Buying first used truck advice

Discussion in 'Ask An Owner Operator' started by Tai'ja Jones, Jan 8, 2021.

  1. Tai'ja Jones

    Tai'ja Jones Bobtail Member

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    Aye im not discouraged or nothing but reading a lot of post and other research it seems like something you might get a hell of a truck by chance and do great or you gone have to stack a lot of money and be ready for a lot of headache to make it Happen right... That's why I'm asking you guys and taking notes!! Lol at things that internet can tell you but only experience, opinions and prospective of people who have done it or been in the game for a while... But if you never jump in then you never know or never learn. I dont have kids so I'm willing to put it all on the line and bet on myself because the worst that can Happen is I go broke (Not in Debt though, just broke lol) and go back to a good paying company and try another avenue
     
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  3. Tai'ja Jones

    Tai'ja Jones Bobtail Member

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    I don't have great credit history, it's not bad at all but I just don't have the numbers for a bank to back me right now. I am working on that though and getting good solid credit lines, secured loans etc plus if I jump out I don't want it to kill my credit but in a bad way this time with a repo on it...

    But I'm listening to you here! I'll do some more research and put more effort into being able to get a loan so I can use it as a option when the time gets closer. What you think about doing places like Loan Mountain and other lease programs. I know they end up being 10k to 20k more expensive then if you just bought the truck outright but you think them programs might be worth it so I sing have to spend almost all my capital
     
  4. macher

    macher Light Load Member

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    I’m not an OO but I ain’t stupid. My rookie advice is DON’T have a truck payment. You must keep your operating costs as low as possible. I talk to truckers all the time at the fuel pump and some have of 1.5 million plus trucks that run great.
     
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  5. Tai'ja Jones

    Tai'ja Jones Bobtail Member

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    That was my thought process and atleast if I jump out then I can recover some of my money back by selling it.
     
  6. macher

    macher Light Load Member

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    I would say if you bought a truck for $10k and dumped $25k into it you would be able to get close to ALL your money back.
     
  7. danny23tx

    danny23tx Road Train Member

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    Not a fan of the older ones .
     
  8. Scooter Jones

    Scooter Jones Road Train Member

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    Here's my story, not that anyone should give a rip.

    I jumped into the owner/lease operator arena in the Spring of 2015. I bought a used 2010 Volvo 630 fleet truck with 400k miles on it. I went to a local bank and secured a 5 year note with 25% down. I was able to secure 5.5% interest. My payments were $611 a month. I leased onto the authority of a company I had worked for as a company driver.

    My intentions were never to keep the truck long term or to remain leased under someone else's authority long term. My plan was to generate enough revenue within a several month period to show the banker I could make money at it, which in turn would allow me to flip the truck and obtain financing for a new truck.

    One thing I noticed right out of the chute was the truck started nickel-and-diming me. It turns out my timing was really good. I was able to flip the truck (within a few mos) on a trade for what I paid for it and was able to purchase a brand new truck (for a good price) during a time when the truck market was turning downward.

    The bank approved me for a new loan at 5.5% again for $1,765 a month. The fuel savings alone made up for a good portion of the monthly payment, not to mention the lifetime savings on maintenance costs alone after 5 years. Anyways, shortly after buying the new truck, I obtained my own authority and launched out on my own.

    I rented a trailer for a couple of mos at $850+ a month and went back to the same bank and showed him the value of buying my own new trailer. He financed it at 5.5% for $476 a month payment. So, between the fuel savings, low maintenance, downtime & savings on the trailer, my new truck payment was pretty much covered.

    In the 5 years since, I paid off the truck & trailer and hold title to both now. I've made a good living on my own terms as an owner operator during this time as well.

    I don't know, maybe I just got lucky? ;-)
     
  9. macher

    macher Light Load Member

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    I haven’t looked into financing a truck through a bank but I’m thinking that might be difficult unless you’re using other equity?
     
  10. macher

    macher Light Load Member

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    Like I said although I have 30 years experience as a driver I’m a rookie in the OO area but I have a good head on my shoulders when it comes to money.

    I would think that after 5 years of trucking one that bought a paid off truck for $10k and dumping $25k into it and having $25k in a maintenance account would be far ahead in revenue and profit vs one that has a $1765 a month truck payment @ 5.5% interest x 5-7 years?

    The catch is maintenance right? I’m pretty confident right now that buying a $10k truck with a Detroit series 60 and having $25k to dump into it initially if need be and $25k in a maintenance account is pretty good. That’s a total of a $65k - $70k investment which includes a maintenance fund.

    Ok some will say you’re going to have down time because of maintenance. Let’s say I find a good trust worthy mechanic and say to him here’s a check for $25k. I’ll get a rebuild and maybe even a bull gear and whatever it else that would prevent downtime due to maintenance.

    What are the chances of down time because of a break down or something?

    But then again I’m talking about a local / short haul operation not OTR.
     
    Last edited: Jan 9, 2021
  11. Scooter Jones

    Scooter Jones Road Train Member

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    If you mean by putting my house up as collateral for equity, no I didn't do that. My initial down payment on the used truck was cash I had in hand. My FICO in the range of 750 at the time probably helped.

    More than anything, along with some greenbacks, having a sensible business plan and being able to confidently articulate that plan to the banker, is critical when attempting to secure financing. Especially commercial financing at a good rate.
     
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