Planning expenses

[Malaki86]

I'm trying to work out the best way to calculate the truck expenses and break it down by the mile and need some advice.

I'm looking at buying an older truck - '02 Volvo with 900k on it. The entire drivetrain has been rebuilt within the past few years (engine, trans & both rears). Of course, hopefully, they'll hold together for a few more years before they need any more major work done.

Because of the age of the truck, I'm allowing 8cpm to go into a repair "fund".

Now, with regular maintenance items, such as tires, brakes and PM's, should I calculate those items separately (create a new maintenance "fund") or figure on paying the regular maintenance out of the repair "fund"?

[GMAN]

Owners calculate their estimated expenditures differently. When most put money into a maintenance account they usually do so for major expenses such as an engine, transmission or rears. I prefer paying for tires, pm's and other expenses out of regular operating costs. I have known of some who put everything into the maintenance account and withdraw money as needed for tires, etc., If you plan on withdrawing money from the account for tires and pm's, etc., I suggest putting more into the account.

[tracer]

I'm trying to work out the best way to calculate the truck expenses and break it down by the mile and need some advice.

The trucking company I'm leased to offers to take money out of the paycheck for the maintenance fund. Then if I use their shop to fix my truck, they first take the money of that fund... But I found it's easier for some reason just to let them bill me for repairs - the do the work and then deduct the expense from my next paycheck. I use my line of credit or VISA for large emergencies ...

[Malaki86]

That's sort of what I was thinking - using the maintenance account for major repairs. Also, if (hoping) I don't use it much, a portion of that account can be used towards financing a newer truck later on.

[floored]

I don't set aside any cpm for repairs, it just works better for me to take as needed from the business account. I have a high limit mastercard to cover anything that I don't have the cash on hand to pay for.

[GMAN]

That's sort of what I was thinking - using the maintenance account for major repairs. Also, if (hoping) I don't use it much, a portion of that account can be used towards financing a newer truck later on.

If you don't need the maintenance account you could use those funds to pay cash for your next truck. I like to pay cash when possible. I knew an owner operator who used this method to buy his trucks. Money that was in his account and wasn't needed for major repairs was used to either pay down the amount he would finance or pay cash for his trucks. It worked very well for him.

[FUEL_MANNN]

I'm trying to work out the best way to calculate the truck expenses and break it down by the mile and need some advice.

I'm looking at buying an older truck - '02 Volvo with 900k on it. The entire drivetrain has been rebuilt within the past few years (engine, trans & both rears). Of course, hopefully, they'll hold together for a few more years before they need any more major work done.

Because of the age of the truck, I'm allowing 8cpm to go into a repair "fund".

Now, with regular maintenance items, such as tires, brakes and PM's, should I calculate those items separately (create a new maintenance "fund") or figure on paying the regular maintenance out of the repair "fund"?

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For those who are still reporting this post..........read it before you click that little "report" button.

Thanks in advance,

~Management.

[solo379]

It doesn't really matter, how you call it, maintenance, business...etc. As long as you have it. Just never forget, that not all of the revenue left after regular(fuel, tolls, ins...) expenses is yours to keep. Part of it still belongs to the truck. Also, i believe, that $0.08 cpm, is kinda on a low side. $0.1-.15, is a safer bet.
Better to have it, and don't need it, than need it, and don't have it. After all, it's still your money.
I hope you have a work for that truck. It's getting offly quiet around...

[Musicman]

I set 25cpm aside in a separate, high interest account. This is for both taxes and very high dollar repairs. I never touch this money unless I have a repair that I do not have money to cover in any other account (which is pretty much just an inframe). Tires, PMs, etc. are all paid out of my general business account. Actual maintenance costs including an inframe should be between 8cpm and 12 cpm for the life of the truck. Taxes generally do not (for us) exceed 10cpm (odometer miles). What this does is give us the money over time to buy our next truck and trailer for cash and we never miss the money we put into that account. It’s an all around good deal... or at least for us it is.

[GMAN]

I met a man once who did what you are doing, Musicman. He puts money into the account and uses it to buy a newer truck. He still uses the funds to take care of any maintenance costs, but uses any excess for the next truck. He will either pay down on the newer truck or pay cash for it.

[rank]

Set aside $15,000 in the first year you own a truck and budget $10,000 every year after that. That first $15,000 needs to be in the bank before you even start up because you might need to replace a cylinder head AND a turbo AND do the bottom end in the first month. Don't ask me how I know.