Finance vs paying cash?

Discussion in 'Ask An Owner Operator' started by magellan, Feb 17, 2016.

  1. Terry270

    Terry270 Road Train Member

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    Save up enough that you can buy a pre egr truck and still have at least 10k in the bank. Also another 10-20k available credit on rewards credit cards.

    Most importantly hold off on this right now. We are most likely heading into another recession so I would wait it out. In a few months I have a feeling there will be a ton of great deals on trucks. Buy one and get it ready for when the economy jumps back and you will be in a great position to make money.
     
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  3. rickybobby

    rickybobby Road Train Member

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    What date is the recession going to start?
     
  4. Terry270

    Terry270 Road Train Member

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    For some its already started. People who work only off the loadboards for instance
     
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  5. Eddiec

    Eddiec Road Train Member

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    I would talk to a CPA who specializes in trucking and a financial advisor. You worked hard for your cash...spend the few extra dollars and get a professionals opinion.
     
  6. rickybobby

    rickybobby Road Train Member

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    I wouldn't call that a recession. People who worked the load board, are mostly new to the industry. If you been in the Busines for a while you should have made contacts.
     
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  7. Not_Here_Long

    Not_Here_Long Medium Load Member

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    All loads basically come from a load board of sorts.
    Whether it's a blast email or a phone call of just looking up online at the load board.
    Shippers, brokers and forwarders all know the market and pay about the same.
    It just depends on how many hands are taking a cut before the money gets to the carrier.
    And you'd think getting it shipper direct would net you more money ?
    Some of the shippers I deal with try and low ball direct carriers I've caught one in particular more than once.
    Sometimes a loadboard load will pay more than shipper direct, done seen it many times before.
    So your statement is meaningless used by those who want to toss out the illusion there is better paying loads somewhere. Very few good paying loads now. 1.50-1.65 is the new 3.00 @ mile looks like.
    There will be lots of O/O working for almost nothing or doing something else while they wait for rates to rise.
    So I'd think long and hard before investing much in an industry that pays the ones who make less than everyone else.
     
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  8. Ridgeline

    Ridgeline Road Train Member

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    OK here are a couple suggestions.

    first off you don't have enough money. thinking that you want to get a cheap truck and then put some extras into it, it may drain your future revenue quicker than you think.

    I would finance for a $35 or $40k truck (with $10k down), ditch the idea of a cheap truck. figure that you will put in the same amount of money on some repairs (brakes, etc. ...) at any price but the $20k truck you may end up paying for an in-frame or a new trans. DO your due diligence with any truck, spend the money and take the time to look around, there are more trucks chasing owners than owners chasing trucks.

    Why finance?

    Well first to build credit, second is it allows you to have $10k in reserve. If you finance for $40k and you found a truck for $35, then that's an extra $5k you have in the bank.

    the other thing is interest rates are low, so that means that your payment won't be bad.
     
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  9. Lyle H

    Lyle H Road Train Member

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    If you have the cash, what rate is the investment its in paying now?

    If that rate is higher than the finance rate leave it there and borrow the money.

    It all depends on your risk tolerance.
     
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  10. Terry270

    Terry270 Road Train Member

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    My statement is accurate. I've already witnessed it firsthand locally, the companies that were newer and working primarily off the load board are shutting the doors or really hurting and the older more established companies still have the work. As far as what they are getting paid who knows but they have the contracts anyway
     
  11. Not_Here_Long

    Not_Here_Long Medium Load Member

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    Contracts pay less and the larger older carriers are driving down prices.
     
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