POSSIBLE RECESSION and starting as and Owner Operator?

Why would you buy a new truck, fully depreciate it, then sell it the next year? That makes no sense.

179 deduction has been key to growing my business. Buying 250k of equipment in one year and having to pay taxes on 250k would have meant I couldn’t buy the equipment in the first place. Being able to take enough depreciation to get into the lowest tax bracket while keeping as much depreciation for the following year as possible makes it all possible. Waiting until December to find this out was ridiculous. So glad we now can count on what the law is going to be.

 

You over look a lot of things. No one is giving a new driver a loan on a truck. Added to this the new driver needs a CDL..Even if you get a truck and CDL with zero experance no one willl lease that truck onto their fleet because of insurance..

Prime's lease solved both of those issues for me.. I needed a CDL and wasnt going to work for $800-$1,200/week like a 1st year company driver is going to make...

Instead, I went to Prime got my CDL and actually got paid for busting my ### instead of driving for $800-$1,200 like 90% of company drivers out there...

You guys seem to think you know it all about leases yet you miss the most obvious.. New drivers dont start out with experance that can get them high pay elsewhere. I made a hell of a lot more in my lease truck than I would have made anywhere else as a company driver..I put zero money out of my pocket to do this..

I made $2,1k last week, I made $2,3k the week before that I made $950 and the week before that I made $2,7k the week before that..Yes I've made $8k this month as a lease guy and I'll get another $2+k this week.. meaning I will pocket $10k this month before taxes..

That's money hitting my bank account each week.. Now you tell me where I'd do better than that anywhere as a driver with a bit over a years experance with zero money out of my pocket to buy anything. You guys can keep telling me I'm getting used or its a bad deal, blahh, blahh blahh and I'll keep laughing at you as I get my next deposit..

Please post links of companies I can go make $10k/month as a new driver getting paid by the mile..I will be waiting for this long list of companies.. /s

Can I make more if I had my own truck? of course.. yet I don't have my own truck "yet" so this is 100 times better than working for .50/mile...

Again.. please tell me how I made a bad business decision and how I could make more money than I'm making a driver for 1 year and a few months with no money out of my pocket..

I'm not here trying to say I know everything but you guys certainly dont know as much as you guys think you know about leases.. I cant speak of leases elsewhere but I can #### sure back up my talk with proof as I just attached..

 

Uhhhh, no, I'm afraid you are wrong. Very, very, very wrong.

For two reasons.

One, section 179 deductions take any or all deduction the year you put the asset into service. Not 80%, all of it.

See: Section 179

Second, yes, you have to recapture depreciation upon the sale of the asset. The revenue then becomes INCOME, not capital gains, and is taxed at your income tax rate (most definitely NOT the lower capital gains rate).

See: Depreciation Recapture

 

I'm in the same boat as you, deciding now if it's the right time to buy my 1st truck going into a potential recession?

The question can only be answered by yourself because no one knows your personal situation..

Do you have a lot of debt? Are you buying a truck with cash or a loan? How much will your payment be? What happens if the motor goes bad or you blow a tire, can you afford that?

For myself, I have no debt, good credit, savings and a line of credit business & personal. My monthly expenses are very low.

With these things in mind I will buy a truck sometime in the next few months. My target price is a truck in the $30k range and I'll most likely finance $20-25k. I can afford to buy with cash at that price but I'd rather not spend my cash.

At that amount I can't see much problems paying for the truck and making money with it even if we get hit in a recession. Worst case scenario if everything goes wrong I can park the truck go back to where I work now and still be ok.

For myself its a no brainer.. but you have to be honest with yourself as far as how much debt you have and how much money you will need to make each week/month to survive. If you are on the edge of being out of money each month now, then no its a bad idea and don't do it until you cut your expenses.

 

The rate will never get any better until the Brother, sister, and 2 cousins realize they suck at it and go home.. You know how many trucks I've passed on the highway or at the truck stop that look like somebody pieced it together with glue... a lot.. There is no driver shortage... there is a shortage of guys that actually know what their doing... There is also a problem of "I'll do it for less" and that too is what hurts the rate...

 

@crocky just curious how much a mile are you making?

 

I'm lease not paid by the mile, I get paid a precentage of the load pay so it's diffent each load as for the money per mile. For the record I run pretty hard to make that, I'm not a guy who sits around the nice pretty Springfield terminal and knows everyone by name.. (although I am sitting at the terminal right now...lol but it's 1st tine Ive been at a terminal in 3 months)

Ie dont just expect to go there and make $2-3k week.. There are guys that do it and guys that make more, but a lot make less as well. The abilty to do it is there but you have to be capable.

 

That will never happen and its the same in every industry. There is always someone who will do it cheaper. All you should be worried about, is how much money you need to make for it to be worth your time. That money amount is diffrent for everyone..

 

So what would be an average per mile? Any idea?

 

The cost to run my truck is .70 cpm... so I mean technically if I pull a $1 per mile load then I've made money, may not be much but its still something...

 

My current truck is a 4 month lease. I turn it in next week. As of my last settlement Ive made $76.5k gross to that truck in the 4 months I've had it. My gross per mile is $1.97

My previous truck I had a gross of $120.4k to it and was at $1.89/mile gross to the truck.

I was injured and had to turn in my 1st truck, was out for 2 months so after 30 days I was auto terminated and had to be rehired, hence 2 trucks.

Keep in mind I pay a ####load for the lease trucks so not like I pocket all that hence the reason these guys are crying about leases being bad.. What they don't look at is I do keep a pretty decent amount.. Sure I'd keep more if I had my own truck but I'm not at that stage yet.

Now what I will say, is I don't get too caught up in money per mile or precentage per load. I look at weekly earnings. I'm not hung up on needing to make X per mile to move what I look at for myself is income per day. $3/mile isn't worth #### if you only drive 300 miles and sit on the load for 2.5 days. I look more at things like our week starts on Tues. I want to have a minimum of $2k to my truck by Friday. If I hit $2k by Friday then I know I will be $4-5k by Tues. That's sort of my rule of thumb as I know what I need to make to cover my expenses each week and that usually around $2-2.5k (truck/fuel ect) Meaning I want my expenses covered by Fri/Sat and the rest of the week is my pay..