buying a cheap used truck?

Crystal and truckers don't mix.

 

Well if you really want to break it down here we go.
30 days to pay so you haul a load for 1000 you will wait 30 days to get that 1000. If one puts $1200 in fuel in their truck on a 3000 mile week that translates to 6.25 miles a gallon at 2.50/gallon for fuel. Ok so in 30 days you've run up a bill of $4800 in fuel alone so now we are down to a bank account of $15200

Take $400 for a service at speedco or whatever now we have just gone down to $14800 take your drivers wage. say $800/wk ok now we have just hit a bank account of $11600

Now just for ####s and giggles lets say our A/C quits blowing cold alright so we run the truck to the shop and have them diagnose the problem well shoot whole system needs replaced copy of the estimate $3600 total bill actually comes to $4200 alright no big deal so we've lost the revenue for a day and now we have to shell out another $4200 to fix our A/C now we have just dropped the account down to $7400

2 days later you notice your truck is beginning to cut the new streer tires it has on it alright so you run it to the shop again well now you need spring bushings and hangers there's another $1200 now we just dropped down to $6200

Ok so we're now driving along and we notice our transmission is beginning to leak. alright back to the shop it goes well shoot now we have to reseal the trans. Alright figure $800 but oh wait the back box is shot and needs rebuilt tack on another $600 to the $800 so that bill just ran us another $1400 and we havn't been paid now were down to $4800 in the bank.

See how quickly 20,000 goes down the drain when you're waiting 30 days to get a pay check? Just in a matter of 2 days I shelled out over $3000 to peterbilt for repairs on a transmission cooler and a reseal of the back box. and I have an older truck its amazing how bills add up slowly but surely.

Just becasue one part doesn't cost 20k I can easily see how somebody can shell out 20k quickly. I know a guy not too far from me that shelled out 24k in a matter of 4 days on a truck. It's not out of the question when it comes to trucks. That's why they tell you to have 90 days worth of operating capital before you start out.

 

That's a sobering post about how things can snowball on you when you're on your own,especially if you are under capitalized

 

Yea and as long as I've been doing this I forgot the insurance. So take another $500-1200 for that not to mention a 20% down payment so you can easily drawn an account NEGATIVE in 30 days having 20k in the bank.

Sobering but it's a life many of us have had to live a time or 2. I've been there before I don't plan on going back. Best way I can describe it is like being in quicksand.

You're doing fine and something goes wrong, you get it fixed and run a little harder to make up for it. Then something else goes wrong, and another, and another, until you're finally up to you're neck and can't move. It's not a good feeling or good place to be in.

Even with plenty of cash in the bank and a stack of receivables I worry daily. A motor will cost 20k plus. Transmission is about 6k, if I lose a rear end it's about 7k just for the 3rd members (rockwell) those are the big ones but I've seen trucks nickel and dime a guy before, and I've lived it sadly.

Bringing up this brings up another good point stay the hell away from a factoring company. If you can't train yourself to float fuel money and budget lease on and get a weekly check. I got into a lot of problems when I started due to factoring it was probably the biggest mistake I ever made. Same thing was caused by leasing on. It took me 6 months to beat it into my partners head but I finally got him over this bull of I have to have a fuel card to run my truck. It also took me the same amount of time to get him to realize that just because you turn that key and roll down the road doesn't mean you're making money.

Bottom line in all this useless rambling if you're going to run your truck like a company driver stop forget about owning a truck and be a company driver. If you're going to run that truck like a business you have a shot at making it. It takes time and every business situation is different what works for me may not work for somebody else. It takes time to establish what your business needs these are just some examples and numbers I threw out to show how it can be spent and how it can go to hell in a hand basket in 30 days or less.

 

If you don't pay your insurance in full, but pay monthly, how is that any different than factoring?

 

Tires, clutch, and an inframe can get you past $20k in the blindk of an eye. I drove a 03 international. The headlight went out and it costs over $1200 to fix. It adds up quick. Another truck had a flat tire. Repair guy said it was a $700 between the tire and the service call. If you can do the work yourself and do local work you can do it. Or if you have good paying freight and no mechanical skills. Of course anything can be done in any way which you like but someways are easier. Just ask yourself why people do things the way they're already done. There's usually a good reason for it.

 

That's the one thing I have going for me if I ever went O/O. My dad left me a huge pole barn. I could park four semis in it... With 53' trailers. I, like many other, have a hard time taking the plunge though. If I do become an O/O I want to do it right so I read on here a lot. I have to be local which kills a lot of opportunity's. Would you have any advice as far as what would be good for local work? I was thinking either dump or flatbed for construction companies. I know many many concrete contractors and have been mulling over calling them and seeing if they need any dump work done. I feel I could make it at $100/hr if it's pretty steady for the 8-9 month construction season and then plowing or finding more regular freight in the winters. Hopefully I would do well enough that I could do major maintenance in the winter similar to how farmers operate. I still remember my dad every winter he'd be changing engines in his dump truck or rewiring a bobcat. I know this is long and rambling but I have a skid steer and was wondering if I could use that to find a niche in the trucking industry. I could start a construction company but that's not really my thing. Once I drove my first truck I knew I could never go back to construction work. Anyway thanks for you help.

 

I know right? I looked at the part kit prices while contemplating becoming an O/O. Maybe $10k for the part for an inframe. Add another $5k for replacing anything else you find that's not 100%. So guys are paying over $10k in labor. Insane. I am certain I could do an inframe within two weeks (more likely a few days but you never know). That would be more than worthwhile for the savings. Hell I know an old timer that would come over and help me get it done in two days for a couple of dirty magazine.

 

Never forget:if being a O/O was easy,everybody would be one.

 

I meant freight factoring for invoices if I wasn't clear. And the difference is from what I have seen in the past and I'm sure every company is different the paid in full discount that I was once offered was only 5% or 10%. A non recourse factoring company usually takes 5% plus their card charges etc., recourse I was always charged depending on how long the customer took to pay lowest rate I believe was 3% even at 3% that's a big chunk of change on a $6000 week not to mention their extra fees I didn't care for that. If I had to factor again I'd be in a no contract deal or a 1 month contract only. But as far as that goes it's cheaper to take out a 90 day note or a line of credit that is revolving as opposed to factoring bills.