THE ADVENTURES CONTINUE - DFO gets a truck and hops on Schneider's IC Choice Program

Go with option # 1 and pocket the 10K for the Inevitable Breakdown. With the difference and time being so little I'd rather pay an extra 6 month's and pocket the 10K. If the truck can't generate the revenue to pay for it self then it sure can't generate the revenue to do a major overhaul. Just my 2 cent's but after signing the Lease I'd have 10k more in my pocket.

 

I am with TennMan and vote Option #1:

~It actually is the most conservative option, leaving you with the most flexibility over time.

~You can put the $10,000 to work for you by, at a minimum, parking it in an interest bearing checking account. I personally would put a decent portion of it in the stock market but that's a comfort factor for me and my experience. I also own some rental property, but that's a whole different can of worms...

~Using somebody else's money is a time honored way of taking a little money and turning it into a lot more money. In this case, continue to use SNF's cash to allow you to utilize an asset that earns YOU money. It also follows an accounting principal where you match the cost of using an asset to the time when it is generating revenue.

Sure, it'd be nice to not have a truck payment, but flexibility and being able to put as much money to work for you elsewhere as you can will most likely over the long haul lead to greater financial reward. Just my two cents...

 

Looks good to me..but you could take the pay out then lease a new truck pocketing 3/4 or more.
It's actually cheaper tax wise to lease then buy..I was going to buy in the beginning but checked into it.
Something to think about.

 

please enlighten us all.....
if next year I pay 24k for a 2009 freightliner, and don't make $500 a week payments, how is that not better than making the payments?
I really don't understand, although I've heard the same several times.

 

All payments and maintenance are tax deductible.
Hell #### near everything is.
If you buy you can write off depreciation which doesn't add up to the same as new truck on a lease.
Yes I pay more but I have a warranty covering almost everything for the life of the lease.
Believe me I was skeptical but once it was shown to me I made the switch.

I was all ready to go with buying a new truck but changed at the last minute.
Look it up and see for yourself.

Paying 24k for a truck is just asking to go into debt..maybe you'll get lucky and get a good truck.
More than likely you will pay more in maintenance to keep it running.
I'm not saying a lease is for everyone..but leasing with SFI and running with SNI makes more sense.
YOU are in control of where,when and how you run not to mention how much.
Yes they have problems but who doesn't?

It works for me and others here.
Not cheerleading just stating it the way I see it.
Sure maybe I have drank the orange Kool-Aid..tastes fine and the money/freight is steady.

 

I understand the view from both sides, but I am with you. It's similar advice to not paying off your mortgage quickly so that you can deduct the interest. Makes no sense to me! I would rather pay myself more and have the security of no debt/less overhead. Cash is KING!!!

 

I never understand the logic of holding money in debt than cash. A write-off is nice to reduce your taxable income, but any accountant can tell you that when you work for yourself, every dollar used as a write-off only saves you about 33 cents in actual taxes. Interest (lease) payments work the same as spending money for your business. It just reduces your taxable income which reduces your tax liability. ex. I make 100,000yr; I have a 10,000 dollar write-off; now I am taxed on 90,000 income; instead of paying 33,000 in taxes, now I pay 30,000; in essence your paying out 10,000 to save 3,000.
33% is used as the general tax rate for self-employment. An O/O is going to pay much less that 33% , but that means that you're saving even less spending that 10k.
I am sure my punctuation is way off in the example, but I hope it makes sense. That was a way a good friend, who's a CPA for the last 20 or so years, broke it down for me.
Hope it helps.