Truck Financing Questions ?

Marty has been gone for about 15-16 months !!!!!!!!!!!!!!!!!!!

 

marty hope op. was ok your back is pain free know!

 

I have a question about purchashing a used truck I jus got approved for a business credit line of 50,000 dollars kinda new to the trucking business been out there for about a yr and thinking about buying me a truck and doing my own thing but just do not know where to start as far as the start up cost can a O/O help me

 

Can you let us know what is going on with marty? This one of the best forums that I have found. If he will not be back try to get someone from OOIDA to take over the info spot.

 

I don't want to rain on your parade, be hypocrytical, or taken the wrong way because I financed my trucking operation. financing my operation was the biggest mistake I ever made. I wouldn't recomend anyone in this economy take out a loan to purchase a truck. I guess the only exception would be if you had an exceptionally large down payment and got a great deal and only needed to finance 20-30%. Hell, even in a great economy when I started being an owner it was difficult. I made my money by not living out of the truck and having no life outside the truck. I made really good money and poor decisions that are makeing my life with wife and child worse than they could have. Only time will tell if it works out for me, I'm sure it will, but anything can happen. So, since I'm done crying over the milk I spilled, here's my guide to becoming a financially sound Owner Op.

1)find a good company to work for

2)practice running your business from the company truck, it's hard to tell what they're getting paid for so just figure $1 per mile and maybe $.30 per mile Fuel surcharge. Please don't tell me I'm wrong people, this is never going to be accurate every company is different, every broker is different, and every load will be different.

3)While you're running a company truck, save, save, save, save. When you think you've saved enough to buy a truck save 10% more for when that truck breaks down. Even if you bought a new truck, I don't know of one warrenty that covers towing. If you do have some type of insurance that covers towing then you'll need money for the deductable and how are you going to fund your existance with your method of earning a meager existance in a repair shop? some repairs could take multiple weeks? you gonna sleep the whole time in the drivers lounge?

4)find a good company that treats you fairly and stay with them.
This applies to both leasing on with a company or if running under your own authority try and stay loyal to a few freight brokers. running cut throat is a way that can eventually cut your own throat. Treating those people fairly who treat you fairly has been proven since the dawn of time. Not everytime things will fall in your favor that is why you saved that extra 10% and when the things don't fall in your favor your continued loyalty will tilt the deck of life in your favor in the future.

5) When it comes to locateing a truck, buy what you can afford. Don't get in expecting a cadilac truck and putting everything you have saved to geting it. It's better to have CASH!!!! and that even goes for after the sale. In business the more cash you have for future operating deficits the more financially sound your business will be.

6)The older the truck you buy the more problems you may have, make sure you make up for the cheaper older trucks with more money saved, also, California is doing really crazy things with limiting the age of trucks that operate inside there state. In 2014 you can not operate a truck that has a 2002 or older engine (any pre-EGR engines). I also believe that as other trucks hit 12 years old, those will also be prohibited from entering the state. I think this will be this way untill they have only the newest emission trucks. 2010 was the last in the EPA's change that I'm aware of untill the Science and Technology changes. The only thing that will change now is other mandates by the government (I think the Stopping distance of a truck is now in the cross hairs of the Fed's). California might use this to keep pushing older trucks of of it's road. I'm focusing so much on this because other states that don't care about small trucking firms are looking at california to mimic there statues and I see little hope of the Feds stopping them. Look to NY, OR, WA, AZ a sleu of North Eastern States and even FL for the next round of Owner Operator Punishment. Buy a truck that you know you can run in the State that you live and make sure the state you live isn't looking into the possibillity of doing what california is doing and if it is, make sure the truck you buy is going to pay for it self if it did get outlawed in your state of residence.

7) Get really familiar with the laws. The longer your out here the worse it will get. Have you seen a state repeal anything lately? NOPE? I didn't think so. The laws will only get more complicated and harder to understand. This is how the lawyers we elect to public office maintain job security for all there friends that didn't run or lost their election. The quicker you catch up on all the stuff that you don't know, the easier it will be to keep up with all the changes that are happening and will happen.

8 ) Run legal, with the CSA 2010 standards it's gonna be real easy to find yourself looking for a new career because warning tickets are going to count against your commercial driving record. Very big no no for owner ops because you might have a $50-150K wager on you being a trucker and if you loose your privalege to drive a truck then you'll be out a whole bunch of money.

9) This may be the most important thing you do which is why I put it last. You better do alot of thinking about becomeing an owner operator. It's like a crime family, once you're in you're in, but it can be crippling and painfull to get out. better do alot of talking to your friends and family because those relationships will change even if you're already a driver. You might have to go out for a month or more before seeing the house. You have to do what you have to do to pay the bills (this is why haveing a boat load of cash saved up gives you freedom and why you want to keep on building on your cash savings). You have alot more costs riding on your own trucks tires. You need to do what it takes to survive or else you might find yourself in a financial pinch. Having a #####y wife won't help either and might exacerbate the problem which is why you'll need to make sure your family is prepared for you becomeing your own boss.

I'm sorry if I left anything out, and even sorrier that I couldn't make this responce any shorter. I'm sure other drivers will chime in if I forgot anything but I think I covered most of what you'll need to know.
Good luck with what ever you decide to do.

 

Fuelnfire,
So much I agree with except one thing. This is the best time to r start in this business. Rates are coming back, used equipment is cheap and if ever there was atime that allowed for learning mistakes, now is the time.
BBB

 

UNITED TRUCK GROUP-They are a joke and a bunch of loan sharks! They do not report to credit. They will try to repo the truck with 1 or 2 weeks behind. They require weekly payments. No grace period with a $100 late fee for being 1-day late. If you require any repairs within the first 30 days, they keep your truck for days on end with no work for you. They have no negotiations and no refunds. They will tell you that the Finance Company is NOT affiliated with them when they are directly affiliated with them and they even have lunch with the people daily. This is a RENTAL contract and not a purchase. They require that you RENT the trucks at crazy weekly costs for 12 months and then go out after that and find your own financing for their price of the truck.....What a joke- that is why you went to them. Do not trade your truck in or give them money. Within weeks you will be walking!.

 

I've been trying to do a bit of research on either trying to purchase my own rig or lease with a company. Just not sure which way to go... I have called a loan place and they require me to have at lease 3500k or as much of it. And they can put me in a rig and also hook me up with a company to boot.

But still I am researching before I make a move. I would rather make a bit more $$$$ then continue to make a company all the money.

Any advise would be greatly appreciated.

 

My husband owns a truck 2005 Kenworth and has a steady job. He made about 250 last year. Here is the issue. We bought the truck in 2008 from a dealer. They helped to get the financing where we only put about 1000 down on this truck.

The deal was after paying on this for about a year, we could come back and upgrade to a new or newer truck. We still owe about 30000. Tried to trade in this truck, and the finance companies say no because we have so much personal debt. No late payments on anything ever though. Just a lot of debt. It has dragged down the credit to about 640 or so....maybe higher. But if you look at the credit reports, the debt is always paid on time each month.

Now we have a truck that we still owe 29 or 30K on, can't do anything with that, AND can't trade it for a newer model. We don't want a KW again.

We are not in any hurry to do anything, but would like a plan to get it done eventually. It's not looking so good right now for financing.

Do you think we're going to have to pay this truck in full first? We still owe about two years on this one.

 

What is wrong with the truck that you so urgently need to get something newer?

I, personally, would pay the thing off. Then pay yourself that truck payment into the bank and stockpile the cash. Then you can take that pile of cash and use it to put a large amount down on a newer truck. Trust me, if you walk into a truck dealership with 30-50% down, and decent credit, you are golden.

The other avenue I might pursue is using a large amount of that saved cash to retire as much of your personal debt as possible. That would give you much more financial flexibility and peace of mind.

I know those two plans are easier said than done. It takes discipline and sacrifice that many, if not most, people no longer have in this country. Not implying that about you, just stating a fact about modern society. Anything worth having is worth the effort and sacrifice required to get it.

Just the opinions of a jaded redneck. Take them as you wish.