how long should I wait to be owner operator?

Start now by running your truck as if you were owner op and see how you do. Keep track of all the fuel costs, repair costs, tolls, scales etc... Once a week deduct $1000 for your truck payment and insurance. Pretend pay yourself about $.90 a mile (keep in mind if you are leasing from a company it will most likely be more around $.85 a mile) Make sure you write everything down and keep track of all your expenses to the "T". Also figure on buying tires once a year at about $6000. Don't forget what's leftover isn't take home, you need to pay taxes! See how you do! Good luck!

 

I would give Chompi's exercise a trial in all 4 seasons. If you cannot lay away %20 of your income into a savings account AFTER everything is paid, it is not worth it. You would be better off driving for a company with a generous 401-k plan.

 

How can a company driver possibly know fuel and repair costs, etc., not to mention what his/her/their company pays for the truck in the first place? A full set of tires every year? Nah, steers maybe, but $6K is high (600 bucks a tire?) and so is $1k each week for payment+insurance. Good point, though about that .90/.85 gross and taxes (state and federal, unless you live in a no-income-tax state), and don't forget federal self-employment tax.

 

Figuring out the fuel cost is pretty straight forward. Number of gallons x price per gallon. I haven't driven OTR in a while, but don't the pumps still show gallons pumped and price?

Repair costs might be a little harder to calculate if the work is done by the company shop, but all a driver has to do is call any non-company shop and ask about what it would cost to have something fixed. It might be a rough estimate, but should still be in the ball park.

What the company is paying for the truck is irrelevant. The driver won't be using a company truck, he'll be driving his own and it isn't all that hard to figure out what the payments are on any particular loan. Same goes for insurance. Call and ask for quotes form various insurance companies and you can come up with ann average.

 

Street price isn't what carriers actually pay for fuel. There are complex discounting agreements. A company driver has no way of knowing what his carrier's net cost per gallon is.

Repair pricing. A company's costs at its own shops will always be less than dealer or repair shop prices. That's why carriers have their own shops--so they don't have to pay retail.

What a company is paying for the truck isn't irrelevant--the company's bean counters don't ignore it. The OP is or will be a company driver. He's asking about what it will be like to be an owner-operator. He'll be in a company truck. If he goes to a truck dealer, he'll see sticker prices; he won't know what the same truck would cost a carrier if it buys a lot of them. If there's a manufacturer's buy-back program, the carrier will pay less than you'd think to use the truck for 3 or 4 years. Some of those agreements allow a carrier to turn in a truck and get 55% or more back from the manufacturer.

To take it further, buy-back agreements and discounts for fuel (and other things) aren't disclosed to owner operators or lease operators. Ask, say, a Swift lease operator: what is the net cost of the truck to Interstate Leasing/Swift?; what are the fuel discounts Swift enjoys when lease operators buy fuel at truck stops or at company terminals?; what does Swift pay for a tire or a gallon of fuel or parts or whatever?.

But, sure, if a guy drives his own truck then he'd better know what he's paying. If not,

 

Why wouldn't he just figure it out without any discounts because I mean I am just thinking here but WHAT IF he is planning on buying his own truck and being under his own authority. That means he will be paying the pump priuce for fuel, the straight up price for a tire no discounts, and everything else is the real cost not the discounted price. Now if he does that and is still doing all of his deductions and is making more then he would if he was a company driver then it would be very much so worth it if he was leased onto a carrier that he would get any discount at. If I am not getting everything here point it out to me. I mean what if he is a company driver for a bottom feeder like JB or swift or USX or any of them. They take the low rates for freight and then he buys his own and goes to somebody like LS or Mercer or one of the companies where you can actually pick your freight and your pulling for much higher rates and gets discounts on everything. He would probably do pretty good then

 

I agree with you.

 

I think you and I are viewing this from slightly different angles.

I got the impression that the OP was considering becoming an O/O with his own truck.

If he does go out and gets his own equipment and is paying for his own fuel, would it matter what discounts any major carriers get for fuel? I suppose if he contracts out to one of the major carriers he might get their discount rate. But again, I am basing my comments on a person with their own truck, running under their own authority.

I agree with you concerning the cost of repairs. The reason companies have their own repair shops is that it is less expensive for them to do so. But an O/O will largely not have access to a company shop and will pay a higher amount for repairs. Thus my suggestion of calling various repair shops and asking about the cost of repairs. A company driver with any time under his belt should already have some idea of what sort of things have broken on his truck and that of his fellow company drivers.

It would be a way to get a rough estimate for planning purposes.

Same applies to insurance. Most of the large carriers self-insure IIRC. An O/O will have to pay the open market rate. So calling around and getting quotes is a way to get a rough estimate on that cost.

Why would an O/O be in a company truck unless he was foolish enough to enter into "lease" agreement with one of the bottom feeders?

If he goes out to a dealer and buys his own truck, it matters not what a carrier would pay for that same vehicle.

I am sure that the various rental car companies can go out and buy a bunch of Honda Accords for less than I would pay for the same vehicle, but it's an apples and oranges comparison.

Obviously there are a ton of other things that we haven't touched upon yet. But it's a good start for the OP to start pondering.

 

Sure he could do better. Could do worse too! I just simply gave him an easy formula to follow. How do you not know what fuel cost? It's right there on the pump in front of you. You don't need to figure your costs to the penny, a general estimate will give you a ballpark of what you can make as an O/O. Figure on 7-8 miles a gallon. Also $1000 a week is a pretty good estimate as to what your truck payment, insurance and all your permits are going to cost you. Most companies also charge you for the qualcomm too. So like I said $1000 a week plus fuel, repairs, maintenance, tolls, scales, truck washes. Also figure about $100 a month for a business accountant (like ATBS). There are also some variables like health insurance, tickets, hotels, food, rental cars etc... Also another helpful tip you can add to this equation is that 1800 miles a week is roughly your break even point as far as your truck payment and permits and such. There are also a lot of things you can practice to cut down on some of these costs. One big thing is try not to buy anything at truckstops except for fuel! Try to buy your food, drinks and supplies at WallyWorld for the week. If you are a smoker, quit! Also try not to spend money on DVD's. This is a huge expense for drivers in which they do not realize the amount it adds up to yearly. Eating healthy will cut down on food bills and health insurance. Refine your driving. Driving slow will really cut down on fuel, tires and wear and tear on the truck. Don't run your rpm's up. This will cut down on fuel, tranny wear, tires and again wear and tear on the truck. When running your rpm up and shifting it really puts a lot of unnecessary strain on the entire rig. Bang through as many gears as possible without bogging. Bogging will also cause strain. Preventive maintenance is a very big issue. Dry turns burn up tires and also strain the rig. Getting lost can add up when it comes to fuel along with idling. Anyway you get the point, there are a lot of things you need to be aware of that will now come out of your pocket instead of blindly being covered by the company. Any good businessman knows that every single penny counts because the all add up! You also need a good fuel plan for yourself. A company fuel route may not be compatible with your needs. One big thing is hometime. You now have to pay for the truck while it sits in the yard. Also hometime messes up your pay for two weeks. You slow down coming home, no pay while you are at home, and sometimes it's slow getting back out. You throw off your day to day rhythm. Make sure to have a little nest egg in the bank if you do decide to go O/O. An unlucky series of breakdowns right off the bat can bury you in bills and advances. Good luck to you hope this helps.