Thinking of taking the plunge...
 

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!

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.

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.

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.

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.

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.

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.

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.

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.

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.

Most McMega carriers all pay van O/O's .85cpm or in that range. And if you can operate a truck on those rates you're a better man than I am. The orange pumpkin has a new system that you can pick your own loads off a website and you can pick where and when you want to go,but I have seen the loads and I think about the best you could do is $1.20 a mile w/deadhead including FSC.

Now if you get into specialized like tankers which I do,then you can do $1.60+ but even at that if there is nothing to haul it does no good. Things are pretty weak right now and from all estimates I have seen don't look for any type of recovery in the next 12 months. Plan ahead save money for a year with the intention of buying a truck when the economy picks up in 2010(hopefully).

Have you ever heard of the Great Depression?

We have entered the Very Great Depression.

I like to think of it as the "Totally Awesome Depression".

Better buckle up.
The ride will be like none you've ever had.

BTW, I didn't coin the phrase.
I copied it.

I googled it, and the first result was a conspiracy theory nutjob left wing website.

I found this definition on line.



Question: What is a Depression?

Answer: A depression is a severe economic downturn that lasts several years. Fortunately, the U.S. economy has not experienced a depression since The Great Depression of 1929, which lasted ten years. The GDP growth rates were of a magnitude not seen since:

1. 1930 -8.6%
2. 1931 -6.4%
3. 1932 -13%
4. 1933 -1.3%.

During the Depression, unemployment was 25% and wages (for those who still had jobs) fell 42%. Total U.S. economic output fell from $103 to $55 billion and world trade plummeted 65% as measured in dollars. The Depression was aggravated by poor monetary policy. Instead of pumping money into the economy, and increasing the money supply, the Fed allowed the money supply to fall 30%. The "New Deal" created many government programs to end the Depression, but government programs alone could not end it. Unemployment remained in the double-digits until 1941, when the U.S. entry into World War II created defense-related jobs.
We probably won't see a depression like that again, simply because the government has learned how to avoid it. Many laws and government agencies were put in place because of The Great Depression with the express purpose of preventing that type of cataclysmic economic pain.



We don't really know whether we will have a depression like the one in 1929 or not. It is too early to know. One thing is for sure and that is that there are a lot of similarities between those times and today. The depression of 1929 was proceeded by what was termed the "Roaring 20's." The government cannot fix this problem. Much of what is happening is the result of failed government policy. It didn't work in 1929 and it won't work today. Obama and Biden are already getting ready for a massive WPA or WPO program to create government jobs. This is the same type of jobs program developed during the 1929 depression.

I wonder if they'll call it the "New New Deal".


Seriously, the New Deal was a dismal way of trying to fix the Depression. FDR simply threw a bunch of stuff at the wall, and figured out what stuck. Most didn't. The courts threw a lot of his programs out as unconstitutional. I certainly hope Obama doesn't follow suit.

I certainly don't think investing in our infrastructure is a bad idea. Building/rebuilding roads and schools is a good way to put alot of people to work. How to pay for it is what bothers me,I'm all for cutting out other government programs and redirecting those funds into the "new deal" programs would get my support but unfortunetly we all know that isn't gonna happen.

I'm curious - what government programs would you support cutting out?

At its heyday of the New Deal, the government was spending upwards of 140% of the GDP per year. Based upon the 2006 GDP ($13.13 trillion), that would be a government budget of $18.382 trillion. Considering the FY2008 budget was $3.1 trillion, spending our way out of this doesn't seem very fiscally responsible.

if u do buy a truck, schneider has a good program where u are paid a percentage of the load< i dont know where some of the guys on here are saying the best u can average is 1.20, but with proper experience you can by far do alot better than that here!!!

What would be one of the main materials used in infrastructure developement/maintenence? Concrete.

What substance is widely used in concrete? Fly Ash.

Where does fly ash come from? Coal combustion. (coal-fired power plants, etc.)

What industry does Obama proudly admit he intends to bankrupt by imposing crippling regs? Coal.

Guess we'll buy the ingredients for concrete from overseas.

I'm guessing most of the UMW union voted for him anyway.

Around June or July I think it was, I got a trailer through GE capital with only about 1 year in business. However recently just bought another trailer and they denied me along with most others. Lending has seemed to come to a stop.

I did end up getting a loan through Pinnacle, but the guy at Wabash said I was very lucky and the only reason I got a loan was due to good personal credit.

I got the truck with my local bank. (Suntrust) (My third with them). It was pretty easy too, but they said it will start to get harder. Best bet right now would be to go with your local bank.

Was that you that changed my title?
You have me at a disadvantage.
Please change it back.

You have attained the position of a leader.
Will you rise to the occasion?

Time will tell whether you grow into the job, or suffer the Peter Principle.

Nope. I changed your title quite a while prior to that.

But since you want to complain about the title you've been given, I will change it to nothing at all.

Government regulations are a primary reason so many of our industries have moved facilities over seas. This guy doesn't seem to have a clue. The next 4 years should prove to be very interesting. When I first heard him state this about the coal industry I couldn't believe my ears. A presidential candidate actually boasting that he plans on killing one of our primary industries. Hundreds of thousands of workers will be put out of work. If he is successful it will cost us billions in additional costs for our infrastructure, not to mention the extra cost of electricity. This is just what we need, greater unemployment. It is statements such as this that I could not understand why people would so blindly vote for him.

One of the banks that I do business is Suntrust. I just found out that they are planning on charging non customers a fee for cashing a check drawn on their bank after the first of the year. They have also just started charging me an analysis charge on my corporate checking account. Although they have told me otherwise, I think that they are either having financial difficulty or getting ready to be bought out. I knew when Wachovia started to charge for cashing checks that they were in trouble.

Suntrust told me a few months ago that they were going to tighten up credit policies but were going to continue lending money. It has always been a fairly conservative bank. They also told me that they were in better shape than many other banks due to lending money on deposits rather than borrowing from the Fed.

Mike,

FWIW, I'm pretty sure I heard that Suntrust did indeed receive some bailout money. I think you posted here some time ago that they told you they didn't, they were OK without it. But I'm pretty sure they did.

Edit- Here is a link:

http://www.naplesnews.com/news/2008/...bailout-funds/

And yet another seeking more funds:

http://www.ajc.com/metro/content/bus...k_bailout.html

Suntrust did indeed get some of the bailout money. However I don't think that should indicate their status. I heard the CEO of Chase the other day in an interview and someone made the comment that there were many banks that were asked to take the money that didn't need it. I guess this was done so as not to single out just the bad ones (and the stygma that would go with it.)

I don't know how good Suntrust is. You know these companies swear up and down that they are stable and next day they are bankrupt. It seems like everything we are told is one big lie anyway.


Personally I have been with Suntrust for years and am happy with them. Jim Cramer was railing about them the other day (Sell Sell Sell!) but who knows.

There were rumours many months ago that Chase was going to buy them but I'm sure that is off the table now.

Thanks for the link. When I spoke with my local branch they told me that they were stable and loaned money on deposits rather than borrowing from the Federal Reserve in order to make loans. I wasn't too sure about it at the time but went along with it. With the new fees they are charging, I think they may be in trouble or perhaps getting ready to sell out. They could be attempting to get profits up to sell at a higher price. Suntrust has gone through several ownership and/or name changes over the years.

Credit unions are the safer bet.