August 31th, 2009
I crossed into Canada via Sarnia, ON without any problems and spent the night in a shopping mall parking lot in Kitchener, ON. There were cars coming and going till late in the night from the nearby movie theater (where I watched the new installment of "Final Destination" in 3D) and I was worried someone might steal my tarps
Nothing happened and in the morning I drove to Trailers Canada in Breslau where I met my sales guy, Bruce. A big tow truck arrived around 9 am and he took off the stepdecks off my flatbed one by one with its crane. I was shooting the action with my Flip and will post a video on YouTube in a couple of days, once I pick up the step with my truck.
We did the rest of the paperwork after and I signed my life away on a 60 month capital lease with GE Canada, with $1 buyback. After the 2 grand we added for accessories (I got it as cashback at signing to spend on things like tarps, load levelers, chains, straps and such), the price in Canadian Dollars came up to $40,406 (the actual price was $38.4K). I put $1,900 down.
The interest is pretty high (about 10%, I think) and my payments are going to be $873.74 a month, starting on October 16th (I asked them to give me a 45 day delay for the first payment). $41.61 in the payment is GST ('goods and sales tax') and I'll get a refund for it from the Government. So, the final out-of-the-pocket payment for the trailer will be Cnd$832.13/mo.
In terms of cashflow, nothing should change: I rented out my condo apartment for $800, which pretty much covers the trailer payment. I can't refinance the trailer because it's a lease, but I'll try to do something about my $1,600/mo truck payment. The 2004 truck is probably worth $32 - $35 grand on the street, and I owe only $23,000 to GE Canada for it. If I do nothing, the truck will be paid off in December 2010.
I'm looking forward to getting 82% percentage pay from now on, and with capital cost allowance for the trailer (30% a year), my profit per mile should improve.
I left the trailer at the dealer to let them plate it, re-paint a spot on the landing gear where the paint disappeared (the trailer rubbed against another, as they were being driven from Moberly, MO to Sioux City, Iowa), and replace the mud-flaps with the new Eco-Flaps I bought at a TA truck stop in Gary, IN on the way back. I'm using Eco-Flaps on the truck now and I like them, so I decided to make all flaps the same. The dealer said they should be done with the trailer tomorrow (Tuesday) at noon.
The license plate is going to be in my name, but the insurance will be provided through MacKinnon. I was surprised to learn that trailer licenses in Canada are given only once and that you don't have to buy any annual stickers (as we do for cars).
I called AeroKit, the company in Burlington, ON that sells load levelers and they said I can pick it up tomorrow, around 4 pm. I'll also buy the rest of the stuff I need for the trailer (chains, binders etc.) and I told Dispatch I should be ready for my first load Wednesday morning.
The trailer looks very well made, except for one tiny thing: the sliding winches are designed in such a way that they constantly scratch the aluminum on the trailer side. I checked both trailers (mine and the other one I brought over) and even though they are like one week old they already have nasty markings where the winches slided .. I asked Bruce the sales guy if I should put any grease in there and he said it was a bad idea.
Another thing that I'm not happy with is the straps. I bought 4" straps with flat hooks because they were on sale at Tarp Stop. These will fit the 4" winches, no problem there ... However the stake pockets will be too small for hooks to go through and I'll have to hook the straps to the rail under the side, which can withstand something like 5100 lbs. Stake pockets are rated for close to 6,000 lbs
and Bruce said it's best to use stake pockets for securing loads.
Unless, and I'm thinking it might work, I'll unroll the strap, thread it through the stake pocket first and then hook the hook to the bottom of the stake pocket. I'll do a field experiment tomorrow once I have the trailer with me back at the MacKinnon yard.
All in all, I feel excited to become a 'truck and trailer' owner-operator, which is in full accordance with Rule #7 of the "Rich man in Babylon": INCREASE YOUR ABILITY TO EARN. Getting the trailer seemed like the easiest thing to do this - I'm going from $1.12/mi to 82% of the freight price.
I"m hiding my only credit card and switching to cash from now on. I'll split each paycheque like this:
10% - Savings account (for future invesments into trucking and real estate). This is where the money will come from if I decide to replace my stock exhaust manifold with an extrude-honed one. This costs about $1,200 and should improve my fuel mileage by .2 mpg. I"m also planning to buy a cheap 3-plex or 4-plex later on (owner-occupied), if I can find a deal with $0 down (read: "motivated seller").
20% - VISA (to pay off the existing balance). I"m not going to use the credit card until it's fully paid off. This is doable because I'm single, have no kids, and I don't smoke
70% - for bills and daily living. As the Rich Man from Babylon says, "Budget your expenses so that you may have coins to pay for your necessities, to pay for your enjoyments and to gratify your worthwhile desires without spending more than nine tenths of your earnings." Nine tenths is 90% (because you're supposed to save 'one tenth' or 10%) but when you have debt, they recommend you use 20% of your income to pay it off.
