Truck Driving Jobs

hamboner · #21 01-27-2007, 02:46 PM

Quote:

Originally Posted by RostyC

If you had a rgn like this one,
with the full top deck it seems you take advantage of alot of step and flat freight no?

That is the exact trailer my dad is buying, except it is manufactured by XL Specialized I believe. They are heavy, but you can haul lots of equipment on them and still be legal.

RoadstarDallas · #22 01-27-2007, 07:29 PM

Quote:

Originally Posted by hamboner

Quote:

Originally Posted by no_worries

First off, Hamboner, I'll give you the benefit of the doubt and assume that this isn't what you're saying. But it's a point that should be addressed since there's so much misinformation floating around out there.

The idea that buying a new truck for the tax savings is a good one is a complete fallacy. All things being equal, the guy that buys a new truck when his depreciation is up will end up taking home less money than if he'd kept his old one. This is simple math. An O/O doing well will probably be paying, at most, 30-40% in taxes. That means that for every dollar you spend on a truck, you get a tax savings of no more than your tax rate. If you buy a truck for $60,000 and your tax rate is 35%, after 3 years your real tax savings is $21,000. So purchasing the truck ended up costing you $39,000 more than if you just continued to drive your old truck.

I'm not saying that buying a new truck isn't a good idea. Or even buying one every few years isn't a good idea. There are many factors that determine when the right time to buy is and they even vary on an individual basis. However, the idea that you should buy equipment just for the tax benefit is completely wrong. If you find a tax adviser that tells you this it's time to look for someone else.

Without being too technical - the increased upkeep, depreciation factors, and the fact that you are driving an older tractor when you can be in brand new one are just a few of the reasons there is little difference in being paid for. Assuming the average O/O has a note that is gonna be around 60 months to pay off a brand new truck with zero miles ($120,000). When that truck is paid for you will be looking at an over-haul ($15,000) and the fact that your re-sell is gonna be next to nothing.

Yes, I do agree with you that on paper keeping a truck that is paid for is quite enticing numbers wise, but when you get into the rest of the picture there is very lil benefit to being paid for. A guy can run a truck three years, take the best part of his depreciation, and still have good re-sale on his truck. All of this without spending the extra money on overhauls etc. At the very same time you could be trading for a new truck and see very lil difference.

My dad has owned around 15 trucks in his career and has tried both sides of the debate we are having. He is back in a brand new truck after having his last paid off for about 5 years. Somehow, regardless of your calculations he ends up netting about the same money while owning a new truck versus having an older one.

True.....on paper looking strictly at depreciation it does seem like you are better off financialy, but from what I have seen there are no REAL benefits!

Hamboner,

Your theory works well as long as you continue to leave risk out of the calculation. I like my position with a paid off truck and sleep well at night knowing that I can stand a slowdown or change in the freight industry a hell of a lot longer than someone making payments on a new truck. The ability to accept risk is something that varies widely in this and most industries; my observation is that the ones who make the most of good as well as bad situations do so because they avoid debt and risk whenever possible.

Bigmon · #23 01-27-2007, 10:02 PM

Your theory works well as long as you continue to leave risk out of the calculation. I like my position with a paid off truck and sleep well at night knowing that I can stand a slowdown or change in the freight industry a hell of a lot longer than someone making payments on a new truck. The ability to accept risk is something that varies widely in this and most industries; my observation is that the ones who make the most of good as well as bad situations do so because they avoid debt and risk whenever possible.[/quote]

Since you're talking about risk reward I'm gonna jump in here. If there isn't any risk they why bother to have insurance. You're also leaving out opportunity cost and the interest you can earn on the cash. I don't think any of you paid cash for your house, but your probably better of than if you waited to pay all cash for it.

If you have a truck payment and $20,000 in the bank you can withstand a slowdown in freight just as easily as the guy with $0 truck payment and $500 in the bank.

No one is mentioning a collision claim. Let's say your truck gets totaled and the insurance company is jerking you around. If your truck is financed, you have a leinholder on your side to help you fight the insurance company. In the meantime, you have cash on hand to either rent a truck or go to the beach while it's being settled.

BTW...I'm not against owning your truck free and clear if you have money left over. I don't think it's a good idea to pay cash and not have any money left.

rank · #24 01-28-2007, 12:23 AM

I called about a used '53 RGN just like that and asked how much it weighed. He said 17,000lbs...just finished weighing it he said. The weight depends alot on the capacity of the trailer. A little tandem like that might not be too bad. We currently have 53 double drops but they aren't detachable and we lose alot of loads because the frieght can't be driven on.

And speaking of insurance, that's the biggest reason not to finance a truck...so you won't need collision.

Dejanh · #25 01-28-2007, 12:39 AM

Quote:

Originally Posted by Bigmon

Your theory works well as long as you continue to leave risk out of the calculation. I like my position with a paid off truck and sleep well at night knowing that I can stand a slowdown or change in the freight industry a hell of a lot longer than someone making payments on a new truck. The ability to accept risk is something that varies widely in this and most industries; my observation is that the ones who make the most of good as well as bad situations do so because they avoid debt and risk whenever possible.

Since you're talking about risk reward I'm gonna jump in here. If there isn't any risk they why bother to have insurance. You're also leaving out opportunity cost and the interest you can earn on the cash. I don't think any of you paid cash for your house, but your probably better of than if you waited to pay all cash for it.

If you have a truck payment and $20,000 in the bank you can withstand a slowdown in freight just as easily as the guy with $0 truck payment and $500 in the bank.

No one is mentioning a collision claim. Let's say your truck gets totaled and the insurance company is jerking you around. If your truck is financed, you have a leinholder on your side to help you fight the insurance company. In the meantime, you have cash on hand to either rent a truck or go to the beach while it's being settled.

BTW...I'm not against owning your truck free and clear if you have money left over. I don't think it's a good idea to pay cash and not have any money left.[/quote]

Great observation and that was one of the main reasons why i jumped in the new seat instead of the used one.
I can say proudly that after putting 30K as a downpayment and working since July of 06 i made enough to lock my truck up fot at least six months and have enough money to get me through without being really able to feel the sting..yeah i will watch how much is what but I AM able to take on the weight.

hamboner · #26 01-28-2007, 01:16 AM

Quote:

Originally Posted by rank

I called about a used '53 RGN just like that and asked how much it weighed. He said 17,000lbs...just finished weighing it he said. The weight depends alot on the capacity of the trailer. A little tandem like that might not be too bad. We currently have 53 double drops but they aren't detachable and we lose alot of loads because the frieght can't be driven on.

And speaking of insurance, that's the biggest reason not to finance a truck...so you won't need collision.

Thats right..... I believe the one my dad pulls is 35 ton. It is a mechanical RGN. It is a pretty good bit of work to detach, and if you dont have ur fifth wheel set-up to slide past the rear drive axle you might not be able to get under one. Dont even think about getting under one with tall rubber. The process of unhooking, re-hooking, pulling pins, dropping/raising bags, and setting blocks under the deck can be a lot of work if you are gonna load/unload much with one. If I were gonna do a lot of load/unload I would spend the extra money and get a hydraulic detachable.

GMAN · #27 01-28-2007, 01:41 AM

A hydraulic detachable is the best way to go if you plan on getting a double drop.

no_worries · #28 01-28-2007, 02:05 AM

Bigmon,

RoadstarDallas wasn't debating whether to pay cash or finance a truck. We were discussing whether to buy a new truck as soon as the depreciation is used up on the current one or continue to run it.

#29 01-28-2007, 04:19 AM

allan5oh · #30 01-28-2007, 08:55 PM

Trading a truck every 3 years is about the worst thing you can do. You've already taken a HUGE hit on your 3 year old truck, now you're going to trade it for something that is going to depreciate just as much? Keep the truck, pay it off, then you don't have to work as hard. BTW, that engine overhaul is a writeoff in the year that you incurred expense, can you say the same with depreciation?

Coupled those facts with the other fact that new trucks nowadays are getting worst and worse fuel mileage. I don't even want to know what the 2007 compliant "2008" models get.