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

The Difference is the House isn't making you money as an Income and you don't need the deductions where a Truck Should be making you money as Income and you need all the tax deductions you can get.

 

''A write-off is nice to reduce your taxable income''

And that's the key..keeping your taxable income low is key in making more.
If it looks like your running in the red or close to it you keep more money.
My wife is an accountant too but when it comes to the commercial part of it she misses some of the deductions.
Don't go but what I say ,do your own homework and see what you come up with.
Everyone is different..I'm not trying to TELL you how to do it just to think about all the different angles.

As for DFO's situation..paying off his truck will generate more income in the beginning but what about a major breakdown?
Hopefully you take your profits and add them to a maintenance account or general fund.
All it takes is one major breakdown and you're on the ropes with no one but yourself to pull yourself out.
On a lease with SFI if you breakdown they have your back..used trucks have a catastrophic breakdown waiver for just that.
New trucks have a warranty for the first 2-3 years..with regular maintenance you shouldn't have any problems.
Sure something could crop up and show it's ugly face but you're already prepared with your maintenance account.

I don't have the answers for everything..In my situation a lease works.
I can't explain it for your situation and don't want too.
I'm still figuring it out as I go.

 

To quote Mr Urbanecheck, my sophmore math teacher, it all comes down to the math.

In this case if the tax deduction saves DFO more than the extra interest then the longer lease is better. If he ends up paying more in interest then the deduction saves him than just buying the truck outright is a better option. There a couple of "calculators" online that may make the math easier.

From my limited understanding of DFO's cash on hand, available credit, revenue, expenses and long term business plan he should be able to have the truck free and clear within 12 months but be able to run it for another 2 years before needing a New to DFO truck. In that two years he can scheme and save for what's next.

I'm all for using other people's money but it depends on the cost. Right now interest bearing accounts are paying a pittance, the markets over priced and mainly grinding sideways, and as truckers we can't watch the market closely enough for serious commodity or forex investing.

Putting a chunk of cash in is far from the worst idea. It all depends on what will make DFO payas little as possible for both the truck and taxes. However the math works out, that's how you should go.

 

I guess my plan for the time being is just to see where I am financially at the end of November come the end of the lease.

If I am able to sock away enough to pay off the truck completely + have some reserves for repairs I will just plan to buy the truck out completely. All that will depend on how I do over the next 8 weeks. The good news is freight is strong this time of the year. I will try to avoid taking any extended home time but we all know how that goes.

If I don't have quite enough saved up to be ready to buy it off completely, I think I really like GR's idea of paying down a significant chunk of what I owe (getting it down to around 25k or so) and then releasing for the shortest period possible, and buying the truck out early as soon as I have enough saved up to be comfortable being completely on my own.

Of course, there is always a chance of plan Z which ALMOST occured in Carlisle... which is a cheap older truck shows up and I just go buy that instead. There was a very clean older Volvo with a S60 detroit and an 18 speed that showed up 60 miles from Carlisle for 17k while I was up there last week. It was sold by the time I decided to call about it LOL. I would have gone and checked that truck out in a heartbeat.

 

DFO. Just remember Schneider requires the truck to be less than 10yrs old.

 

Someone lied to you. Must have an electronic engine for E-Logs and pass DOT exam.

 

I read that on their web site.

 

Exactly. Also depends on who you talk with. I talked with someone who said it was ok for ME to bring an older truck onboard, but I gave them the specifics of the truck and go the OK to make sure it would work with the e-logs. For others, your mileage may very, cover your *** before buying a truck and then finding out the person you talk with goes by the book and says nope can't bring it on board.

The 10 years or older thing that many companies enforce is just sad. I don't really get why it's there because just because a truck is older doesn't mean it's going to be any less reliable than a newer truck. It all depends on the specific truck and how it was cared for. Going by that rule, how about everyone go out and buy early 2000s first round emissions-era Detroit 14.0Ls, CAT C-15 bridge motors and early Cummins ISX. The Detroit would overheat, the CAT would grenade a turbo and the Cummins would eat it's cam. All 3 before leaving the dealer's lot.

 

Quick question.. When you guys talk about what a load "pays" are you also adding in the surcharge ? so like your avg let say is 1.50 is that with the surcharge for fuel added in also ? or do you calc that different ? (Example. I get paid at Knight 1.01 Base then I get what Knight calls "Fuel Protection" at 42cpm so add them together my total comes out to 1.43pm.

Also, When you look at the load board and it says X load Pays Y does this already have the 35% that Schneider takes factored out of it. So like if it says 2.02 then that's what it pays YOU!

Thanks for the input

 

What the load pays has the fuel surcharge included and yes, that is what is paid to the truck. all figures on the load board is your money. you can see a break down of the line haul and FSC. Also, the FSC can vary between customers depending on what SNI has in their contract. We get 100% of the FSC. Other companies will pay FSC to their I/C's based on the DOE every week even though they may get more from their customer.