All my vocational life I was an independent contractor of some sort, primarily in the construction trades. I was wiped out in the Fall of 2008 as a building contractor. Almost lost my own home, and marriage I might add.
When life serves you lemons, you gotta make lemonade...
I applied for and received a $5,000 local employment assistance agency grant to attend a truck driving school hosted by our hometown community college.
Went through 4 weeks of school, got my cdl, hired on with May Trucking and hit the road. I'm not going to lie, it was hard being away from home and the pay wasn't really that great. Although, I made do with what I made.
I put in my time, started supplementing my income by training and things slowly began to stabilize. I eventually was a able to land a job with a regional company running the I-5 corridor which afforded me with at least three days at or by the house during the week.
The same company invited me to work in the office on the management team. It was a real learning experience for me dispatching, load building, customer service, compliance and maintenance coordination.
However, after more than a year in that capacity, I decided that working in an office environment just wasn't my cup of tea and got back into a truck with the same company.
This time I signed on as a lease operator. The lease was a 100% walk away lease, so, I knew exactly what I was getting into.
The payment was $2,350 a month for the new truck. There were no present or future ownership rights in the truck. It was essentially a glorified rental truck. That's the way I wanted it until I could decide if this was something I was going to pursue.
I was confident I could make money as a lease or owner operator and utilized the opportunity that the walk away lease afforded me. This company has a really fair lease/owner operator program.
I set myself up as an LLC filing as an S Corp, hired a CPA, put myself and my wife on payroll and away I went. My LLC contributes to a SEP IRA and health insurance. I live within my means, pay my taxes religiously on time and set aside $$$ for maintenance.
In June I decided I was ready to buy my own truck. After considering an offer from the company owner to purchase a new 2016 truck through him, I decided to see if I could buy my own truck. The total (with interest) price tag of $176,000 and $2,750 a month truck payments was just too much for me to swallow.
Therefore, I headed down to the local community bank and talked eye to eye with the V.P. of business loans. I told him I wanted to buy a $50,000 truck and I would put down 25%. Let's just say the first meeting didn't look too promising.
These bankers are not too keen on making loans to small business guys that don't even have one year of sole proprietorship in the trucking industry under their belt. Not to mention, a business bankruptcy from 6 years prior.
I jumped through every hoop and over obstacle he put in front of me and after week he approved me for a 5.5% loan, almost unheard of these days for a used piece of equipment.
I found a nice 2010 truck in the midwest and negotiated a purchase of $42,500 and bought it. My payments are $611 a month which are reasonable. I made sure I had several thousand dollars set aside for any maintenance costs initially and I am setting aside $1,500 a month into a maintenance escrow account.
I'm a realist. Trucks break down. I will have to fix things. However, when I considered that a new truck would cost me $33,000 a year in principal and interest and my current truck is costing me $7,332 a year principal and interest, it just made more sense for me to go this way.
My plan is to pay off the truck and utilize the current 2 year "bonus depreciation" tax write off and depreciate the truck in 2 years instead of 5. Take good care of it and maybe trade up in a couple of years. Who knows, it's one of those, "the best laid plans of mice and men" things.
One thing I do know for sure is that I love truck driving and at 58 years old will most likely end my vocational career doing it.
That's my story and I'm sticking to it
May Trucking & my path to becoming an O/O
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More to the story? Sort of. I've since obtained my own authority, bought a new truck and trailer and launched out on my own in January.
In reality, I envisioned this on my very first solo trip at May Trucking over 7 and a half years ago. Took me 7 years to get here, however, I couldn't be happier with the process.
I bought a used 2010 Volvo in April of last year. I bought it right and only intended to use it as a stepping stone to get my self established with a local bank.
I did just that and leveraged it as trade bait for a new Volvo 670 in December right before the truck hit 500k miles.
The bank gave me a very favorable interest rate on it as well. Therefore, my payments are considerably lower than what guys pay on a typical lease through another trucking company or financing source. Plus, I will own the truck outright in 5 years as opposed to having some kind of ballon payment.
Everyone has to weigh what works best for them. I can tell you though, that I was getting uneasy with the mileage on the 2010 and the little repairs, check engine lights, etc.
There's a point where that stuff starts to nickel & dime you death. At least I have an extended 5 year warranty on the new truck and it provides me with some peace of mind. Not too mention, the new truck has an I-Shift, double bunks and a few more amenties than the used truck had.
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