Really cheaper to run a new truck?

typical straight line depreciation on equipment is for 3 or 5 years.

 

So,how much would you save in taxes on lets say a 120 000$ truck over the total time you can deduct it?

 

You'd deduct $29K each year for equipment depreciation.

so if you bought that $15K truck for cash.

And upgraded every year for 5 years trading in and putting $30K in cash into it,.....

You'd have done the same thing and not spent any money on interest to someone else and could have collected the interest in a money market or bond fund. 3% interest gained is still better than 9% interest paid to someone else.

 

You're not saving anything by spending it. The only people that think they are saving anything by spending are the uneducated. If I spend 28,000 a year on a truck payment, obviously I write that off via depreciation, the amount of which depends on your depreciation schedule. If I drive a paid-for truck, I might pay 7,000 in taxes leaving me with $21,000 in the bank. Which would you rather have at the end of the year?

 

Depending on your state, tax and title fees could make that a not so good approach, not to mention the fact of trade in vs purchase pricing, that is throwing a lot of money away. Here in FL sales tax on a truck is 6.5% in my county. I always registered my trailers in Maine to avoid it, but the trucks are unavoidable. I'd definitely rather give that 6.5 percent to a finance company for something tangible to me than the state who will waste it.

 

won't disagree with you on that one bit. It's just another way to look at it.

 

New truck gets 7 mpg but has to add DPF so total cost for fuel and dpf would probably equal a truck not using dpf but getting 6 mpg.

All basic maintenance is the same....oil changes, tires, brakes, ect ect.

Other maintenance on a older truck would not usually surpass 10k per year(except in a year where a overhaul is needed) whereas a new truck warrenty will cover these expenses. Down time could vary as to how much warrenty work is needed compared to a O/O who does his own work at home when he has figured home time anyway.

New truck has a 2k per month payment, older truck is paid off or significantly lower payment.

Most important, I believe is the ability of the guy with no truck payment to weather the slow times better then someone with 7 years of 2k per month truck payments.

If I am not mistaken.....Don't older trucks 2000-2003 pre egr engines get the same or better fuel milage as these new trucks that are out today? Not to mention they are more reliable.

 

My state doesn't charge sales tax on class 8 equipment as long as you have a MC number. There are ways in which to pay less taxes without going out and buying new equipment. I have had accountants tell me that I needed to buy more equipment just to save money on taxes. If that is your motivation, there are other options available.

Whether you are paying taxes or buying equipment, you are still paying out money. If you don't need the equipment then it is a waste of time and resources. I don't believe in paying any more in taxes than absolutely necessary. I also don't believe in buying more equipment than you need.

Starting out you need to keep overhead to a minimum. You will be learning and the last thing you need to concern yourself with is making big equipment payments.

 

My last OTR job was driving a 2007 Pete 387 with a 10 speed and a Cummins engine and I averaged 6.5 to 7.5 Mpg depending on how heavy I was, the terrain and what kind of conditions that I was in. That was with no Apu and most of our loads ran Heavy (77,000 to 80,000 Gross)