Buying a truck

Discussion in 'Ask An Owner Operator' started by Kidd05, Jan 23, 2021.

  1. Kidd05

    Kidd05 Light Load Member

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    If I was to buy a truck, say a 1-2 year old truck. Would it benefit me to pay cash for it or put a good sizable down payment down and finance the rest? Asked a few Owner Operator's already but getting different stories about the tax advantages of financing part versus paying for truck outright. Any information will be much appreciated.
     
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  3. Swift09

    Swift09 Light Load Member

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    I've never had enough to pay cash on something big. When I think of what trucking is though, why not use someone else's money? You probably can utilize that amount of money for higher ROI than a truck. Just my opinion.
     
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  4. 77fib77

    77fib77 Road Train Member

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    Either way you depreciate it. You can write off the interest charges and finance charges. I think of it in borrowing costs. If you borrow 100k at 9%. Over 4 years. 18k in interest. Is that what you want? The best for your model . It allows you to keep cash on hand. If you have that much cash on hand, it's really up to you.
     
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  5. Happily Retired

    Happily Retired Road Train Member

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    A few days ago, Oscar the KW blew me a new corn chute, saying I didn't know what I was talking about with a post on a similar subject. He's right, I don't know about truck ownership, and had no business buying one. But that didn't stop me, there was so much I didn't know, and I hear a lot of the same questions today I encountered. Thing was, in 1988, I was only in it for $20 grand, not a HUNDRED 20 grand, like today. If you go 1-2 years old, you may as well just buy a new one. My big goal was to pay the truck off, easy street then,,,or so I thought. Mr. KW can correct me, ( rather than make me feel stupid) without a truck payment, I got slammed with taxes, switching accountants helped, but to make it, I should have bought a newer truck, not another older one, like I did but in the end, I decided, it was just better to drive the bosses. Insurance too, out of control, and if you want to feed into that ins. BS, by all means, buy your own truck. Buying the truck proper was the easy part, but like 1/10th of the deal. And what if something happens, you paid all that cash, and it's gone. Not sure it's the best place for your money today. Buy classic cars,,,just not trucking.
     
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  6. Rickp

    Rickp Medium Load Member

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    I prefer to hold on to cash because there are always other expenses that need it. I dont put more down on anything than it takes to get to a reasonable payment unless the total cost is small compared to my bank account.
     
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  7. Oscar the KW

    Oscar the KW No Filter

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    Paying cash is always the better option as long as you have cash on hand to cover any expenses that may come along.

    Paying cash or financing makes no difference tax wise. You will depreciate the equipment either way. If you lease a truck, (much like leasing a car) depending on how the lease is written you can either write off the lease payments or section 179 it and write it off the same as a purchase.
     
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  8. Oscar the KW

    Oscar the KW No Filter

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    I went back and looked at the post you are referring to, it is not written or intended to make you feel stupid.
     
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  9. abyliks

    abyliks Heavy Load Member

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    Pay cash for old, finance new

    I paid cash for my 97 then took a small loan out for my wagon for 2 years, I hate payments, also if work slows down it costs nothing to let it sit, payment is due every month whether it works or not

    There is always something you can put back In to lower your taxes if you don’t want to pay a lot whether you own it out right or not
     
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  10. Kidd05

    Kidd05 Light Load Member

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    Yeah, have the money to pay cash for the truck and have enough left over for pretty much any kind of repairs for a couple of years. Are as you said if the economy takes a nose dive, let it set till freight picks back up.
     
  11. Kidd05

    Kidd05 Light Load Member

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    Thanks for the information. Haven't looked into doing a lease from anyone. An wasn't sure about the taxes being the same if you buy it out right or finance it. I think I have the expenses covered for at a year or two with buying just one the one truck. Will keep doing my research though, gonna wait a bit probably another 4-6 months an see what the economy does with this new administration.
     
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