[Rev.Vassago]

Originally Posted by GMAN

Your friend has a lot to consider. If you can get a decent truck for $12-14M that would be a good way to start, rather than having to spend so much on a truck starting out. It is much easier to make money if you don't have big equipment payments.

Once again, I disagree with this notion.

Assuming you ran 10,000 miles per month, an $800 truck payment would eat up $0.08 per mile. If you had a $1700 truck payment, it would be $0.17 per mile. $0.09 per mile SHOULDN'T make or break a company. If the profit margin is that low, then the problem isn't in the truck payment, it is in the revenue stream.

I'm not even going to mention the lower repairs, interest, etc., which will offset that $0.09 per mile quite a bit.

I see people say to buy a "decent" truck, or a "good" truck for a low price. In most cases, that isn't going to happen. Unless you find a moron who doesn't know what his equipment is worth, there is a reason the truck is priced so low. If it were a "decent" truck, or a "good" truck, it would be priced accordingly. Are there deals out there to be made? Sure. But they are few and far between.

[GMAN]

Buying a good used truck has worked well for me a number of times. I know of others who have done very well buying used. A new owner operator has no business obligating himself for a new truck. He can't afford the overhead, unless he has a very large down payment. I have seen a lot of new owner operators get into trouble by over obligating themselves. When you commit to a big payment you are assuming that things will always go as planned and there will be no down time from breakdowns and everything that happens will be covered by warranty. Just because a truck has a warranty doesn't necessarily mean that something will be covered. Down time costs, regardless of whether a truck is new or used. If a truck is thoroughly checked out, there is no reason to expect that it won't perform well. Starting out with a big truck payment is a good way to fail. Where some owner operators get into trouble with these high payments is that when things get slow, they start hauling anything that they can put on the truck to keep moving, regardless of what it pays. They become so stressed that they lose common business sense. They think that if they can just keep moving that they can make it. Next thing you know, they have lost their truck and either filed bankruptcy or ruined their credit. For what? A fancy new truck with all the chrome? They are now bitter, down on the industry and driving a company truck while someone else is making the profit they could have made had they waited until they could actually afford the new truck.