Lease/Purchase?

Thanks for that link. I've downloaded the ebook and will read it.

 

that's a good start. Look at your numbers. If you had a bad week and only got 1/3 your miles (1000 miles) , after the fuel and expenses on that 1k mile week, would you break even? even if you took home no pay?,...or would you be behind in payment after deducting fuel? If you cannot break even on 1/3 your miles after all expenses, then you are setting yourself up for failure.

Most drivers successful solo actually only rely on getting long term over a year about 2500 miles/week at best for the weeks they are out. do not count on 3k. add in the fact that you want to get home 1 week out of every 7, lets say. that's easily 8 weeks off in a year, no income. This leaves 44 productive weeks avg/2500 miles. Actual 52-week avg is now only 2110 miles/week for 52 weeks. Add downtime for repairs, maint, etc, and the number keeps dropping. This is realistic of what you will be facing, so you had better see a decent profit at the 2k/week mileage range, or you will not be able to keep any money. Of that money you do keep, you will buy oil, filters, parts, and other constant smaller expenses your maint. acct is not going to cover.

One sure-fire way of telling if your going to be ok is look at your profit margin. A profit margin of 40% long term is usually the 'break even' point and still take some money home to keep. below 40%, you are in struggle-mode. Below 30% and you are doomed for failure.

Divide your final paycheck by your gross income then mult. it by 100...

settlement gross (before any expenses) $3275

settlement expenses (referencing your post 346.15+50+32.50+137.50+150) = $716.15

fuel (2500 @ $.55c/mile) = $1375

paycheck = 1183.85
============

(1183.85/3275) * 100 = 36% profit margin.

if your fuel costs were 0.50c/mile, you will be at 39% profit margin. Really thin profit here but you may make it if you are well disciplined. This means a good fuel discount and 7+MPG.

What is killing this lease is the the 137.50. I have 2 drivers on my truck, and we only pay $53.00 each of us a week. At $60/week you will be in the 42% profit bracket. OK but not great. Get that expense lowered to less than $60.00/week and you will fair much better. The price of the truck is ok as long as it has less than 350k miles on it.

you need to get your total costs at 2500 miles BELOW $600.00 for this to be a go/no-go for you before fuel.


Look at things in a practical way, not in a way that you would like to see it. If it cannot work looking at this way, then it will not work out here on the road.


this is assuming there are NO other expenses like admin fees, IFTA, permits, etc.

 

Consider well the truck that is going to make or break your new business...

some reading beyond opinion...

http://www.thetruckersreport.com/tr...y-buy-my-next-truck-should-2.html#post3420134

 

I signed the deal and have the truck. It's a 2010 Cascadia with 415,000 miles. It has an APU. The dedicated lane I took will give me an average of 2600 miles a week. Two trips one week and three the next. On the short weeks I can get a short haul from Dallas to Austin or Laredo if I want or I can take the time off.

 

Keep us updated, and if you have trouble, post it here, there are always people willing to help as much as they can.

Here is a new thread related to the subject with some good info as well...

http://www.thetruckersreport.com/tr...rator/222195-so-you-just-leased-truck-eh.html

 

........good luck. your gonna need it

 

Your better off a company driver. I did percentage and mileage and believe me buddy there is no way to make more than a company driver. They'll give you an average distance your truck will run every week. "We average 2500 miles a week". No matter if every single delivery is on time. Your a polite person to the customers. Kiss the dispatcher's tail....you'll end up with 1800 mile weeks sitting at truck stops trying to sweet talk the dispatcher trying to explain you need what they blew up your rear end. You'll be given heavy load in the hills to suck that fuel down. You'll sit for hours waiting for a call or QUALCOMM and get offered a load that you can get delivered in time only if you keep the hammer down......again sucking more fuel. The percentage deal I ran was terrible.

 

I agree that his margin is narrow on this one, very narrow,...but Having a long term goal to own that first truck outright will far outweigh the lower pay if he makes it through to the end and has that clear title. This would put him in a position to make a LOT more money as well as having a few years experience with truck ownership.

Almost all the successful,...Very successful, business owners that I have ever met did not get that way on their first try, but rather learned through the hardships of their failures. Its always those who say its 'Impossible', and/or those who give up easily that are quick to shoot someone down, but when you have successful, experienced people telling you that there is something wrong, then there is likely to be an actual problem with what you are trying. Does this mean that someone will fail?,...Definitely not, but the odds are possibly stacked against them greatly.

 

Here is the whole deal

I run from Brownsville, TX to Laredo, TX to Kansas City, KS and back to Brownsville (2600 paid miles a week)
I'm paid 90 cpm plus 41 cpm fsc ($1.31)
That's $3406.00 gross income per week.

Weekly expenses
Lease Payment: $346.15
Permits: $50.00
Insurance: $32.50
Work Comp: $137.50
Total: $566.15

Bringing my gross income down to $2839.85

Subtract from that .06 cpm that goes into my maintenance escrow account ($156.00 for the 2600 miles) bringing it down to $2683.85.

I haven't really had a chance to calculate my mileage yet, but assuming I get only 6 mpg with an average fuel cost of $3.50 a gallon (including my 5% fuel discount I get buying through the company) means fuel costs me 58 cpm or $1508.00 for the 2600 miles I'll drive. Take out another $38.00 for tolls and that leaves me with a net profit of $1137.85 a week net income.

That may not be as much as many of you make owning a truck. But, It's about double what I've been making as a company driver. 30% of that will go into a savings account to pay for other maintenance, upgrades, taxes and saving for the balloon payment at the end of the lease.

This may not be the best deal, but it's not a bad deal IMHO. Or is there something I'm forgetting?

 

Keep in mind you are going to have to pay your own taxes quarterly. Whereas as a company driver, company paid half of your 15.3% social security, as a 1099 driver, you have pay all of you social security which is 15.3% total. You also are going to have to keep up with fed. and state taxes. Hope it works out.