save money for now. I'm assuming you do not suggest buying a new truck when just starting out, so what make, model and year of truck do you suggest for the kind of payment you mentioned? I just worry about inheriting someone else's headaches if I buy used.

Floored, thanks for the reply. As I stated in my last post, it's not a lease/purchase. It's an actual purchase with a credit check and a down payment. I do understand where you and the others are coming from though. I doubt I'll buy through a carrier now.

I know my end goal is to become an independent O/O with my own authority. I just don't know how to make that dream a reality from where I currently stand. I'm concerned I'll never be able to become an independent O/O, because I'll always need to have prescription coverage or pay around $1000 per month out of my own pocket. What do you guys do for medical coverage when you have a pre existing condition as an independent O/O? Thanks again for all your insight.

I don't think it is a good idea for anyone starting out to buy a new truck. Unless you have enough money to pay cash or have a substantial down payment, you cannot afford to make the payments and earn a decent living. I would not want to see anyone just starting out to put themselves under that much pressure.

I don't concern myself too much with the year model as I do the condition and what has been done on the truck. For instance, it could have had a recent overhaul. That adds value to me, but my not add dollar value to the purchase price. The engine is the most expensive component that you will need to replace. Some trucks I would consider are Intenational, Freightliner, Kenworth (T-600), Volvo. You can probably get into a Freightliner for less than the others, then Volvo, International and KW. I first look for value. Then I look at the brand. A good truck is one that is in good shape you can buy without having to mortgage the farm. You can get a lemon in any truck, new or used. If you properly check out a truck, there is no reason to think that you won't get a good value. Find a mechanic you can trust and either take him with you or take the truck to him to check. Ask for maintenance records, if available, and have a oil analysis and dyno performed on the truck once you find one you want to purchase. A truck is only a tool you use to make a living. Take away all the bells and whistles, chrome, etc., and a new truck will not make any more money for you than a quality used truck. With only a few exceptions, they all have the same engines and transmissions, etc., The main difference you pay is for the skin. I have owned several different brands and I can tell you that there really isn't all that much difference in any of them. I do like the way the International Pro Sleeper is laid out. I like the ride of a Volvo. I liked my Peterbilt, but can't see spending the difference to buy another one over something else. My Kenworth is a good truck. I got a good deal on most of the trucks I have purchased. Getting the deal I wanted is the main reason I bought all of them except the Peterbilt. It had the spec's I needed. I hauled cars at the time and it had a rack already installed. With fuel prices being so high, an aerodynamic truck is probably your better choice. If you find a particular brand that you like, start checking around for good deals. I don't care as much for Freightliner but they have served many fleets well. You can certainly get into one for less than other brands. You want to be comfortable while on the road. You DON'T want to be stressed out making high payments.

As far as insurance is concerned, I would look into some of the associations who offer health insurance. Some may cover pre-existing conditions. Some states may offer health insurance for those who are uninsurable.

[-FlyByNight-]

Thanks again, GMAN. Given my choice, I'd go with a Volvo assuming the maintenance issues really aren't as bad as I've heard. Anyone know if Arrow Truck Sales is worth going through for a Volvo or am I better off buying elsewhere? Not really sure of the exact differences between the six and seven series Volvos other than size. I know the sevens are a step up, but how so and would I be just as happy in a six series as a solo driver? Also, I don't know a lot about the various engines offered for trucks. I've only ever driven Cats and Detriots and haven't had any serious issues with either. Well, I guess the Cat seemed to have better pulling power and less issues. I've heard good things about Cummins and mixed about Volvos. Although I know the Volvo diesels for boats are awesome. I guess it's really personal preference. Like Ford or Chevy. I seem to recall reading on a website that Wyoming does offer something like that! I'll have to do some more investigating on insurance again. Thanks!

[floored]

I was all set to buy a used Volvo from Arrow here in Stockton, CA. When I went in there I told them I did not want anything that was a known repo truck (because we all know if the dude couldn't make his payments he sure as heck wasn't keeping the truck up).. anyway, got the paperwork to get it registered the day before I was to take delivery and sure enough it was a repo truck and worse yet, it was sitting on the lot for 2 years! Ugh, headache waiting to happen I figured so I got my deposit back.

Am I saying they are bad to deal with? Not at all. Just be sure to watch yourself anywhere you go when buying and be sure you are getting the truck you are looking for.

[BanditsCousin]

Mike, I'm a 24 year old o/o and I don't even own a truck. Am I successful, I suppose. I run an operation that avg's well over $3 a mile. Over $5 loaded!! ( I go out of route a LOT for personal reasons, or bobtail to and from my agent wheni get home. Its also my "rental vehicle" on layovers, my DH is well over 10% :wink: )

I couldn't image running for that kind of money, because it wouldn't afford me any fun. The truck costs me at least 70cpm, so If I deadhead 200 miles out of route to vist Teal95KW's gf when he's on the road or to a family member's house :wink: :shock:

...Thats damn near $150 out of pocket. For you, thats like wayy more than 150 miles driven for you. (sure, $150 in revenue, but profit from the 150 miles won't be NEAR $150 dollars).

I do have a point to this, besides I can't manage money and buy dirt bikes when I'm bored on the road

Point 1-
Leasing a truck onto the same carrier you are contracted to isn't always safe. THEY control your miles, remember that. If all dispatchers could give their drivers what they want, they would give them THOSE desired loads. But, they can't. As said above about the 300 mile runs :wink:

Point 2-
Pay scale. As a newbie, its a recipe for disaster. Remember how I said I drive out of route? Well, I get lost too. Every mile I turn getting back on track is at leats 60 cpm, if not the full 70. I was deadheading to Atlantic City and missed the exit and had to pay the toll TWICE to turn around (Delaware water gap??) I'm a magician, I can pee $30!!! Gone in less than 5 min. Rookie mistakes (o/o rookie) or additional costs of business are hard to budget on $1 a mile. I get close to that deadheading to loads :wink:

Point 3- combo of 1&2.... Having someone control your miles, on a low pay scale can bite ya in the ass. BUying your truck through a vendor like Arrow or etc and THEN leasing to a carrier will be advisable. If they don't give ya the miles, they know you can find .10-.15 a more elsehwere (if not, and hopefully more!) Point 3- you need to research some more carriers. Atlas Special Products or even boat hauling are options.

The more niche specific you get, the more $$. I move people's furniture and cars. Thats what I do. Some haul bulls and have to shovel SHIZZABELLE out of their traile.

IN your situation, the "Crete O/O Dream" could work, so I won't down it too much. I could probably make a post with all the benefits of your plan as well if ya want

[BanditsCousin]

I actually just read above and saw the posts about Arrow. The funny thing, is I didn't read those before I mentioned it in above post

SelecTrucks should be like your 4th or 5th choice :wink:

Check out this link:

http://www.truckdiscountmart.com/

You seem like you want this, so between the bunch of us, we'll help ya figure out a gameplan

It's better than the people who start the namecalling and defending carriers o/o pay scales that don't even have a CDL yet (not goonna mention any names lol)

[NascarFan]

Don't go with any body that is only offering a $1.00mi you will lose everything. As far as Arrow stay as far away from them as you can.

For motors I would go with a Cat or Cummins. The difference between the Volvo 760 and 770 is that the 770 has bigger sleeper and is much heavier.