A few questions about buying a truck...

[Aviator]

Hello, I have the chance to buy a truck from a dealer I know for a very very good price. I currently drive locally. But I'm thinking about getting back into over the road. What things do I need to have checked on the truck? I read somewhere a while back that an oil analysis is a must. This truck is a 00 Freightliner with 650k miles, has a N14 Cummins 3.70 Rear Ratio,and 10 Speed. Another question I have is the truck too old to get on board with most companies? I'm not set in stone on doing anything yet. Just wanted to get some opinions. Thanks for any info in advance.

[GMAN]

Some carriers have age restrictions. It is usually those with low mileage pay. Unless you have over the road experience you may find that it will be difficult to lease to a carrier. You may want to have a dyno done on the truck. Between the dyno and oil analysis you should be able to get a good picture of the truck's condition. One other thing that can be checked is the truck's computer. There are other things that can be checked. It might be of benefit for you to pay a mechanic to check it out for you unless you are mechanically inclined. King pins, fifth wheel, suspension, drive train are some things to check. If the service records are available it would be a good idea to take a look at them. Unless you have a good cash reserve this may not be the best time to venture out into becoming an owner operator.

[Aviator]

Thanks GMAN. I have six years of driving experience, 1.5 years over the road. One year hauling cars, and the other .5 running dry van. I'm hoping soon that I will have enough money to buy the truck cash, and have about $5k in savings after. I'm hoping that's enough to run. What do you think? Is it better to buy a good used truck full out, or get a new one with a good down, but still owe a lot on it and have payments? I'd love to have a warranty that's for sure. but to have it paid off, sure seems a lot better to me. Still waiting for a few things to happen to make this work.

[GMAN]

If you plan on leasing to a carrier and the truck is in good condition, $5,000 should get you started as long as you don't have a major breakdown. I prefer to have enough in the bank to do an in-frame to be on the safe side. A friend of mine recently spend almost $10,000 to rebuild an N14. Some rebuilds can cost upwards of $18,000. Cummins is probably the least expensive of the three major engine brands to rebuild. This same owner had to replace the computer in his truck a couple of days ago. It cost him $3,000. Last year I believe he had to replace an injector. I don't recall what it cost but the injector alone should have run over $400. I would think with labor it should have run somewhere between $800-1,200. The thing is that you never know when something will go out on a truck. Just over a year ago I had a turbo go out on one of my trucks. With labor and parts the bill came to over $2,500. In October I replaced a transmission on a truck. The wrecker bill came to almost $1,000 to tow it 110 miles. By the time I paid for everything I spend about $8,100. Part of that money was to pay my driver to sit for a week waiting on parts and for his motel room. The International dealer in Albuquerque did the work. They told me that they would take my credit card. When it came time to pay I had to send the cash. At that point they told me that they didn't take credit cards unless you were there in person. Had they informed me in advance I could have made arrangements to have their money available. In any case I would have been stuck if I hadn't been able to pay for those repairs. About a year and a half ago I put a clutch in that same truck. It cost about $1,800. The reason I mention some of these costs is so that you know what can and does happen. You either have the money or credit to make those repairs or you are out of business.

One great thing you are planning on doing is to pay cash for your truck. As long as you check it out thoroughly and everything seems to be in good shape you should be all right until you can save more money. I would recommend that you put aside at least $15-20,000 as quickly as you can. By doing that you will be prepared for almost any expense. It can take a big burden off your shoulders when you don't have to worry about payments. If you don't use the maintenance money you can use it to pay cash for your next truck. You will always have tires blow, wheel seals to replace or other minor repairs. I suggest putting enough money equivalent to a truck payment away until you have the maintenance account built up to at least $15,000. In fact, you could continue contributing to the account from now on. It would be a good retirement account if you don't need the money.

I prefer buying a less expensive truck that is in good shape rather than having big payments. There are some who prefer the big payments to have a newer truck. One reason most give is the warranty. I can tell you from personal experience that a warranty does not necessarily cover your truck. I have had several experiences where something was not covered under warranty. Fortunately, I was in the position to pay for the needed repairs. Whether you have a new or used truck you may still be down for a few days and that is lost income you will never be able to cover. Whether repairs are covered or not you could still have a wrecker bill. That is a cost you will usually need to pay yourself. Some warranty repairs may need to be paid when made and then you may need to get your money back from the dealer where you bought the truck. Starting out the good used truck is the sound way to go. Even with no payments you may not make much money right now. Most owner operators are suffering from cheap rates and sparse freight. You will be in a much better position when you don't have to worry about payments. You can afford to sit for a better paying load.

[Aviator]

Ok, thanks for the great advice GMAN. Makes perfect sense. I'm still mulling around the idea. I might work for my current company for another six months just to hopefully ride this economy downturn out. I hope it will pick up by then. I'm reading some trucking co's letting go of guys. Something I never thought I'd see in the last ten years. I'll be sure to report back here when I decide. Again, thanks for the advice.

[GMAN]

That makes good sense to hold off for a while. When you own trucks your overhead goes on whether the truck moves or not, even with no payments. By holding off you may run across a really good buy. When I am looking for a truck it usually takes me a while before I actually sit down and write a check. I have certain things that I look for and am open to buying a different brand than what I currently own. By not holding out for a particular brand I have more options.

There are some companies who are laying off drivers and owner operators. Circuit City is closing their doors. They employ over 30,000 people, I believe. There are many other companies who are also in trouble. People are not spending as much money as they were due to fear of what is happening in the economy. That is bad for some and presents opportunity for others. If you have plenty of cash it can be a good thing. During the last depression there were those who started great fortunes by buying for pennies on the dollar. That will likely happen now as well.