So what happens when owner op doesn’t work out?

Maybe you could, but who wants to buy a loser's truck like that?! I would not...who knows what other liens can turn out to be on it.
I've seen more than one loser like that, plundering all the better parts before turning a truck like that back to a dealer...and they always were convinced that they were in the right to do so....

 

A guy I know bought a spread axle reefer a few years ago from someone who appeared on social media to have their crap together. They put out a good image. After going around and around with the seller he finally went through mutual friends and tracked down where it was financed. The trailer was financed through a small bank in Iowa and when the guy called asking about the title the banker had no idea that the trailer had been sold. It took him a few months but eventually got it sorted out. What’s funny is some of us that know what happened know what the guy is like, but this hiccup didn’t even slow the seller down. He’s still famous on social media and still has banks giving him money for new stuff all the time.

 

It’s no big deal. If Johnny is smart, he’ll finance both through someone like Freightliner credit. Then, when things go south, he simply drives the equipment into the nearest Freightliner dealer, turns in the keys, and walks away. Then, it’ll be time to secure his next opportunity.

 

Doesn't need to be just an oO, I have seen many companies with 10 - 20 trucks go out and sell off all of there equipment to buy all brand new trucks and trailers. All financed to the hilt, then when the work goes quite they can't cover the loans and it's a slippery slope.

Having a truck paid off and no finance is the key in this business, it's the number one thing, even before having work.

A parked up paid off truck costs next to nothing, so u can always get a different job if work goes bad..

 

Hmm, might you be "Johnny?" Yeah, been a while, hopefully the people I pixxed off have moved on, to my friends, all 3 of them, , hope all is well. I'm here because I'm bored, and like to check in, you know, to see what's what. I see not much has changed, still a mess.
To "Johnny", what do you want to do? Right now, in my area many company jobs are here, most starting at $28-$30/hr. Can't find drivers. A nightly mail run to Denver, a daily water load out of Buena Vista, paying well, no takers. I couldn't imagine a worse place to be right now, than an O/O, HOWEVER,,,since you went this far, fix the dang truck, put it on credit, and get truckin'! I know, the anxiety of that scenario all too well, nobody wants a truck that is need of repair, and does you no good broke, so you're stuck.I think there's a lesson to be learned here, you can bail on the whole mess, and ruin your credit FOR LIFE, or get back on your horse. Bailing out, I think will haunt you and even a company job may look down on that. Fix the truck.

 

Then you go bankrupt and go back to working as a company driver.

 

Your plan needs an exit strategy to prevent total ruin. There has to be a line in the sand you won't cross and the the first mistake here was financing a bunch of equipment with no ####ing idea what to do with it. Pay cash then figure it out. It's not for nothing people say to make a small fortune in trucking start with a big one. What do you think you offer that anyone else out here can't match cause there's lots of people with trucks?

 

.... if you're in business. Its pretty easy to go in debt. If Johnny isnt a sissy quitter. He's gonna build some debt, but he should have 6 months of nest egg built up which "could potentially" put a big dent into the breakdown cost. And for the most part it doesn't take that long for a truck to pay down a inframe. What hurts is many hits at once aka ... big planned maintenance (aka tires), multiple significant breakdowns, big tow bills if you do not have towing insurance, long down time, and slow or no pay from receivables.

Also six into being a business owner I had 2 cards with 50k limits, a up to 499k commercial line of credit at Chase and nearly unlimited line with Amex Kabbage. Super easy to go deeeeeeeeep into debt ... if you have credit and cash flow. 6 years in, I do not pay annually for lines of credit safety nets I do not need. FYI interest on commercial debt is just another line item to rite off, and just another business expense.

I call being an owner operator "buying myself a job" ... I could easily go work for someone with lesser but different headaches, no liability, and nearly the same freedom, for probably more money in my pocket at the end of the year. But, what fun would that be?

If you have a head on your shoulders .... the only thing that will take you out as a single truck owner op, is injury or sickness. Multiple truck ... 1 bad employee can really eff you up.

 

Hi rollin, "exit strategy", got quite a chuckle out of that. People today don't have "exit strategies", they simply fail and deal with the consequences, if any. I bought my 1st truck in '88 for $22gs, a far cry from today, that will cost 10 times that. Even in the 80s, bailing on $22 grand wasn't the end of the world, today bailing on hundreds of thousands has much different ramifications, none of which someone starting cold quarter may even think about. It's the same old thing, trucking, pfft, how hard could it be? When you and I started, there were LOTS of O/Os, and our experience was our guide. Today, I just don't think it's the same.