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Originally Posted by emmgoku
Hello guys! I am an owner operator wannabe after working for past 12 years as a company driver. Not that I disliked my job, but driving my own truck was always my dream. I am a little confused about whether to buy a truck or lease it for now. As I have already said, I want to drive my own truck, so buying is preferred. But I have also thoughts about truck leasing now, getting used to it and then move on and buy one. How is that for a plan? It also helps with the cost for a while at least. Or is that a bad option and should I look to take a truck loan and buy one directly. It would be great if someone who has experience of moving from a company driver to an owner operator could provide me with some advice. |
First and foremost I would say this....if you decide to lease, do it from a 3rd party, not from a trucking company. Not ALL but the vast majority of drivers that do an LP program from the company they are working for fail. If you do a simple search here, you will find a ton of posts on the topic.
The 1st truck I bought was on a lease purchase from a 3rd party (meaning a finance company, not trucking company) with a $1 buy out at the end. I found the truck at a dealership and they found the finance company that offered a lease program. It worked perfectly for me and I eventually paid the truck off and went on to buy another. I have a pretty extensive post on here called "from the High Seas to the Highways" chronicling my adventures from CDL school to getting my 1st truck and whatnot. If you need something to help you fall asleep then check it out.
There are a few "pro's and con's" between financing equipment and leasing as well. With a lease the monthly payments are usually lower and all tax deductible. With some lease programs they offer a "walk away" program that allows you to turn the equipment in without any negative impact on your credit rating. However, be sure to read the FINE print on such a program as they often have other stipulations that may not be so good for you should you turn the equipment in.
With outright financing, the monthly payments are usually a little higher and you can not deduct the payments at tax time. You can however depreciate it up to 3yrs total (all 3yrs at once the first year or 1yr at a time over a 3yr period....your accountant should inform you which avenue is best at tax time).
In either case, before you jump over to being an O/O make sure you have $$ set aside for unexpected expenses. Good Luck!!
Company driver to Owner operator.
