THE ADVENTURES CONTINUE - DFO gets a truck and hops on Schneider's IC Choice Program

CU is easier to secure a loan from. at least for the smallish amount I got to get my cdl.

 

Now this is a funny response, The number one rule of any well run business is debt is a killer. IF rent to own is so awesome why doesn't everyone get thier TV's and other stuff from Rent-A-Center. If the ONLY way someone can get a truck is thru the carrier IE: SFI then so be it. Trying to convince anyone that it a a good way to get a truck is just plain stupid.

 

My truck was $46k, I got $15k on the freightliner Columbia I traded in. It's a 5 yr note at 6.5 percent interest. I have 4 yrs left on it.

Lone mtn mtn is where I got the Columbia in 2005. I went with them because my credit was shot. My payment was $1025/mo for 5 years, it was a basic work truck. I had to borrow the down payment from my parents so don't preach to me about poor personal finances.

 

The main problem I see from drivers that think leasing is better than buying is the myth that you get better tax writeoffs under a lease than a straight up purchase. Really, that argument makes no sense.

Under a lease it is easier from an accounting standpoint to write it off as an expense. Your weekly lease payment is reported directly as an expense. On the other hand, purchasing a vehicle is a net wash on your books. Cash gets converted into a fixed asset (the vehicle is an asset with a cash value). The only direct write off you get at the time of payment is the interest portion of the payment, which is a direct expense.

The vehicle is then depreciated over the life of the vehcile, probably on a straight line basis. It's pretty much the same as running lease payments, you just might not get all the writeoffs up front depending on the depreciation schedule.

Also, assuming that you are paying more per week for a lease compared to how much you can buy it for, of course you are going to have a larger tax write off. You are paying more of an expense lol.

In the end it depends on how the numbers work out. I may/may not be worth paying a higher rate for the lease depending on the person's individual position. There might be added value to the fact that you can simply walk away from the truck after only one year. I think under sfi's 1 year lease you can walk away at any time with no penalty (not sure if I heard that correctly) so again it depends on what each individual wants to get out of the situation. If you're in for the short term leasing makes sense. If you're in for the long term leasing makes absolutely no sense

 

My bottom line works out just fine.. Not trying to convince anyone of to doing it my way. All I'm saying is the myth that a lot of drivers have is they are so scared SNI going to make money off of them that they will sometimes end up wasting more money by going through private financing etc.. Of course SNI going make money that is what they are in business for. So is the bank! However one choices to finance their business is their business if it works for ya .. That's great! no need to get personal!

 

Not sure what you mean by preaching about poor personal finances ..said nothing of the sort! See...you had a trade in and money you could borrow for the down! that is great .. I would do the same if I could have.. Some of us don't have that. However one can still finance through carrier and make more money as O/O than company driver. At the same time your paying into a truck that will hopefully be an asset in the future and possible have a chance to save up more to cover repairs in the future (that's what I'm working on). Not saying you are personally, but many make it sound like it's so stupid to finance through SFI and it's not!

If you have the means to find your own financing ..then sure great way to go! Many don't have that! So we have to start somewhere. And yes I understand I may not be getting the best deal on my truck by going through SFI but I am still advancing in trucking and income, that is the difference isn't it? Don't most of us want to make more? See.. I use to think I needed to save up the money put it down on a truck and be and O/O.. Mean while I'm still working as company driver and not making as much. It was going to take me many years before I could save it up.. I took a chance and went for it by stopping that kind of thinking. Financed the truck with SFI so i could get going, earn a heck of a lot more and be moving forward instead sitting there trying to save ...

 

Sorry DFO .. I"ll go back to my own thread! lol.. Got carried away here!

 

By the way! Many if not most businesses are started by going into debt at first! Most of the successful business owners I know have used other peoples money to start there business and run their business. Some thrive on do it! Not a recommendation... Just saying it is very much a part of a well run business!

 

The way I personally see it, leasing is a real challenge to make successful. I'm doing the lease because my credit is also shot, ruined by stupid decisions back years ago. But I'm looking at this as a challenge to be overcome and good training for the future. If I can pinch pennies, watch my fuel and speed, book loads intelligently, take minimal time off, and make this work, then when I do save up enough cash to purchase a truck from a dealer or Lone Mountain or whatever, I'll REALLY be successful because I trained myself to operate under the most difficult of circumstances, and developing those habits now could really pay off in the future.

And it is possible to make money on a lease purchase. Here's my cash flow breakdown for this past week, and I had way too much of a lead foot, have to cut back on that. But here goes:

Loads: 4
Total Miles: 3,267
Gross Income: $5,148.80
Fuel: $2,292.42
Expenses: $757.41

Net Income (Profit): $2,098.97
Net Profit Per Mile: $0.642

Note: An additional $115 was deducted from my settlement for my maintenance account, but since that is still my money, I don't factor it in here.

Now, this week was an exceptional week with very low deadhead miles and great paying freight. You can't do this every week, but netting close to or slightly over $1000 every week is not too hard as long as you minimize hometime and watch your cash flow. That's roughly about what I made as a company driver, but I have much more freedom here in where I go, what I haul, and when I take time off. To me, that's a good deal.

However, if a driver has the means to finance a truck through a 3rd party for a much lower payment, that would most definitely be the route to take. I didn't have that option myself, but if you do, go that route.

 

Frank Deluca, founder of Subway, started his first shop on a $500 loan from a family member. It's all in how you conduct business.