TRUCK FINALLY PAID OFF BUT NOW...

Well lets say you'd be forking out $2000 a month ($24k a year) for payments on a new truck. Now if your paid off rig is costing you on average of say $30k a year in repairs and downtime (which can easily happen if you need an inframe one year). You'd be far better off jumping into a new one with warranty in that scenario. That's just my $0.02

 

Well you can always
sell truck
Lease at prime
Regret life decision
Suicide

Or

Keep,fixing it now that you're going to be making a lot more profit.eventually it'll run right.

 

newer trucks also get better mileage.

the 12FL i just got out of was no better then all the other pigs pulling a flat. around 5.5.
this 16 i'm driving now. averages 6.5 pulling flat. last week, i pulled our conestoga and got 8.5 to seattle and back. but the loads were light so that helped out. i get around 7.2 pulling a van. it was nice to make that 1700 mile round trip and still have 50 gallons out of 300 left.

we're all mountain driving. so imagine what i'd get on the flat lands.

one driver made an argument of better fuel mileage though. you spend less. but pay the irs more on that taxeable profit.

 

on the bright side, if the 2014 is California compliant you can go anywhere

 

I could never figure the logic behind that theory.
So you make $10,000 more a year, pay the IRS 25%, your ahead $7500. But people object because they have to pay more taxes???

 

You forgot about the initial hit right off the lot. Not to mention the breakdowns that the "warranty" does not cover. Then you have the interest that you are paying. You are sending the bank thousands to keep from sending the government hundreds.

The costs that do not change are oil changes, tires, brakes etc that are considered wear parts. Then with breakdowns because you have a "warranty" you have to take it to a dealer so it will be covered. While you sit an extra 3 days for a headlight switch because they were busy at the shop. When a older out of warranty truck you could have take anywhere for repairs.

$150k at 6% would cost you $8200 roughly in interest for the year. That is a lot of parts. When you rebuild the mechanical parts of the truck what do you have left that is old? The frame, cab and front axle. Everything else has been rebuilt and you can do it for a lot cheaper than buying a new truck.

We currently have 3 projects in our shop where we are rebuilding the trucks including new cabs and it will still be cheaper than a new truck, even with having to get the frame stretched and swapping the transmissions for 18 speeds.

In the end, it is not how much it depreciates, it is how much you can sell it for. I don't care what you have, I am not going to give someone 60-80k for a truck with 500k on the odometer. I would buy a $20k truck and put $20 into a rebuild and still have $20k for the rest of the truck. And I would save well over $100k in the process. if you go looking for a truck with this in mind then what you really need to check is the bones of the truck. if the owner has taken care of the rig then I would say go for it.

I thought for a long time that I was going to go with a glider kit but have worked all the numbers and the older trucks with a rebuild are more cost effective. Problem is that most will not have the cash to lay out for all this and banks are not going to loan you the money for an old truck. Debt is the biggest killer in any business and especially with trucking.

You can only depreciate the truck so much but a repair you can write off all at once.

 

Great take. Really sums it up.

 

the interest is a tax write off. according to KR.

Any shop that's authorized, can do warranty work. Besides the dealer. Think, Rush truck centers.

 

Some of the newer trucks can get 8-9mpg, but suppose you're only getting 7.5-8 or 2mpg better than you're getting now. If you drive 10,000 miles each month you would save 416 gallons, and using current $2.50/gal