Hey thanks for your help. I want to make sure my brother isnt screwing himself over, especially on my second question for you!

He is currently company driver (10 yrs exp give or take), clean record except for one preventable accident on his dac. Police were not involved/called. No ticket given. His trailer clipped a part of an old bridge in Chicago. No damage to bridge, just slight corner damage to trailer. It is on his DAC as a preventable. He is in the Chicago area.

1) What companies are considered best companies for owner operator? He'd prefer to run west, but not deal breaker.

2)NOW HERE IS WHERE I AM WORRIED FOR HIM! He is looking to purchase a repossesed truck 07 Peterbuilt 85,000 miles, for $93,000. I told him to really think about this with freight paying so cheap, trucks sitting, fuel going back up, and just the fact that he looking at a repoed truck shows how tough it is out there! I'm not sure how long he plans on financing this for but he has the idea he can get this for 500/month with little down! I think that is insane there is no way. Am I wrong? His other plan is to get a second mortgage on his house and use it to buy the truck, that way over a long term finance he can get his payment down to 500/month. He says he would just double up the monthly payments when he can. I'm thinking this is really not a good idea. My brother is a great guy, but not the smartest when dealing with business matters. Thank God his wife would take care of all bookeeping for him (she is not a trucker and will not be co driving with him)

I understand his dream of having a sweet ride and calling his own shots but I'm thinking he is digging his own grave. I told him to cap his truck purchase at about $30,000 if this is what he wants to do. I told him he may not necessarily make much more (maybe even slightly less) than a company driver but the difference may be worth it to him in terms of freedom.

Is his plan actually do-able or should I really push to talk him out of it? How long can you finance a truck for typically? Also so I can do some reasearch for him, what companies are considered best companies for o/o's? Would love some feedback from your experience. I Sincererally appreciate any help/advice.

93,000.00 is way over priced for an 07. Thats 3 model years old now.
At 6% it would take over a 30 year loan to have payments around 500.00 He would have to refinance his house because no conventional loan would go over 5-6 years.
Might as well just sell his house and move into the truck.

To start with, as Chris said, 93,000 is way too much to pay for a 07, especially a repo. He will likely not be able to finance that truck for more than 48-60 months providing he has good credit and at least 10-20% down. His payments would likely also run around $2,000/month. If he wants a $500/month payment then he is looking at buying a truck in the $20-25,000 price range. No matter where he buys a truck he will likely need 10-20% down, depending on his credit. If he has marginal credit then more of a down payment could be required. It is foolish for anyone to start out spending that much on a truck, even in a strong economy. Even though an owner operator may still drive a truck, it is still much different than being a company driver. It is also very risky to buy a truck with no money set aside for maintenance and other costs. When someone expects to buy an over priced $93,000 truck and have a $500/month payment then he is not ready to buy a truck. I would also caution him to NOT get a home equity loan to buy a truck. This is not an economy to take a lot of risk. You need to be prudent in today's economic market. I still expect things to get worse before the end of the year. Some rates are at or less than $1/mile and some owner operators are actually taking them. That is part of the problem. We should be in a strong market with much higher rates this time of year. Rates should be around $2/mile. Instead, many are pushing cheap rates. If your brother insists on buying a truck I would encourage him to buy something he can afford to pay for which would be around $20,000 that gets decent fuel mileage. He could get a good truck for that amount of money and should be able to actually pay for it.

There is much more to being a successful owner operator than driving a truck. From your description of him, it sounds like he would be much better off staying a company driver. If he has been driving for 10 years then he should have a good nest egg saved. If not, then perhaps this is not the time for him to think about buying a truck. There are some good truck drivers who should never buy a truck.

There are a number of carriers who might work for him. Those who seem to do best work on percentage. Some of this type of carrier don't have a dispatcher, such as Landstar. It is up to the owner operator to find the better paying loads. I am not necessarily endorsing Landstar, there are other carriers who also pay percentage, such as Jones, Universal Am Can, CRST, etc., Any recommendation would need to know what type of freight he wants to pull. Since you didn't mention any specific type of freight I assume that he wants to pull a van. Van freight is typically the cheapest, but he won't need to buy a trailer. Most of the van carriers furnish trailers at no charge to the owner operator. If he wants to run west then he should be prepared for the cheaper rates.

Thanks Chris. I know its a bad idea, i'm trying to explain that to him. Getting a second mortgage for 30 years just so he can get his payments down to $500 I think is a bad idea. His plan is though to make double/triple payments, but to have his minumum payment be at $500 so he figures he can at least make that if all goes bad. I still think its a bad idea. He also talks about taking month off 2-3 times a year. Being an o/o thats just not do-able at least I think it isnt, or is it?

Out of curiosity though because I told him I would look into it, generally which companies are considered the best for o/o. He is in Chicago area.

Thanks Gman. Thats what I told him. I told him to cap his truck cost at 30 thousand. He's a great guy, runs his load, doesnt sit at truck stops, but defenitely not strong in business smarts. The whole 30 year home equity thing realistically would not work would it? I told him the guy they repo-ed it from probably thought the same thing.

There are carriers who would take him but decent ones would look at the over -priced,unreasonable loan and pass. Myself,i would know it was a problem just waiting to happen.

It is not a good idea to finance a truck for 30 years using a home equity loan. He has the right idea about doubling up on payments, but I would not risk my home to buy a truck. It would be much better for him to buy a much less expensive truck, pay it off ahead of schedule and then trade up if that is what he wants. Since he is a company driver he may not be aware of what is actually happening with rates. Most company drivers run on mileage. They make the same per mile no matter where they go. Many are also paid on deadhead miles. When you own the truck you may or may not be paid on deadhead miles. Those who do pay deadhead miles may do so at a reduced rate. I would not want to lease my truck to a carrier who paid mileage. As an owner operator he will likely have additional expenses such as an annual 2290 ($550/year), base plates and permits ($1600-2,200/yr), fuel taxes, maintenance costs, etc., He needs to either have or gain some practical business skills if he expects to make it as an owner operator. If he wants to be a truck driver then he should stay a company driver. If he wants to be a businessman then he needs to buy a truck. Running a business is mostly common sense. There are times when you make decisions that are not necessarily what you want, but what is best for the business. For instance, as a driver he may want to buy a Peterbilt that will likely have a payment of around $2,000/month. A businessman would buy an aerodynamic truck that gets good fuel mileage for around $20,000 that would have a $500/month payment. A businessman understands that a truck is only a tool we use to make money. I have certain things in which I look for when I buy a truck. I don't care about the brand. I do prefer CAT engines, but would buy something else for the right price. The last truck I bought I paid less than $21,000 and it had a $18,000 in-frame less than 100,000 before I bought it. I knew when I bought it that I should get at least 700,000 before needing another overhaul. The transmission had also been replaced the year before. The truck gets almost 7 mph when I drive it. It was not my first choice as a truck, but it made business sense. The truck makes money for me and it is the type of truck your brother could afford to buy.

I think most drivers want to buy or own a Peterbilt. They are great looking trucks, but there are better choices for running a business. Pete's are one of the worst for fuel mileage due to aerodynamics. I do know of a few who do well on mpg's, but most do not do well. I have owned a Peterbilt and only got 5 mpg. That was quite a few years ago.

With the current economy, it may be difficult for your brother to take a month off several times a year. It may be impossible if he pays that much for a truck. A cheap payment would make it much easier to take time off, providing he doesn't have a lot of other bills to pay. Most owner operators and carriers are barely making it right now. Only a very small percentage are doing well. That means slim profit margins and taking less time off to pay the bills.

He is caught up in chrome right now. A good chance the poor truck will end up being repo'd again. It happens to most all of us with various purchases we can't afford but 93 grand is A LOT for an "I want it purchase"

The problem with financing a truck for 30 years is that the truck doesn't last 30 years. So you never get out from under your debt, and keep building debt upon debt.

But it's only 500.00 and i promise i will pay double or triple.(if i make enough)