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Buy a truck for a year?

Discussion in 'Ask An Owner Operator' started by hiwaysteward, Oct 30, 2019.

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  1. Oct 30, 2019 #1
    hiwaysteward

    hiwaysteward Bobtail Member

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    Hey everyone,
    My partner and I could really use some feedback on the following question...

    After 7 years driving as team, my partner and I are once again looking at buying a truck and going owner operator. We’ve talked about this for several years, came close a couple of times, but never pulled the trigger.

    Recently, we got all our debt taken care of. Yes! It feels great.

    We have the funds to put down 10% on a new truck. Have a healthy maintenance fund put away. And have financing ready to go with very reasonable rates. We plan to lease on with a good company rather than get our own authority.

    HERE’S THE QUESTION.

    We know we don’t want to drive for another 5 years - or even three. We’re really looking at one year. Is it smart to buy a truck with the intention to sell it after 1 year?

    We’ve also thought about making it a solo truck after the first year as team. Or, we could hire a driver for the truck. But it would be someone we know and trust only.

    Feedback from owners would really help. Thanks in advance.

    - HS
     
    hiwaysteward, Oct 30, 2019
    hiwaysteward, Oct 30, 2019
    #1
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  3. Oct 30, 2019 #2
    Mid-May Trucker

    Mid-May Trucker Road Train Member

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    Anyone can roll a truck.
     
    Mid-May Trucker, Oct 30, 2019
    Mid-May Trucker, Oct 30, 2019
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    buddyd157 Thanks this.
  4. Oct 30, 2019 #3
    LDLWells

    LDLWells Heavy Load Member

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    My first year as an oo was probably my hardest year driving, followed by learning to haul oil, then my first year driving. There's no one to hold your hand
     
    LDLWells, Oct 30, 2019
    LDLWells, Oct 30, 2019
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    D.Tibbitt, hiwaysteward and Bean Jr. Thank this.
  5. Oct 30, 2019 #4
    Ridgeline

    Ridgeline Road Train Member

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    One year?

    The projection for capacity for six months is still too high, rates may go down some more.

    Want to stay out of debt?

    Just stay where you are at and ask again in one year.

    Chances are you won't find a good driver, that takes time and time means you can either work or you spend time looking or in another way, you make money or you don't.
     
    Ridgeline, Oct 30, 2019
    Ridgeline, Oct 30, 2019
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  7. Oct 30, 2019 #5
    RoadRooster

    RoadRooster Road Train Member

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    Start up costs, and only a year to recover them, plus make more bank that a company team sounds pretty sporting.

    Price out your registration, insurance, taxes, double social security, healthcare benefit, 401k (especially if employer contributes), and see if it still makes sense.

    Good luck whatever you decide.
     
    RoadRooster, Oct 30, 2019
    RoadRooster, Oct 30, 2019
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    D.Tibbitt, hiwaysteward, TallJoe and 1 other person Thank this.
  8. Oct 30, 2019 #6
    TallJoe

    TallJoe Road Train Member

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    If we're talking about a used truck, you'd be glad to make it at the level of a company driver income in that first year. In my first year, I spent over $20K in maintenance and repairs.
    Selling a brand new truck after one year, as if it made enough profits to offset its loss of value is also doubtful.
    Hiring someone as a driver and hope to make profits from that person driving that truck efficiently and loyally is something that does not work most of the time either. Unless you buy 5-10 more quick , build a fleet.

    No. One year is nothing. I would not bother for one year only.
     
    TallJoe, Oct 30, 2019
    TallJoe, Oct 30, 2019
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  9. Oct 31, 2019 #7
    hiwaysteward

    hiwaysteward Bobtail Member

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    Sounds about right! Every step so far has been a learning of one kind or another. “First year as oo was my hardest year of driving” is the point that struck home first when I read your post. And point taken.

    I agree about rates, which leads directly to “timing”. I have started to take the step into oo more than once. Every time something puts the brakes on it. Right now is also not the best time to get into a new truck (going into winter) and this next year is likely to be pretty up-and-down with the election. Thank Ridgeline for your post.


    We have done exactly what you suggested. Based on our current monthly costs (the basics always there like food, insurance, housing etc) we’re ahead a little bit but the first year would need to go smoothly LOL. Since I’ve never seen anything go smoothly regarding trucking... I’m not counting on that. I can’t see how 1 year will be enough.

    Did you buy a brand new truck? I would expect to have at least that much set aside for a used truck - but brand new? 20k seems high.

    No one is ever going to drive or care for a truck like the owner - at least for a small business - so you’re right and we weren’t putting too many eggs in that basket. The option of putting a driver in it did come up. Probably wouldn’t do that at the end of the day.


    ————
    The idea of buying a truck has been discussed between us for a long time. The pros and cons along with cost breakdowns and studying everything that can affect your business - including maintenance/upkeep (i.e., Pittsburg Power, best shocks, oil, tires) and best accounting and tax practices each year and more.

    I don’t see how 1 year makes sense but wanted to post the question to people who have experience — to see what the feedback would be.

    We’ve met people along the way who seem to just jump in with both eyes closed and still end up doing very well as oo. Not sure how that happens? Maybe the tales of their success are “fish tales”. Who knows.

    It’s not something to do lightly - kind of like getting married LOL.

    Really appreciate everyone for responding. Whatever is decided we’ll be sure to come back here and post a note about it!

    Thanks,
    HS
     
    hiwaysteward, Oct 31, 2019
    hiwaysteward, Oct 31, 2019
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  10. Oct 31, 2019 #8
    TallJoe

    TallJoe Road Train Member

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    No. I bought a used over 500k miles truck and to such I was referring to. I would hope that a brand new truck means a minimal maintenance cost and almost no downtime. Assuming anything else, it would not make sense to even consider a brand new truck.
     
    TallJoe, Oct 31, 2019
    TallJoe, Oct 31, 2019
    #8
  11. Oct 31, 2019 #9
    Eddiec

    Eddiec Road Train Member

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    Look into Full Maintenance Vehicle Leases offered by OEM's. A truck depreciates in value - so like a car purchase you would most likely not recoup the money that you paid for it.


    Daimler offers pay-as-you-drive lease, unveils new DD15 engine
     
    Eddiec, Oct 31, 2019
    Eddiec, Oct 31, 2019
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  12. Oct 31, 2019 #10
    FoolsErrand

    FoolsErrand Road Train Member

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    New equipment suffers its most rapid price depreciation in the first year so id rule out new. Maybe 2 or 3 yrs old just to cut that issue out?

    The 1 year plan isnt a terrible idea but its hard to calculate the best time. Whenever the next crash occurs it will drive lots of trucks off the road and into auction houses with few buyers so the equipment price will temporarily crash for months, maybe a year at most. And whenever the recovery comes there will be a truck shortage that spike rates way way up because the load to truck ratio will be in the trucks favor. This spike will level off as other players come back into the game so it cant last too long either.

    That these things happen is easy to note and understand but hard to project accurately on a future basis. Thats why they call it luck when youre in the right place at the right time. All you can do is work on your preparedness. Save the money and shop equipment so youll be able to IDENTIFY the change and act on it.

    And have an exit strategy, always.
     
    FoolsErrand, Oct 31, 2019
    FoolsErrand, Oct 31, 2019
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    hiwaysteward Thanks this.
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