Lets say I had $150k in cash to start off as an O/O, and was looking to spend around $65K - $75K on a good used T/T rig. Tax-wise, would it be more beneficial to finance or buy out-right?

I know an accountant is the logical one to ask, but I tend to get a much wider range of reasoning from the other end of the stick, so to speak.

Thanks Drivers.

Finance the rig is the answer. Rigs are assets that have a depreciation schedule. You would need to work with an accountant to understand how long to finance as at some point the depreciation is up and the truck has no value...at least on the deprecation scale. But then again, you probably would not be able to maximize the depreciation schedule buying a used $70K truck, you would have to buy a new $110K truck.

Pay cash in full. Now I could be wrong about this (someone will surely correct me if so) but the way I see it by the time you figure in how much money you're sending the bank as interest your "tax savings" suddenly become a cost. And you can still take advantage of depreciation write off on a paid for truck.

rollin coal is correct, depreciation is depreciation, whether the truck is financed or paid for doesn't matter.

Take a secured loan out using an equal term CD. First the interest will be deductible as a business expense. Next the interest rate should be very good, just a point or 2 above the earned rate on the CD. . .negotiate or go else where. The Interest earned on the CD will exceed the interest paid over 4 years. This is because the loan is a depreciating balance and the CD is an appreciating balance.

You are not at risk because it is secured and you will have the ability to pay the loan off at any time. Next you will have a Free and Clear title on the truck, if you need to trade it before the end of the loan you have that option without having to come up with any out of equity. Everything works at the end of the loan you still have your money and maximized your tax deductions.

You will depreciate based on year placed in your service and the trucks useful life. Find IRS publication 946 for starters.

Valuable info given to me long ago was: "Best become very knowledgeable about taxes, it is going to cost you a 3rd or more of your income and even more if you don't know."

Leverage up on credit. Place your money into a hard commodity such as gold. If you want to get a little risky, try some high dividend paying stocks. If inflation get out of control, your covered. Your truck will actually depreciate less according to it's nominal dollar value, while your loan will be marginalized. The inflation risk is normally nothing to even consider, but things are changing. Even the mighty dollar isn't safe in this economy. If your able to find a great deal BECAUSE of paying cash, your still doing what anyone would do. I just wouldn't recommend it, although I can't say I wouldn't try it. Putting all your eggs in one basket is a bad idea, especially trucking right now. There is no real bottom in sight to this industry as far as I can tell.

now i no that a lot of people will disagree with me , thats why there or so many trucks being repoed every day.

but think of it this way then decide,WHY would you pay 100.000 for a truck then haul a load that only pays 1500.00 and it gets worse if you try to buy a trailer.

the only way you will stay in this business is to keep your overhead down and you wont do that with the high payments that come with a high dolor truck o you will look ever so neat in that air ride seat BUT for how long i can promise you this , if you ever have a finance company take one away from you it will break your heart not to mention the bank.

if you buy usedyou may have to work on it, i have to work on mine all the time ,BUT there mine and i don't have to worry about the finance company at all.

i just bought another one a 1990 379 Pete with a cat engine, and yes i got to work on it before it goes on the road but in this business you got to work anyway BUT i only payed 6000.00 for it and its mine , all i got to worry about is washing the grease off. beats the hell out of payment and soap is cheap.

best of luck.---southernpride