[RootHB]

Originally Posted by GMAN

How much money have you saved to buy and run a truck?

There is a 100K primary resource with additional inputs available.

Originally Posted by GMAN

Have you kept a log of maintenance costs on the truck you are currently driving? What about fuel, tires, etc.,

Much has been 'logged', more is still raw data that needs to be coagulated for proper analysis.

Originally Posted by GMAN

How is your credit? Have you tried to secure a loan from a commercial lender or your bank?

Credit is good although it's consumer in type. Truck purchase will be cash, with sufficient resources to acquire an APU as soon as possible. To the extent possible I would like to avoid the need for credit, however your advice is well taken. The credit issue will be researched.

Originally Posted by GMAN

Why do you want to become an owner operator rather than remaining a company driver? These are some of the questions that you need to answer for yourself before moving forward.

You are absolutely correct. The conditions, policies and equipment being placed on current and future company drivers is becoming increasingly and unsoundly restrictive, owing to the economy and the anthropology of the current and future driver pool.... I do not question why a fleet is having to cater to the lowest common denominators. It has come to the point that I have more 'management' options available to me as a L/O with a better chance at success.

Originally Posted by GMAN

When the truck is in the shop you are also not making money. - You need to save your money for a good down payment or just pay cash.

The truck now targeted is an 07 9200i, assigned to me when new and treated well. At 644K miles it still has 50% of the clutch remaining.. There is an opportunity to have it at wholesale from the fleet, but even the dealership taking these units in on trade is overloaded with these trucks. A cash transaction is all I'd consider, it is indeed a risk to employ credit in this business right now..

Originally Posted by GMAN

When you buy a truck you go from being a company driver to company owner. It is a different mindset for those who are successful.

Absolutely. I was in a family business for the 24 years prior to getting a CDL. The jump in the mindset is not so difficult, and has served me well even as a company driver... they have also noted the difference.
Many thanks for your wisdom. I have followed your posts since I found CAD some 5 yrs ago.

[ground_pounder]

some companies won't even let you think about buying the truck out from em unless you complete the lease deal wich to me is another setup for failure as the co has the controll over your miles. more and more drivers are just staying company drivers these days as most don't want the headaches of owning a truck. it's always more fun to burn the bosses fuel and if it breakes down send a msg or call and tell em to fix it. i don't know how everyone one else thinks about this do you have a atleast 30k put aside for a saftey blanket for break downs and fuel among living expences till you start getting paid and making revenue. and if your gonna be running for a broker not all of em pay right away some take upto 30 days to pay out providing the broker is decent then you have some brokers that will just screw you over. it's not cheap owning a large car.

[GMAN]

Originally Posted by RootHB

There is a 100K primary resource with additional inputs available.

Does this mean that you have $100,000 saved that you can use to start your business?

Originally Posted by RootHB

Credit is good although it's consumer in type. Truck purchase will be cash, with sufficient resources to acquire an APU as soon as possible. To the extent possible I would like to avoid the need for credit, however your advice is well taken. The credit issue will be researched.

Having good credit is critical to financing a truck. It can be difficult to finance your first truck, even with good credit. If you have the funds to pay cash, then I would not worry about credit or financing your purchase. Any money you spend for interest is money you could keep for profit or buying other things, such as your own trailer.

Originally Posted by RootHB

You are absolutely correct. The conditions, policies and equipment being placed on current and future company drivers is becoming increasingly and unsoundly restrictive, owing to the economy and the anthropology of the current and future driver pool.... I do not question why a fleet is having to cater to the lowest common denominators. It has come to the point that I have more 'management' options available to me as a L/O with a better chance at success.

I don't know what management options would be available to you as a lease operator that would not be available as a company driver.

Originally Posted by RootHB

The truck now targeted is an 07 9200i, assigned to me when new and treated well. At 644K miles it still has 50% of the clutch remaining.. There is an opportunity to have it at wholesale from the fleet, but even the dealership taking these units in on trade is overloaded with these trucks. A cash transaction is all I'd consider, it is indeed a risk to employ credit in this business right now..

Having personal knowledge of your equipment can certainly be an asset. I don't understand why you would consider becoming a lease operator if you can buy the truck you are currently driving for wholesale. You will save thousands of dollars to just buy the truck rather than leasing one from your company, especially if you have the resources to pay cash.

Originally Posted by RootHB

Absolutely. I was in a family business for the 24 years prior to getting a CDL. The jump in the mindset is not so difficult, and has served me well even as a company driver... they have also noted the difference.

Growing up and working in a family business can be helpful when thinking about starting your own company. I grew up in family businesses myself. Both parents and both sets of grandparents were business owners. But, if they have not been in the trucking business, you can expect some differences. We are among the most regulated industries in this nation. Few industries have so many regulations. If I had the funds to buy a truck there is no way that I would even consider doing a lease purchase. You will spend much more to do the lease purchase than if you buy a truck on your own. You are talking about doing a lease purchase and then discuss buying for cash. You need to decide which way you want to go.

Originally Posted by RootHB

Many thanks for your wisdom. I have followed your posts since I found CAD some 5 yrs ago.

I am glad that I could be of help you you. Wisdom comes from making mistakes and hopefully learning something along the way. It is good that you are still with us.

[no_worries]

He's not talking about doing a lease purchase. He's buying a truck and leasing onto his current carrier.

Root, don't let it be overly complicated. This is a simple business, especially for a contractor. The numbers in a lease situation should all be pretty straightforward. They get a little more complicated if it's a percentage lease, as opposed to mileage; but that just means you have to do a little more homework regarding the rates. You've been with the company for a substantial period of time, including one of the worst periods the industry has experienced, so you have a great idea about what the company has to offer in terms of freight volumes, lanes, etc. Your truck won't cost you much and you have the best possible data on its maintenance and performance history. You're well-capitalized so the things that cause big problems for most new O/O's won't be an issue. In the end, all it comes down do for your particular situation is what can you net? With your experience with the company you should be able to gauge your revenue within 5% and your expenses boil down to fuel, maintenance, and insurance all of which are easy for you to calculate or account for. A simple pro forma will tell you whether the deal works for you. Anything else is just muddying the waters at this point. You seem like a smart guy, don't get too caught up in trying to find every possible resource. The business really is as simple as it seems.

[GMAN]

Originally Posted by no_worries

He's not talking about doing a lease purchase. He's buying a truck and leasing onto his current carrier.

I can see that, now. I thought from an earlier post that he wanted to do a lease purchase.

[ground_pounder]

i would still buy the truck from a third party vendor though. if things slow down or they cut his miles back to where he can't make the payments he can take his shiny toys and move on he's not married to that carrier!! is it a walk away lease purchase? can he buy the truck outright before the lease is up?

[ground_pounder]

Lease purchase is not the way to get into trucking | OOIDA Weekly Blog

i found this post on ooidas website about leasing a truck. another thing to consider is if that trucks making them all that money then why are they leasing it out?

[GMAN]

There are some benefits for a carrier to lease trucks to their drivers. It puts maintenance costs on the back of the driver. Most will take better care of something when they foot the bill. Once the carrier leases the truck to a driver then they become an independent contractor and must be responsible for all of their own benefits and taxes. Since the carrier controls the money they will get their money before the driver receives any money. The driver or lease operator is responsible for not only the lease payment, but all insurance and costs associated with running the truck. Unless the driver totally trashes the truck, it could be a positive for the carrier. Most lease operators will not stick around long enough to complete their lease. I would expect that they might stay around longer when their is the possibility that they could actually own their truck at some point.

Properly structured, leasing trucks to drivers can be a good profit center for the carrier.

[RootHB]

Originally Posted by ground_pounder

i would still buy the truck from a third party vendor though. if things slow down or they cut his miles back to where he can't make the payments he can take his shiny toys and move on he's not married to that carrier!!

At this point in time it's going to be a third party vendor - I've been warned not to buy my 07 9200i due to (unspecified) problems with the CAT C-13.. Anybody with any info on C-13 probs?? At 657k miles, mine has done one heckuva job. That said, I have determined that I need a double-bunk in the sleeper and at least a 13spd tranny, with a CAT C-15 400lbs heavier than the C-13...

..is it a walk away lease purchase? can he buy the truck outright before the lease is up?

In my case, here, words may have gotten in the way but - it was a matter of purchasing outright my company truck directly from the company, cash, at wholesale cost. Then, they have a lease program available to O/O's, where I'd lease back to them as an O/O. That part is still in the works.. But I'm looking elsewhere for the truck that fits my needs. In the meantime it looks like I'll be cycled into one of their new ProStars soon, staying on as company driver while I research the transition to O/O. As bad as the ProStars are, I'm not jumping off into anything until I get the act together.

[classictruckman]

What's so bad about the Prostar?