Great Lease

We are arguing about financial gain so yes there is better and worse.

So having more capitol i will have less options avail to me in business........what?

You said it earlier my average rate of savings as a company driver is 30k per year over the past 3yrs. When i own a truck out right that 30k/yr will become much much more where do you think the money is going to go? A stamp collection? Its going into real estate and other investments.

 

There's like 5 separate arguments going on in this 1 thread, lol. Friggin awesome.

 

I love good debate. Especially when im winning lol

 

Had to make sure you weren't Hal. He would try to sneak this into our debate.

 

I never said finance a newer truck nor did i suggest paying cash for an older one. I suggested saving up the money to pay cash for a brand new one. I think thats a much better idea than leasing.

 

Schneider has some nice trucks for sale from their tanker division for $19K. Buy one for cash, then lease on to Schneider.

 

I want to start an animal rescue center for all the truck stop strays across the country...

 

I absolutely LOVE the threads where wannabes tell owner ops how they're doing it wrong. It's also very easy to tell those with little business education.

Mr I'm going to buy a new truck cash says that once he finally saves up enough money, he'll be able to save a lot more than the 30k a year he's saving now. He doesn't put a number on it, so we'll say $20k additional.
Now mr cash trucker needed the first year's 30k no matter what, so we won't count that.
In four additional years he'll have enough to buy a new truck, $150k. If he'd bought after the first year, and financed 130k at 7% for 4 years, he'd have a paid off truck AND $66k in the bank. That is his lost opportunity cost. Business finance is different from personal finance in that typically when you finance a personal purchase, your income stays the same, so the finance charges are lost money. In business, a purchase that gives you more revenue can easily offset the finance charges and give you a profit. In this case, the driver is losing $66k over four years. If the driver was already an owner op, then saving up would typically not have a lost opportunity cost, unless a new truck led to more profit.

 

Speaking of little business education. Your forgetting when that truck is financed and after its paid for in four years that it will be not worth 130k anymore, it will lose value. Looking around the four year old trucks that im seeing can be had for around 70k. Thats looking at 4yr old used trucks with around 600k on the clock(125k mi/per/yr) which more or less what i would expect to run a truck so its apples and apples. So 130k minus 70k comes to the equipment depreciating 60k in the time it took to pay it off. Using your own numbers you said i would be 66k ahead if i financed, but you didnt account for 60k in depreciation. So it seems i would only be 6k ahead at the time the trucks paid for. For 6k in four years you can have the risks i would have been exposed to during that time. When i become an o/o ill do so with NO TRUCK PAYMENT and thus have much less risk. Not to mention you just advised that a new driver get only one year of experience under their belt before going out and purchasing a brand new $130,000 piece of equipment. Thats hardly enough experience for a new driver to be managing a business with so much over head i would never recommend a new truck to a new driver for that reason. Considering that if that driver fails as an o/o they will lose their down payment, your advise is absolutely terrible, and all to come out a measly 6k ahead. Your also forgetting that when one pays cash for a new truck they can get 8yrs out of that truck with NO PAYMENTS vs someone who finances and gets four years in the truck with payments and only four without. You said yourself that i save 30k per/yr and you said that becoming an o/o will add 20k to that so i will save 50k/yr can you imagine how much that is in 8yrs now add compound interest to that. WOW! It seems your thinking is focused on short term goals.