Taking the plunge. My journey as an O/O.

I have decided to stop staring at the water, and jump in. Today, I turned in my Crete/Shaffer truck at the Lenoir City terminal so they could convert it into an O/O truck.

2016 Freightliner. 443k miles. The last 250k of those miles are miles I put on the truck.

The price of the truck and an additional 2 years/200k miles warrantee which will activate at 500k miles is 68,750, but I am getting a discount of 5 cents per mile over 400k, so the actual total is around 66,500.

I will be putting 12k down, and getting a 55k loan at 7% for 36 months.

My payment will be about $400 per week. They need to re calculate the loan based on the miles I drove since the last time they ran the numbers.

I wanted an automatic for fuel economy. I also wanted a truck with a better desk than the one in my current truck. However there was something else I wanted more. A truck that I was confident had no immediate or hidden severe issues. The only way to reliably know this would be for me to buy my company truck, or buy new. I am not jumping into a new truck as my first truck.

My truck has had it's issues, but those issues have always been fairly simple fixes. A relay here. A replacement wiring harness component there. A starter and an alternator. A radiator hose leak. Recently, there was a transmission slave cylinder leak (and a clutch brake issue directly related to it), and a computer mainboard corrosion issue. All of these issues were addressed.

She's a solid truck, even if she's not what I want.

Next: Exit Strategy.

 

The particular flavor of O/O that I have chosen is to drive under the authority of Crete/Shaffer, rather than my own authority. This reduces both my costs, and my potential income. I recognize this.

More worrisome, and the reason for this second post, is that by becoming an O/O, I am taking on risks.

I have an exit strategy. It is very simple. I must match my quarterly personal income as a company driver within a year in order to remain an owner operator.

This will be based on my quarterly tax reporting. The first couple quarters will likely be stumbling bocks as I learn, but by the end of the first year as an O/O, if I am not taking home as much per quarter as I did as a company driver, then I will sell the truck and go back to being a company driver.

The only exception to this would be if the difficulty is a single major event, like major engine or transmission service. I will not count a quarter if it includes a major repair.

I will, however, limit myself to 'not counting' only one quarter.

My gross income this last year with Crete was 66k. That means I need to make 16,500 per quarter AFTER truck expenses (but before taxes) in order to match my company pay.

If I cannot do that by the 4th quarter without major expenses, or the fifth quarter if I have a quarter with a major expense, then I sell the truck and go back to being a company driver.

There is a second stage to this exit strategy. If I am not making 20k per quarter AFTER truck expenses but before taxes by the end of the second year, then I will also get out. I do not want the extra risks without some extra income.