Some numbers for new O/O

Than just pissing monei

You never work on your truck? Take it to a mechanic for everything?

 

Oh, if I need to change a bulb or something like that I will do it. But that's hardly "turning a wrench".

Last thing I want to do is work on my truck when I get home, not even change the oil & filters. That's just me, others mileage may vary. That's why I budget a certain % of my revenue for maintenance and future replacement. One size does not fit all.

 

Quoting this for emphasis, not to pick on you. There was one more thing I was just having trouble getting at last night and had to sleep on it I guess.

It's easy to throw out a monthly payment as a statement of value. Which it is of course. The problem, and I'm sometimes guilty of it too, is drawing a line between that cost versus revenue. For example, thinking I can run one extra load and cover that $2,500 payment. But that's not entirely true. A new expense should be figured against profit not revenue.

So considering that, and maybe a generous number for profit like 25%, you'd need to produce $10,000 revenue to cover that payment, not just the amount of the payment, in order to keep the bottom line the same.

I get that there's offsets when considering new in exchange for old. I'm not arguing that. @KB3MMX is an example. What's for sure is a payment will be due every month no matter what. A used truck may require major repairs now and then, but not always. And the fixed costs of parking the used truck for any reason are substantially lower.

 

In retrospect, I know that I personally made the right move buying new and getting very aggressive to dump that used truck I bought initially.

I most likely would have failed if I hadn't done so. I agree with the perspective that a lot of guys have that IF one buys used, you better be able to work on your truck and be able to withstand the hit financially from the lack of revenue because of downtime and costs of repairs.

On the flip side, the individual who buys new needs to be reasonably confident they can make that payment month after month until they can build enough reserves to withstand the potential repair within that 5 year period too.

I still haven't made a concrete decision what I will do when my truck is fully depreciated in a couple of years. I may keep it and see how much life I can get out it. Once it starts to cross the line financially, I'll dump it and do it all over again with a new truck, that is if the good Lord is willin' and the creek don't rise

 

First thing you're not in business to park.

Not picking on anyone but there's guys with that mentality that often doomed fail....unless you're retired and collecting retirement, only trucking as a hobby business.

The truck needs to work and it needs to be consistent... Day in, day out.
If it's not, your business becomes unstable.

The payment is obviously made along with ALL your other expenses... Not sure why i should need to point that out.

Gross income minus expenses = Net Profit.


Anyway....

Just a nitpick ; Payments aren't "Value" to any business, it's considered financial *Liabilities* as other Expenses, costs of operations. Managing those costs correctly, balanced against revenue will make you successful.

One thing to keep in mind, if you aren't making enough to cover your fixed overhead in the FIRST week, you should be looking at the business trying to figure out how to improve it.

Also remember that profit margin is AFTER expenses, not before..

Sounds like you had one used truck so far that has done really well BUT that's not a reliable business model at all. Taking 3 years to pay off a $40k truck *isn't* doing good.
*Seriously*

I asked about your experience(or not) with a brand new truck for a reason... I see you did learn the used equipment lesson with the reefer trailers though.

Yes, totally agree that is a Disaster waiting to happen running a old refrigeration unit and the other nonsense that comes with it. A broke down reefer can easily put someone out of business with big cargo claims and dropped or unaffordable insurance. That's a gamble with used that's even worse than a truck but a mile.

If your rates are good and you're working consistently, a new truck payment should be covered in about 2-3 days, insurance, maintenance, etc by the end of the first week. (After fuel).

If work or rates isn't there.. then the conversation should turn to improving them and you will find your business cashflow will improve dramatically.

Did i read it right that you've had the "good" truck for 6 years, putting less than 600k miles on it and $2k/yr maintenance?

I'm sorry..., I'm just calling a BIG... Huge trucking BS flag on those #s my friend.

$2k a year .. come on. My oil PMs are over half of that #. Even cheap Chinese tires over 600k would be $5k +/- alone.

 

I'm not saying buying new is a bad idea for everyone. What I'm saying is buying new trucks is not for me. Right now. Maybe that will change. Maybe not. I've simply stated why I'm doing what I'm doing.

You can nitpick my posts all day long to justify your case, but your missing my point. I didn't put it out there to say I'm doing better than you. It's there to say here's why what I'm doing is working for me. If you look, you'll see the $2k number was just for unexpected major repairs that aren't a PM or brakes or tires that everyone pays no matter what truck you use.

The two Freightliners that were my first trucks killed me on repairs like that. $5k a piece on exhaust/egr related problems, and a $15k inframe on one that lasted 2 yrs, due to some bad advice and pursuing a deal that in hindsight was just dumb. But I did it, took my licks, and grew from it.

In contrast, I've spent a LOT less on the KW and Pete I have now, given all other routine things being about equal. Had I made better choices in the first place with the experience I didn't have, I could be $25k ahead in the above example. But I didn't and I'm not.

For some reason you seem to have a lot of contempt for people that make it work with less. Maybe you're still mad about the one that almost did you in? I get it. We all have different priorities and ideas on what we want to get out of this business.

Which takes me to this idea you have to run your butt off to be a success. Maybe you do, and that's fine if it suits you. Me? I'm not that driven and I don't have to prove anything to anyone by working 24x7. You know what you get when you work that hard? "He was a hard worker" inscribed on your headstone.

 

GASP!!!

 

OMG I don't wrench on my truck, so now I have to sell Casper and go back to being a company driver?

Well this sucks.

Can you gus recommend someone that will allow me to take Kitty?

 

Thanks for the info but this statement right here is asinine. lol. Not willing to work on a semi truck does not equate to me not being hungry. that sounds ludicrous. Im not a mechanic, Im not doing mechanic work period. Thats some who knows their limitations.

 

That’s funny.... I think of working on my own equipment as Advantage not as a limitation.

I know what I spend and where. Yes, I could have made payments on a new truck as opposed to working on my old jalopy. Still wouldn’t cover the extra insurance costs or maintenance that’s required on new trucks too. Heck one of our company trucks needed a complete engine at 360k miles. Only took them 8 weeks to fix it?

I put an engine in mine myself in less than 14 days including painting the chassis and other parts.

Even though Cummins covered the “motor” at 360k miles our out of pocket expenses were identical.

Mine was only 2 weeks..... his was 8 weeks. Both just over $20k.