Seeking Guidance As A New O/O With A Lease . .

Discussion in 'Ask An Owner Operator' started by OONewbie, Jan 29, 2015.

Would you Buy New Or Used ?

  1. *

    New

    40.0%
  2. *

    Used

    62.9%
  1. OONewbie

    OONewbie Light Load Member

    245
    134
    Dec 2, 2014
    Charlotte,NC
    0
    Thursday January 29th,2015

    The beginning of my new career as a owner operator, I could use some insight....

    I have been doing my reading and I know there are several different threads that touch on this topic. I was hoping to get a fresh perspective and narrow down some key things I think I need help in starting my career as a Owner Operator.

    I was approved to sign on with Landstar, and have been approved for financing with Lone Mountain Leasing. I have looked into Fike & Cardinal as well, though it took over 2+ months to get verified and approved with Landstar , due to my prior employers not wanting to reply in a timely fashion for a reference.

    Either way, I have really not come across anyone that has anything bad to say about signing on with Landstar. I've spoken to several drivers that haul for them and most had nothing but good things to say. Can anyone tell me different ?

    I also haven't heard anything bad about Lone Mountain Leasing. There are a few horror stories floating out there but from what I can tell it was because the people chose to waive inspections and assumed the truck was in ok condition ... Can anyone tell me otherwise or anything to look out for before I sign on the dotted line?

    I am starting out with about $20k , I was pondering between the 2016 volvo 780 or the 2016 cascadia evolution "which claims 9.1mpg" on good road conditions , what scares me it's new technology and typically that's a thing to stay away from new tech.....

    I know some of you are already probably saying , why buy new? why lease, well with bad credit and no traditional bank will touch me and I don't want to get into a fleecing program like Arrow or CR.....

    The thought on buying new is it comes with a 5yr warranty motor and transmission and I can get a extended warranty on the bolt on parts as well...

    If I buy used , I am not too handy with a wrench if you know what I mean, I can do the basics to keep the truck down the road, but not like some seasoned vets I know. I could be buying someone else s headache and the money I'd spend on up keep could have gone to the down payment for something newer and better with a warranty..

    The down payment on the truck will be $14k + inspection and any advanced funds I have to provide to Landstar for the plates etc .That would leave me about $4-5k for emergencies and repairs and fuel to goto orientation and get my trailer.I will have a better idea on the final numbers soon to build a solid financial spreadsheet..

    I need to develop a business plan, a cash flow spreadsheet and to come up with a true calculation of cost per mile it will cost me to run the truck etc.... A business plan and setting goals is something I really could use some insight on from people that have done it and are doing it. It's easy to read websites and watch a few videos, but it would be nice to get the goods from a fellow trucker...

    I want to do this right.. So some guidance would be great, anyone that's on here that may work for Landstar or a Owner Operator that can give some advice and guide me on a path to working smarter not harder and help put me on a path to success ...

    I appreciate it and I look forward to the feedback.

    I will document the process and try to keep everyone informed about my journey as I go ....
     
  2. Truckers Report Jobs

    Trucking Jobs in 30 seconds

    Every month 400 people find a job with the help of TruckersReport.

  3. double yellow

    double yellow Road Train Member

    5,946
    10,065
    Aug 28, 2011
    State of Jefferson
    0
    Why is your credit bad? Has your credit improved significantly in the past year?
     
    OONewbie Thanks this.
  4. xsetra

    xsetra Road Train Member

    4,907
    6,539
    Aug 21, 2011
    0
    OONewbie Thanks this.
  5. OONewbie

    OONewbie Light Load Member

    245
    134
    Dec 2, 2014
    Charlotte,NC
    0
    I didn't realize till just this very moment either that Landstar would take such older equipment, I'm just scared of getting sucked into a money pit .. what's the lesser of 2 evils? new with a never ending 5 yr payment or buy a older used truck that could be a moneypit and bury me on the 1st run . . . the horror!!! in making a decision...
     
  6. OONewbie

    OONewbie Light Load Member

    245
    134
    Dec 2, 2014
    Charlotte,NC
    0
    I have no repos, bankruptcies or evictions etc .. Just a slue of older bills that mounted when recovering from a auto accident .. I do have about 30k in medical bills as well on my credit, but from what Cresco told me they really don't look at medical when making a decision .. oh my credit score is about 560ish
     
  7. Big_D409

    Big_D409 Medium Load Member

    552
    729
    Dec 1, 2012
    Robertsdale, AL 36567
    0
    If I had to do this all over again with out ANY guidance, I would still go with an old truck. Between the members on here and basic knowledge you shouldn't have any real repair issues. Part of being an O/O (in my opinion) is doing most of the work yourself, or at least being able to. You buy new and your truck, while under warranty, has a greater chance of being in a shop more often than a 2000 or older truck. You can get a great truck at a great price, just always have to be looking and you'll eventually find that deal. If the truck you buy kills you on the 1st run, then either it was in fact a fluke incident or the homework on the truck wasn't done properly or at all. This is just me though, my friend argued that new means warranty and new never breaks... He sold his truck back to the dealer 6 months after going backwards. Though there are people who buy a new truck and have zero problems. Like I said if it were me, I'd buy old. Best of luck!
     
  8. Blu_Ogre

    Blu_Ogre Road Train Member

    7,626
    43,791
    Jul 14, 2013
    Out west
    0
    I am an OO with a 2011.

    Per mile Cost of Maint is about double an older truck. New truck dealers burn way too much computer time trying to figure out what's wrong or not right with a truck. Those costs MAY get covered up by your warranty. The major piece not covered by your warranty is the down time. It seems most new truck spend a few months of their first year in the shop. You will have to continue making all your payments + hotel bill if the truck strands you on the road. If I did not live in Cali I would get an older pre-emission truck.

    Older trucks you can take to non-Dealer repair places and chances are you will be rolling again for a comparatively low $ and time investment.

    If you go for an older truck just imagine how much Maintenance and upgrade you could do for the $2k to $3k per month payment on a new truck. 1 payment = new clutch, 2 payments rebuild suspension 4 or 5 payments = in-frame. 6 Payments is a backup truck.

    Check Double Yellow's thread for solid number to work from on an older truck. Also Kevin Rutherford from XM has a new OO training program "Stop holding the steering Wheel" That should help with numbers.

    http://www.thetruckersreport.com/tr...ellows-company-driver-independent-thread.html
     
    Last edited: Jan 29, 2015
    double yellow Thanks this.
  9. mnmover

    mnmover Road Train Member

    1,237
    1,103
    Apr 5, 2009
    Lichfield MN
    0
    If you are going to Landstar, look for another BCO to help mentor you through the process. There are good agents and ones not so good. Flatbed or van? or just pull Landstars' vans? Enjoy your ebor, you just also have to have a paper log book with in case the ebor breaks down. If you have not made a choice yet, look at Mercer many oo's do very well there..
     
    double yellow Thanks this.
  10. Brandt

    Brandt Road Train Member

    4,055
    5,338
    Sep 17, 2012
    0
    I would go with new if you can. Old trucks need repair and a 15 old 2000 pre emissions is not going to be repair free. I had 2000 Volvo truck with 1,500,000. One of the drive axles rusted out and was leaking oil. It was like a $4,000 repair they said. The EMC(computer that runs the engine) is old and could go out, that $2,000. Everyone talk about how good the S60 engine is and mine was. I had it rebuilt but it still needed the Bull Gear in engine replaced. That not part of a rebuild and that a $4,000 repair. Plus the rust on the frame rail after 15 years and 1,500,000 miles the frame rail got some good rust and flaking of the steal was falling off. I got ride of that truck and got 2012 Cascadia with Tripac APU. These new truck don't like to idle because of the DPF filter.

    Something else people don't always talk about is the new truck tax rite off. I'm not saying it a reason to buy a new truck. Depending how a lease is written or if you buy a used truck like me. I basically don't have to pay any income tax for the next 3 years unless I make more money then I have been over the past couple years. You buy older truck the repairs are all a tax write off also. I'm looking for my truck to have at $25,000 income tax write off for the next 3 years. That kinda help with having truck payments again I think.
     
    Last edited: Jan 30, 2015
    OONewbie Thanks this.
  11. double yellow

    double yellow Road Train Member

    5,946
    10,065
    Aug 28, 2011
    State of Jefferson
    0
    You've got a 560 credit score and presumably a net worth of -$10,000. Now doesn't seem like the time to start a high-risk business and take on $150,000 in debt.

    I'm not a loan expert, but I'd guess you'd be looking at ~22% interest on a $150,000 truck with 15k down. Paid over 5 years, that $150,000 truck would cost you a total of $260,000.

    If you had 800+ credit, you might be looking at a 6% interest rate which means that $150,000 truck would cost $176,000 over 5 years.

    So your bad credit is going to cost your business $84,000 over 5 years -- thats $17,000/year!


    An above-average BCO might hope to earn $75,000 their 1st year, but with 7 years experience you should be making $60,000+ at a decent company. After subtracting that extra $17,000 in finance charges, you'd be taking on a lot of extra work and risk hoping to earn $58,000 -- $2,000 less than you make with someone else taking the risk...


    This is a long-winded way of saying I truly think you would be better off taking a year or two to get your personal finances in order and to study the business. If you must go forward, I'd strongly suggest saving $25-30k and buying a ~$15,000 pre-emission truck.
     
  • Truckers Report Jobs

    Trucking Jobs in 30 seconds

    Every month 400 people find a job with the help of TruckersReport.