Buying a Truck, would you buy outright or finance?

Pay cash if you can. I would rather pay income tax than interest with earned money.
Try to get a LOC (line of credit) if needed for the unscheduled expenses. This way you only pay a small amount of interest and you have the comfort of a safety net.
Also helps if you can work on your own truck. At least minor repairs. This helps the truck owner keep an eye on the possible upcoming repairs. A leak or a drip a strange noise, now days you can search the internet and research repairs.
Not always to do the repair but also to have some knowledge when talking to a mechanic your paying to do the work.
Good luck

 

Finance new, pay cash for old

do NOT buy anything 2008-2016, those are cheap for a reason, mainly because they are nothing but problems.

 

If you have the means to pay cash for the truck, have a sizeable repair/fall back fund and a good business plan lined up then there is absolutely no benefit in financing it and paying the bank interest. The truck is still a business write off.

 

Be happy to enlighten you... I purchased commercial insurance on a retail business I had and I always paid them $9,000 up front for the entire year, why? Because they were going to charge me interest to make payments. All that is beside the fact except that I closed my business mid-year... and received my refund for unused time left, a couple months later.
It's not the cancellation that irks them, it's failing to make the payments is what irks them. You can cancel and change insurers, cancel to pause, cancel to close down... it's non of their business why you cancel. Sure, the same company may not want to insure you if you start and stop and start again, but if you paid on time and stayed current, I'll bet you they'll accept your money.
This isn't about the ability to start and stop over and over. It's the sense involved in paying cash vs finance. If you pay cash and have a bottoming of the freight market, you can shut down without losing anything. If you finance the truck, you're stuck with that payment and insurance as well.

I don't and won't beg anyone to take my money for their services, and you don't have to when you pay to the agreed on terms. But if you're a collections nightmare, you'll have to beg or pay through the nose.

It's not like a cell phone contract.

 

Cash so you can afford to sit out the garbage rates that come through sometimes...

 

IMO it depends on the situation. If you’re an experienced owner operater with an established track record and business, financing a new or newer one is less risky since you already know what you’re doing. For a first time truck owner it’s riskier. Paying cash for a good starter truck is what I would do. If somebody can save $20-25k for a good starter truck and have a little money left over for repairs and startup costs, they probably have the money management skills to make it running their own equipment.

 

While I will always agree with cash being king, there are benefits to financing a truck, especially if you have great credit and can crazy low financing rates. It all truly depends on what your end goal is but there is no one size fits all here.

 

I think what we've determined here, is it's 6 of one, half a dozen of the other,,
Apparently, and this goes for many things in trucking, there is no real answer as there are so many variables. I think there are cut and dry situations in trucking, where a cash deal could work, and years ago, like I say, when $20g's was the investment, it wasn't so catastrophic, like today. Again, a sharp accountant,( there's an expense I hadn't planned on, nah, I can do this myself, or so I thought), that's familiar with trucking will probably tell you, something happens, and there's an excellent chance it will, your money is gone. Seems like a loan would be easier to get out of these days, as crazy as that sounds.

 

Of course you save by paying all up front and you will be refunded if you cancel, I do that too, but you still haven't answered my question. You said you bought commercial insurance on a retail business. This isn't that, it's insurance on a commercial truck, tied to your standing with the FMCSA/DOT/authority and thus with brokers. I've never heard anyone say they've gotten away with starting and stopping commercial truck insurance more than once or twice without it being a huge problem keeping their authority.

My equipment is paid for. My insurance is paid yearly lump sum. I'm not asking for advice for me, but trying to make sure bad info isn't floating around for guys like the OP starting out and seeking advice.

Cash vs. finance of the truck has to do with personal situation, which truck/budget and lots of other things. Using 'buying a paid for truck' under the guise that you can cancel insurance and stop running when you want is not true from everything I've heard.

I do agree with you on one thing, I think. Owning your truck (as in paid for) does change your mindset on how you work and when you work. It also changes your mindset on how you negotiate.

 

For anyone else who comes along. This forum is fantasy land. So that means pay cash for the truck, have 25 grand in the bank before starting out, buy an older pre EGR truck because apparently there are tons of them out there in great condition waiting for you to drop out of the sky, etc.

With that said... A person owning their truck outright and having no payment OFTEN not always results in LESS motivation to earn money and to work. Some people need that fire under their #####. If you have no payment staying home another day, another couple days or even another week is way too easy. For some people. Not all. You need two things to be a trucker. No not flip flops and a piss jug. One, you need patience. Severely lacking in drivers today from the shiniest fancy Pete’s to the newest swifties. Second, discipline. Also severely lacking no matter the type of driver today. Experience used to bring with it many positive qualities. Now experience means nothing.

There is also a huge difference between owning the truck with no payments and using someone else’s money having payments but having the extra money in the bank. Dumping all your cash into a truck IMO is stupid. Smart and RICH people play with other people’s money.