[ratface]

In a few months I will decide wether or not to buy a truck, for starts. Im looking at 05's now. i will be putting 20% down and have a 5yr loan or less. I will be looking to pull dry van. My choice of freight lanes will be between Houston, TX and the NorthEast. I will have 5k after truck purchase as my safety net..
What I need to know our some good carriers to sign on with, such as Land Star and so on.. Also What is a good formula for Fuel Surcharge? And the going rate of the mile? Ive done some math base on 120,000 miles a yr and have broke down mileage pay, to certian areas of operation.. And to be honest Im not sure if it out weighs a company driver. Please give me positive input.. Or negative... just be honest.. Thxs!

[BanditsCousin]

You probably won't get a 5 year loan. Banks and lenders are weary on used truck loans that will make the truck buyer upside down on it well before the payoff. My Dad's bank would only finance me for 3 and 1/2 on a '06 KW at the beginning of '08.

[tweety bird]

IMO, now is NOT the time to buy a truck. I mean, it IS the time to buy a truck as far as getting a good deal on the price of a truck- there are a ton of repos out there pulling the prices down. But it ISN'T the time to get into trucking if you're interested in making money at it.

There are still o/o out there making money- but most of them are using the wisdom they've gained over years of experience. There are plenty of new o/o who lose their shirts when freight is rolling good. You can imagine how many more lose their shirts when freight isn't rolling- like now.

I just can't in good conscience not say something to you about this.

But if you do take the plunge, I wish you BOL.

[GMAN]

Originally Posted by ratface

In a few months I will decide wether or not to buy a truck, for starts. Im looking at 05's now. i will be putting 20% down and have a 5yr loan or less. I will be looking to pull dry van. My choice of freight lanes will be between Houston, TX and the NorthEast. I will have 5k after truck purchase as my safety net..
What I need to know our some good carriers to sign on with, such as Land Star and so on.. Also What is a good formula for Fuel Surcharge? And the going rate of the mile? Ive done some math base on 120,000 miles a yr and have broke down mileage pay, to certian areas of operation.. And to be honest Im not sure if it out weighs a company driver. Please give me positive input.. Or negative... just be honest.. Thxs!

This is not the best time to jump into becoming an owner operator. I am sure that is not what you want to hear, but you did say to be honest. You should be able to get a good deal on a truck and trailer. There are tens of thousands of repos on dealer lots. The problem may come in when you try to make those payments. Freight is sparse and cheap. That means that you will do a lot of sitting and when you do get a load it will likely be for much less than you may want. You have made your calculations based upon running 120,000 miles per year. What if you only run 80,000? What if rates drop to less than $1/mile? What did you use as a base line for your calculations? When doing calculations and projections you need to plan for the worst that could happen.

I am glad to see that you will have some money set aside for an emergency. One thing is certain in this business. If you own or drive a truck it will break down. It doesn't matter whether it is new or old, it will break down. Unless you have the resources to make those repairs you are out of business. We have a lot of people who come to this board and are very enthusiastic about buying a truck and becoming an owner operator. Those of us who have owned trucks try to offer honest advice based upon our experiences.

I prefer owning my own trucks. Some people are better off driving a truck that is owned by someone else. If you do choose to enter this business at this time you need to look at the whole picture.

There are some good carriers. I would look for one that pays percentage. I have always made more on percentage than mileage. Any suggestions as to carriers would need to be made based upon some assumptions about your work experience. I assume that you have at least 1 year of over the road driving experience and a good work history and clean mvr. Most carriers want to see at least 1 year of driving experience. Some want more. If you want to pull a van then Landstar would be a good one to start. They won't hold your hand. Nor do they have dispatchers. CRST has owner operators and vans. Schneider is another carrier who has a lot of vans, but I believe they only pay on mileage. Mason Dixon and some of their sister carriers have vans and pay percentage. They may require more experience than a year. There are about 8 carriers in their group. Jones has some vans as does Perkins. There are a lot of carriers. Most pay mileage. Some people prefer mileage rather than percentage. There are a handful of carriers, such as Landstar, who don't have dispatchers. If you are accustomed to having a dispatcher it may be difficult to make the transition, but many have done so successfully.

Things are very difficult for most of us in the trucking business these days. I would advise you to wait until the economy improves, but that is your decision. If you decide to proceed there are many on this forum who are willing to offer advice.

[allan5oh]

I've heard many business finance(GE capital, etc..) will not give you financing unless you have 2-3 years experience as an o/o.

[Scottt]

Your $5k safety net is more like a piece of string than a net.


Everyweek I put something new on my truck as a preventative maintenance and I thought I was covering most things that would break on my truck.

The last 6 weeks my truck has been a money pit:
Charge air cooler and a air valve $2600
Broken windshield $350
Windshield wiper switch $247
Turbo temp sensor $200
fuel pump $450
New drive tires $4000

I hit a big buck 3 weeks aqo and the estimate was $8300. My deductable was $1,000 and I had them do some touch up while they had the paint mixed. I had a dent in my fuel tank so I had them put a used one on. I ended up paying $1800. Truck was down for 2 weeks so I had no revenue.

Right now I am on a crazy run that paid alot of money so I told them I would do it. Hot load of big tractor tires. 12 tires I picked up in Fullerton California.....First drop in New Orleans on Friday, second drop in Ft Smith Arkansas Saturday, last drop in Des Moines on Monday. Truck started running bad this morning and has no power and I am limping it along because I told them I would get everything delivered on time. I would guess the turbo is about done and they cost ???????

$5,000 isn't enough to have as a security net starting up. $15.000 would be a closer number to cover yourself from the unexpected.

IF I had a truck payment and $5,000 in the bank when I bought my truck I would be done today after only owning a truck for 5 months.

Just some food for thought before you take the plunge.

[GMAN]

Things can break down on a truck without notice. When they do break it can get very expensive. The more you have set aside the better. There are some who get lucky about something major going out on their truck when starting out. It boils down to how lucky do you feel? If nothing breaks then you can do all right. If something does go down on your truck and you don't have the funds to make the repair then you are out of business. Ideally you have enough put aside to do an in-frame. That is the most expensive single repair you will make on most trucks. I would expect to spend from $10-18,000 depending on the brand of engine and what needs to be repaired. A friend of mine recently had his N14 rebuilt at a cost of almost $10,000. I have a CAT that was rebuilt a few years ago at a cost of $18,000. This last year the engine dropped a lifter and cost almost $7,000. Unfortunately, the warranty had just run out from the overhaul. Only a couple of months ago I dropped a transmission in one truck that cost about $8,000 for everything. That includes almost $1,000 for a wrecker to tow the truck 110 miles, motel stay for 1 week, $50/day for my driver, transmission which ran about $3,600 and the rest was labor. I lost a week of revenue while the truck was down in addition to these other costs. Earlier this year I had a turbo go out and the final cost ran about $2,500 or $2,700. That included a turbo $1,500, labor, oil change (recommended to catch any small metal particles from the turbo). That did not include the cost of renting a truck to complete the 2 runs for which I had committed. Truck rental cost about $800 for a week.

I think that I have been very lucky in some respects. I have not had to spend as much as some people on their equipment. It seems that when something does happen that the timing is not very convenient. It takes a while to replace the lost revenue from major repairs and down time.

[GMAN]

Originally Posted by allan5oh

I've heard many business finance(GE capital, etc..) will not give you financing unless you have 2-3 years experience as an o/o.

I believe Navistar (International), GE Capital, Paccar and most other major lenders of class 8 equipment have minimum experience requirements in addition to a good credit score. It is usually difficult to finance your first truck. If you have kept up the payments on a truck then it is usually much easier to finance another later. There are some lenders who may have more liberal policies. For instance, you may find it much easier to secure good financing through your local bank or credit union. Most regular lenders prefer to not loan money on class 8 equipment. I have had a couple of banks that I have done business who financed equipment for me. Neither do loans on class 8 equipment.

[heavyhaulerss]

I.M.O. trucks will get cheaper. but the freight will also get slower. if someone had some money saved & a good source of income now, it would be a good time to look & maybe buy a truck & get it ready to go to work in the spring. things should be better by then. I think this particuliar slowdown will be with us longer than previous times. you have to think about the cost to you even if you sit all week. even at home. ins, e.t.c. has to be paid weather you run or not. a lot of co's have a tag program & a trailer program.

however... if your in 1 or both of them, you'll have deductions out of your pay every week. even if you had no pay that week. right now, even a truck that is paid for can be difficult to maintain. you will still have breakdowns, & other expenses. right now banks are very selective on lending money. if you knew of a shipper or carrier that had some dedicated lanes to start with, that would be a plus. In this current enviroment it is unlikley. when I first started, all my runs were within a 200 mile radius.

this gave me the oppurtunity to get used to everything & get the bugs worked out of my truck. wich lucky for me, was none. but having loads 100 miles out from the house & 100 miles back, if my truck had problems, I perhaps could limp along to get to a local shop. right now... cash is king.

As far as having 5-k after buying your truck... you dont know that. not trying to be condescending, but a personnal expense may arise. there will be a lot of unexpected expenses once you get into trucking. you also could prequalify for a bank loan. that way you would know how much you could actually get. you may find you cannot get a bank loan righht now. patience is the key ingredient here. best of luck.

[ratface]

I do appreciate everyones input. My thoughts our to wait til Feb and see if freight is moving. At this time if I bought a trk and was pulling dry van, and getting 6 mpg. What is the rate? It all will depend on the economy. I can afford a risk its just I dont want to end up side down and throwing monies away, just to say i have independence.