Owning a Trucking Business

    Most drivers dream of someday owning their very own truck. Some people are so caught up in this dream that they walk right into a predatory lease, which will ultimately leave them in debt and even further from their goal than when they started. It’s extremely common for lease-operator agreements to be highly profitable for the trucking company at the driver’s expense, and you absolutely must make sure you aren’t signing a contract that is designed to make you fail. TruckersReport forum member Rawze posted some great tips to help drivers identify rip-off leases:

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    A trucking owner operator is a driving professional who owns his or her own rig – or fleet of trucks – and contracts the hauls independently. Owner operator jobs are a rewarding step from driving professionally for someone else. The driver is in charge of his or her own driving schedule, as well as what he or she chooses to haul and to where it will be hauled. Owner operator trucking jobs also come with a lot of responsibility, which is already instilled within the professional truck driver. Drivers are subjected to CDL training and must test extensively to get their CDL permissions in the first place; they already understand how to operate the machines in a safe and responsible manner. Therefore, switching from being an employed truck driver to an owner operator driver, while a big step, isn’t so monumental that it can’t be done. [click to continue…]

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    Choosing the best lubricants and oils for commercial trucks is a constant topic of debate amongst owner-operators.  A better product translates into money saved by decreasing wear and maintenance costs, and increasing fuel mileage.  The old conversation about choosing synthetic lubricants or non-synthetic oil was recently revived on the forum:

    In my VN670 with 16 liter volvo engine I use Delvac fully synthetic oil since new.  Change interval 50000 miles (according to manual using mineral oil change interval 25000 miles).  Hope to see your comments soon guys.

    My buddy also uses Delvac 1 in his truck, I think he said he changes oil around 60-75k, but changes the filters at 15-20k.
    All the research I’ve read seems to suggest that you can use regular oil during the mild weather months (spring and fall) and use syn during the rest of the year, since syn oil’s increased resistance to temperature extremes helps the most then. But of course, using it all year round won’t hurt anything, and should help keep your engine cleaner (on the inside).

    Some drivers discuss fuel mileage improvements:

    I use Amsoil’s Heavy Duty Diesel full synthetic, and also use Amsoil throughout my truck for the transmission and axles. This is on a 2000 Volvo with Cummins N14.

    When I first bought the truck, it came with what I’m sure was conventional oil. After switching, I immediately noticed that my truck was running cooler on hills. Where the fan would kick on at the top of the hill before, the temp wasn’t even getting close to that.
    Fuel economy also started to climb. I was getting an average of about 6.1-6.3, and now I post 7-7.5 pretty steady.
    I have always used synthetics in my vehicles. After seeing a dyno test done by a Mustang publication years ago, it really changed my mind. The test Mustang actually got 5 extra hp at the rear wheels! Add to that the extended drain intervals, and it’s a no brainer. [click to continue…]

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    For some, the pull of the open road starts early, tugging at them while they’re still kids with the “come hither” appeal of a particularly attractive member of the opposite sex, and millions have answered that call.  For thousands of drivers, driving for the company isn’t nearly enough, and they want the full experience of being in business for themselves.  However, many would-be owner-operators have to face the harsh reality that financial skeletons in their closets have put their dream out of reach until their credit situation improves.

    Recognizing the demand for a viable alternative, many trucking companies have put together lease purchase, lease option, and drive-to-own opportunities for drivers unable to pursue their dreams through more traditional financing sources.

    The question is: Does leasing a truck from a carrier ever make financial sense for the driver — or should you avoid all of them like the plague?

    The answer to that question depends upon your individual circumstances — and whose message you choose to believe.

    The Carrier

    From the carrier’s perspective, leasing a truck makes perfect sense for those drivers who are credit-challenged or have a lack of down payment money and other start-up costs.

    Carriers have heavily marketed lease opportunities to would-drivers as a short-term path to truck ownership, and thousands of drivers have taken the bait.  While the terms vary from carrier to carrier, carriers claim that leases benefit drivers in a variety of ways, including:

    • Low Down Payments (in some cases — no down payment)
    • Low deposits
    • No long-term commitment
    • Opportunity to drive up-spec equipment
    • Pride of Ownership
    • Relaxed credit standards (in some cases no credit checks)
    • Lease completion incentives (cash back, lease buy-outs, etc.)

    This gives lease operators the chance to experience first-hand the perks of ownership, while limiting their financial risk.  Many carriers advertise their leases as being “walk-away” leases, meaning that the driver can simply walk away from their lease obligation if for some reason things don’t work out.

    Driver Advocacy Groups

    Driver advocacy groups have a different take on carrier-sponsored semi truck lease opportunities.  Some, such as the Owner-Operator Independent Drivers Association (OOIDA) have successfully filed class-action lawsuits on behalf of drivers who have fallen prey to unfair or illegal carrier leasing practices.

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    On the forum, an owner-operator team discusses how they purchased their semi trucks:

    His first time getting his Own Truck, was finding someone in our area that had a for sale sign on it.
    An Owner Operator in the next town had a 79 KW900 for Sale sign on it. This was back in 1985,. He approached the guy and since they were both truck drivers, he asked the guy if he could make payments on it. The guy needed to get rid of it due to a divorce , and said Yes!
    They both went to the bank were the guy had it financed and the bank drew up a third party contract for them. $700 dollars a month., that he would take over the payments. The contract was written , after the full payment was made , the truck goes in my husbands name.
    The Second time was easier,,,, when he wanted another truck, he did the same thing. Approached a Local Owner Operator who was selling his truck.
    Well my husband was working for a Straight Broker, hauling produce. He asked the guy if he could make payments on the truck, cause he already has the work for it. He gave him 1,200 dollar down payment.
    The guy made up his own contract.
    We got about 3 or 4 more trucks afterwards., by the same method. A Volvo, International, and 2 Peterbuilts. His last one now is a Red 379 Peterbuilt. And he used his previous sellers as references.
    As Long as you find someone LOCAL, there shouldn’t be a problem asking to make payments.
    Many Owner Operators will advertise in your local paper , selling their truck for a specific amount.
    It doesn’t hurt, asking them if you can make payments on it.
    The reason to stay Local, is, if you stop making payments, he can come take his truck back.
    This a Reasurrance for the Seller.

    Forget all that Heavy Finance charge from a dealer.
    But you don’t get a Warranty buying a truck this way.
    So make sure, you check out a Truck Completely !
    Before Buying. Know what you’re buying! Tires and all!
    And it’s that easy. And all trucks were fully paid within a year or two.
    By the way, we did this, to get trailers too.

    Some dealers are shady!
    You pay much more on a truck with higher payments, along with extra finance charges.

    You may be getting one of these fleece trucks, in which this truck has been through many hands. That means, when a truck has gone through many hands, that truck has been beaten to the ground.

    We ended up getting two more trucks, and placed drivers in it.

    Some company drivers don’t give a hoot on maintaining the truck.
    Why? Because it’s not their truck.
    They didn’t care about checking the oil or water and so forth. We had one truck sitting in the middle of the country with a blown engine.. because of their negligence. That was another Kenworth that we had.
    Finding a truck from another owner operator, you know that truck was well taken care of.
    Owner operators, takes care of their trucks, like it was their baby.

    Another Owner-Op adds his experience:

    In a round about way, thats how I got my first truck. I saw an ad for end dump drivers wanted. I called him and explained I did OTR for (at this time 6 years). He told me he needed people with thier own trucks but I must have talked the right stuff. He said he would buy a truck up to 20,000 and I would just pay him back. $700 a month for my new 94 KW T800 complete with wet kit. I did 50%OTR and 50% city work. I could have paid it off sooner but took my time and paid it off in 2 years and three months.
    Like an idiot, I sold it to another driver because I was going to try the college thing.
    I just signed papers on my second new truck officially today with a dealer.

    Read the rest of the thread here

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    Regardless of whether you’re a starry-eyed rookie driver or a grizzled veteran with a million safe miles under your belt, you’ve at least considered the possibility of giving up the security of a guaranteed weekly paycheck for the chance to live the entrepreneurial lifestyle as an owner/operator.  This is an achievable goal, but before you pick out a new truck and kick your current employer to the curb, you need to ensure that your ducks are in a row and you have set yourself up for success in what is a highly-competitive business environment.

    In order to put yourself firmly on the road to success, there are a number of critical decisions and self-assessments that need to be made.  While failing to take all of these steps doesn’t guarantee that your new venture is destined for the trash heap, following this roadmap does dramatically increase the chances that you will look back on this time with fond memories.  So use this guide as a general framework around which to build a profitable, self-sustaining business. [click to continue…]

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