Question For O/Os regarding expenses

What you mentionabout the inframe is why I explored the idea of getting a newer truck and front loading costs into payments and a warranty. When you purchase a truck for $25000 and face the high probability of spending 60% or more of the value of you purchase price on a repair you have to think about if its worth it. What if I just spent $15000 or 20000 more on a newer truck. Would the initial higher cost allow me more time through depreciation and not being out of service with repairs to earn the money to make up the difference and be ahead faster?
So if I spend money on a great dog and he gets sick I take him to the vet and spend more money to get him well but if I buy a hamster .....well either the hamster gets well on its own or it dies. My hamster does not get a visit to the vet...lol Thats a terrible analogy

 

So this leads me to my next point. I dont know what you paid for your truck but I broke out the calculator and added up expenses and I get $7762.00 in repairs. So if you bought the truck for somewhere in the $25000 range thats around 32% of your purchase price. My point being if cheaper trucks cost this much in repairs regularly then you are essentially re buying the truck over and over again. This is where the business model gets confusing to me. Maybe confusing is the wrong word but its a tough question to answer because in order to strat this business you want to keep overhead low. But in order to do that you are most likely to buy a truck that has a low initial price but may cause your expenses on the repair side to sky rocket.

If I were starting a manufacturing company Id need a building to work in but I probably wouldnt buy a building that was going to cost me 30-50% of my capital expenditure just to maintain the property. In trucking the deck is stacked against an O/O either way.. spend a lot on a truck or spend a lot on repairs. So here is the next question...... Is there any business model that uses the expense of a new truck or close to new truck to offset the high repair costs of older model high mile trucks?
If I had to take a survey Id say that so far 100% of O/Os purchase a used truck to start their busness' and 0% go with a new truck. Is that a fair assesment?
And by O/Os I mean the little guy running 1 truck maybe 2.

 

Im in agreement.. but when you look at it all the repair costs other have encountered it seem like you re purchase the truck over and over again. Maybe there is some one out there that has bought new and can list some numbers. Just from an accounting stand point it seems logical but reality is a different animal. From wht Ive found out so far the issue is in the freight rates. New trucks are just so expensive you cant get rate to justify the cost.

 

I am in agreement with you. Ive been searching and I can not foind a single example of an O/O buying new to start a company. Im guessing that an O/O might buy new if they were well established and had contracts in place to haul a certain amount of frieght and could justify the cost. Clearly it wouldnt work as a new O/O.

The question came to mind because of the extremely high cost of maintenance and repairs. My orginal thought was if I buy a truck for 25k and in year 1 put in 15k in repairs maybe it would be better to spend more and get a truck with less years and less miles. I know that a major repair can come up on any truck but since its all a gamble the odds would be best with the new truck. Even if that major repair was deferred to year 2 those extra miles in year 1 would increase your overall chances of success. Year 1 in this business is so important it seems. You have to survive that first year and maybe the impact of a major repair is lessend after paying all of year 1 bills...

That was the thought process behind newer truck vs older truck