Need your Honest Opinion
 

Hey fellow Driver's I'm currently in the process of putting a business plan together to become an owner operator. I'm looking for Suggestion's on weather to buy a used truck or a new truck. Now the run I will be doing is dedicated Form Ontario to Quebec averaging 830km round trip on average 20 trips per month. The rate of pay is per ton and i will be pulling a company trailer. This will be my first truck i do have the downpayment available. I currently do this run as a company driver and have made between 70k and 75k the past 2 years. The problem I have is the trucks the company supplies are light spec international pro star's with maxforce engine's. The company has agreed to bring me on if I can get my own running authority. I feel i can gain more out of being an O/O I do take pride in what i do. What are your suggestion's ladies and gentlemen. I'm currently looking at a 2015 Kenworth W900B with the Paccar MX 500hp.

Thanks
Ryan

We're missing part of the story here. Do you not have the option to stay as a company driver?

I bought a brand new 2009 truck in fall of 2008 and seriously regret it. But living in Winnipeg, I wasn't making 70K as a company driver. Had I been, I definitely would have stayed company.

The new truck emissions can be a nightmare!!! If things start going wrong, you can spend more money doing emission repairs than you used to spend rebuilding an entire engine on the pre-emission trucks.

I don't want to give advise; just hoping you know what you're getting into before you jump in.

$70k as a company driver? With bennies?

Why would you take the risk?


If you do, #1 rule of small business, keep your overhead as small as possible. You can't do that with a new truck payment compared to a used truck. There are trade offs, but it's worth it. IMO

Yes 70k as a company driver plus benefits and pension plan. Is it even worth the risk with the money i'm making as a company driver?

Thanks

I regret that I bought new, but you don't want someone else's headache either, tough decision.

Fuel is your number 1 expense. Do you realize a T680 would get about 1 mpg better than a 900? That's a lot of money.

Do you have XM or Sirius? Listen to Kevin Rutherford, midnight-1am nights, 4-7pm weekends channel 128. He might change your mind about buying new, or even buying at all!

i think the only way i'd buy new is a glider. i hope to get one in 2 years when mine is paid off.

Keep the ideas coming guys i need all the input i can get! It's a tough decesion.

You've got a pretty good advises here, but.... To fully access the situation, we need more numbers... Like a projected gross revenue to the truck, for example....

My projected gross revenue will be $224,640 not including FSC

OK! Let me get it straight;-20 trips per month, roughly 500 miles round, all in all comes to a bit under $2 a mile + FSC. Not too bad for power only, still not great considering weight you gonna pull.What are the other costs from you involved? Are you sure it's worth it? Considering your curent wages and bennies?
Are gliders OK in Canada?

Well worth it, got a western star glider last year and is working out great

He's using Canadian funds and distance. Need to convert that to us dollars and miles.

Works out to like 120k miles and the funds about $198k US dollar.

I don't think it is a good idea to start out with a new truck. Payments will be much higher on new and lower on used. There are also a lot of problems with the newer emissions. You need low overhead and reliability. I would suggest looking around for a good used truck and see how you like being an owner operator before going out and buying new. If you find that you don't like being an owner operator, it is much easier to get most of your money out of a good used truck than one you purchase new. I believe in allowing a business to pay it's own way. One consideration should also include what would happen if you lost the dedicated run. Would you be able to replace the run should something happen? When preparing a business plan, I always look at the worst that can happen. Too many new or potential owner operators only look at their plan using the best case scenario. That is a mistake most regret. You have no control over market conditions or the economy. If things go badly, you want to be able to survive. That can be difficult with new equipment. Many who had big equipment payments when the economy crashed a few years ago, did not survive. Many of us with many years experience struggled but were able to survive, however, most of us did not have the big payments. Remember, you can always trade up once you get your feet wet as an owner operator. You may find that you don't really want a new truck once you get to making money. Many of us are holding on to our older equipment rather than buying new. Older trucks tend to be more reliable and require a smaller capital investment. Set up a spreadsheet and play with the numbers. OODIA has a spreadsheet you can download which includes most of the expenses associated with running a truck. It is a good starting point. You can alter the program as needed. Owner Operator Independent Drivers Association, Trucking Association.

Very helpful information Thank You!

I went to a bank with my business plan and he questioned what I was doing and whether or not I knew what I was getting into. He had consulted an "Expert" and that expert felt I was not dealing with reality. Stated my income was low and my expenses were high. I asked the banker what the issue was if a guy planned for worst case scenario and TRIED to make the business plan fail. When I found a situation that met that requirement, I went with that or slightly better. Figuring real life would only be better.

Two+ years later, I am not doing bad. I can't say things are stellar, but to be able to pay cash for road repairs is sufficient and being able to plan major expenses help.

I never was able to figure out how guys are making it based on $1.70 per mile income and a $2300+ truck payment and paying $1500-1600 a month trailer rent.

The company that i'm with has so much work I will be busy for the next 30+ years. They have contracts with major Nickel and copper producers such as Xstrata Nickel and Vale. If there is no loads to be delivered then there is local work around the city delivering raw Mine Aggregate to the Mill for processing. The run that I would be on is delivering Copper Concentrate to the smelter which is approximately 400km from home terminal.

Rule #1.

Someone will ALWAYS underbid you and you will loose your rate.

Rule #2.
See rule #1.

Yea there's always that possibility too but it's not me doing the under bidding. Our competition is not local so the mines steer away from them when it come's to the contracts. For example the company that had this contract for 25 years now work for us so good chance we got it till someone takes over if they can supply the mine with the equipment. And if that happens ill just follow the contract I will be independent. If you want check out there website at Day Group very versatile company

I need to be tottally independent to get in with this company Plates, Insurance, IFTA thats all at my own expense.

Do you? That's the whole point "need" or "want"... Personaly, i don't see much difference in the income in your case scenario. Yes, it's a lot of money, but it's just a cash flow mirage. Don't get me wrong, it's kinda hard to make an analises from so little info, you might do well, and will find a whole new meaning in your life, but that's not a guaranteed. If it's not broken, why fix it?