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Some numbers for new O/O

Discussion in 'Ask An Owner Operator' started by DUNE-T, Aug 23, 2018.

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Rideandrepair Road Train Member

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Scooter Jones said: ↑

I guess I've been lucky thus far with my new Volvo purchase in December 2015.

I've only had 2 issues in 295,000 miles, both covered by Volvo. A steering shaft recall, they towed the truck on a Saturday and had it back to me on a Wednesday and actually paid me downtime.

The second was the Bendix air compressor gave up the ghost, they had a tow pick up the truck on a Sunday at my house and had it ready on Tuesday morning.

When I first got going as an owner operator I bought a 2010 truck. I could see right away that thing was going to nickel and dime me to death. I made an aggressive move to dump it and get into a new truck.

For ME, it was the best move I could of made. I paid $134,500 for a new 670 with owner operator specs. I financed $121,500 at 5.5% through the SBA.

I put a 7 year note on it to lower the payment so that I would have a little breathing room the first year or so while getting my feet underneath me as an independent.

The payment is $1,745. However, what I've done is pay extra every month, sometimes a little more when I could. As a result, I've closed the gap on the ammortization schedule from a 7 note to 5 years.

My lifetime fuel average is right at 7.3 mpg, which for the lane I run, is pretty good.

I've had absolutely no issues with emissions...

I also bought a new 2016 53' Utility trailer in May of 2016 for 30k. My payments on it are $475 a mo. I'm considering writing a check next week and pay off the balance owing of $11,000.

The moral of the story for me is that buying new was really an imperative and the numbers overall bear that out.
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Sounds like they have good support with warranty good to hear for a change.

Rideandrepair, Sep 24, 2018

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RaRa said: ↑

With a used truck you have to keep paying the truck note and you will have to pay for the work they do. It takes time to find a trusted independent shop. Im not turning wrenches on anything im not a mechanic. Im a driver. God forbid I buy a used truck and a month later it needs a new engine costing me ~30k.
I'm not talking about renting. I'm talking about a full service lease. I would only pay for gas. If I break down they will give me a rental until it's fixed. ~4k a month is the highest I have seen for a 3yr full service lease.

It seems like a no brainier to me especially if you are planning on expanding and not driving in the future. Nobody is going to take care of your truck like you will. Some people hate leasing. I lease my personal vehicle no maintenance costs, wont leave me stranded if it does it gets fixed for free and I get a free rental, I get a new one every 3 years, and if I pick the right car I can sell it for more than the residual. When my 14 year old jeep left me stranded with no way to get to work I cant let that happen again. Leasing makes sense to me especially with a semi truck. The likely hood of it breaking down while I'm at home is slim to none. It's best to have a brand new truck that I can almost guarantee will get me there.

Do you keep records? How much have you spent on maintenance since you've been trucking, how many years? How much did your truck cost?
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There are some good turnkey advantages to leasing.Especially if you have a lucrative account to service. $4000 is a lot of money per mo. About double what I would be willing to pay personally. I also used to lease a new vehicle every 2 yrs A Jeep a caravan another Jeep a Dakota. I got the employee discount as my wife’s Father was a retiree from Chrysler. It was nice not to have to do any maintenance.Gave me freedom to focus on my Truck(s). But I bought a car after leasing went out of style around 2006 Just weren’t any deals. Now it’s back. As Manufacturers compete for Market share. Very Tricky business . I don’t know anyone who has made $$$ at the end as residual value is usually higher than Market price.Its a game they play losing $$ on the financing end of it . Which they own anyway. I buckled down and bought 2 used Buick’s. The cars old folks drive.No resale value with low 30 k miles. Ran them 4 yrs. before buying what I wanted. I’ll say figuring total cost of ownership those cars cost about 1/3 of my lease pymts were. Had I kept them longer even less. Overall lease vs buy depends on current mkt conditions. I just got tired of owing $$ on everything I had not really owning anything.I now own 2 decent cars I own an old P/U I own a Semi Truck and 2 Trailers.I owe $3500 on my newer trailer. And as much equity in my home as I owe. I did a comparison of myself and my Grandfather. He owned 1 new car in his life.He worked on line 17 yrs before he ever bought what he built.Paid off in 18 mo. Paid house off 12 yr. bought paid 70 acres frontage on I 70 near Crossville Tn. for retirement investment.We live in a different world today. No I have no desire to be that frugal. I want to enjoy life. But I also would like to see some benefits for my labor.I still think you can buy a Used (2yr Old)Truck Or Car for that matter right and keep 4-5-6 yrs and come out ahead with minimal headache.

Rideandrepair, Sep 24, 2018

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RedForeman said: ↑

Forgive me if I got this wrong, but you sound like someone who is considering truck ownership and self employment with said truck. First problem is you're already dictating what you won't do. IMO that tells me you're not hungry enough to be in business for yourself. You don't have to do all repairs and service yourself. It helps tremendously if you can do a few things and at least know what's involved so you won't get taken advantage of, even on a brand new truck. In other words, at least have the option to do it yourself even if you never do. When you can do something yourself, you will save on parts/labor of course, but more importantly downtime. There's been countless times I've taken care of some little thing at a truckstop or even on the side of the road, that would have cost me a day dealing with a shop and 4X the cost. Not what I prefer to do, but sometimes I got to suck it up and get dirty instead of opening the check book and quit working until it's ready.

That's a big ask. I've been in business 7 yrs, operate two rigs, and bought and sold my way through 5 trucks and trailers for various reasons. It's not as simple as just running a total. That number would have no merit for the discussion. It's been an expensive learning process that everyone will go through, whether you think your smart or not.

To sum it up, I'd say the school of hard knocks cost me around $50-60k in the first two years. I simply did not know how much I did not know. The first two trucks were educated bad guesses that cost a good deal. Much of that cost was inflated due to bad service dealers, both factory and not. To be honest, nothing would have made that better for me, short of apprenticing with an old timer who already learned those lessons and made sure I learned them too. But I didn't do that.

Where I'm at now is two trucks nearly identical specs. The one I drive ('07 T600) cost around $40k 6 yrs ago and was paid off in 3 yrs. I'd say once a year it goes down for something more than a light bulb, might cost as much as $2,000 give or take. It had 620k on the clock when I bought it, now coming up on 1,1mil. The other one my son drives ('07 387) I bought last year at auction for $5,700 with 1.2mil on it. I've put about $25k into it to get it back in shape (no payments), after it's previous owner took a couple years of going broke in it and neglecting it to the point I was barely able to drive it from the auction to the shop 70 miles. Since then pretty much PM's and fuel. All that said, I got a couple of $20k Cat overhauls on the near horizon. Which, at the rate we go, will probably last longer than I'll keep working to worry about it. And really, before you flip out about gold plated yellow overhauls, consider that's like buying 10-15 more years of the same truck for $20k. You can't beat that with a stick.

Trailers, I haul reefers. At the moment two '17 models bought a year and two years ago (beginning and end of the model year). For those I really was able to make the cost benefit of new work in my favor. Enough I was willing to try one. That worked out great so I bought the second one. The last year I was running the older trailers (a '02 and an '06), I had a run of less than minor repairs. I'm on point with PM's, so maybe it was just that time? Who knows. What I did know is that in my business that's playing Russian roulette with a cargo claim, not to mention driver fatigue dealing with it and potential service failure (customer). After 5 or 6 close calls, I got fed up enough to pursue funding a new one. Expectation being zero maintenance and est 25% less fuel. Reality is the first one ended up making 8-9 warranty visits for the same thing before Thermo King got it right. That wasn't good. Maybe I got a lemon. However, with that behind me, the reality has been better than expected fuel savings on the order of $500/mo each which does knock a corner off the payments. And the trailers have been trouble free otherwise. The 2nd new trailer has been zero trouble. And those two will be up for sale in 2021 and 2022 when their replacement gets delivered. or maybe sooner if I get tired of doing this crap.

The crazy thing is none of that matters for you. Just because it works for me now, doesn't mean it will work for you. There's a thousand details in your case that will not line up with what I'm doing. Unfortunately nobody is born knowing everything, so at some point you'll have to set the spread sheets and internet discussions aside, and put your money where your mouth is and go do it.
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It’s hard to decide a lot of times I try to split the difference since things can go either way. I agree on the newer Trailer I kept my first one too long.On my second used Dry van so far so good floors already looking bad though. Soon as it’s paid for I’m getting a new or 1 yr old Trailer.Ovefhauling your Trucks is kinda like buying them again from yourself only this time you know what you got!!! Great honest post. Good Luck to you and your son

Rideandrepair, Sep 24, 2018

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Dave_in_AZ said: ↑

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?

View attachment 246867
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Does She Drive?

Rideandrepair, Sep 24, 2018

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RaRa said: ↑

Im saying I know MY limitations. There is no way Im going to engine swap a semi. I dont have the equipment nor the desire to do it. Why does me not wanting to work on a semi get so many people riled up? My time is money. I dont want to spend my off days tinkering on a semi. I would rather spend that time resting and finding direct shippers.
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Before I bought a Truck I would tell O/O’s I intended on paying others and just budget for it. They would all have the same laughing reaction. After a few $600 repairs for a/c clutch fan / etc. $ 600 was the majic #.I watched and tried to learn when getting work done. It hurt too much to give my hard earned money away.

Rideandrepair, Sep 24, 2018

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Rideandrepair said: ↑

Sounds like they have good support with warranty good to hear for a change.
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The other part of that is having a relational component with the dealership/shops, etc. In addition, I stay on the same lane (intentionally) so it helps with getting things done because I'm not out of my territory.

Scooter Jones, Sep 24, 2018

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Scooter Jones said: ↑

The other part of that is having a relational component with the dealership/shops, etc. In addition, I stay on the same lane (intentionally) so it helps with getting things done because I'm not out of my territory.
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That’s main thing

Rideandrepair, Sep 24, 2018

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Rideandrepair said: ↑

Does She Drive?
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He. Kitty is a male. Mincy is a female.

Dave_in_AZ, Sep 24, 2018

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Dave_in_AZ said: ↑

He. Kitty is a male. Mincy is a female.
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Tell him I apologize

Rideandrepair, Sep 24, 2018

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Rideandrepair said: ↑

Tell him I apologize
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I'm just keeping my mouth shut, and really enjoying this thread.

Dave_in_AZ, Sep 24, 2018

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