Theory of Profitability

Can you live on 10k per year if that is what your truck makes in profit? Probably not. If you have 5000 trucks that make 10k per year each, then the smaller profit per truck is easier to live with.

 

But what your failing to realize is that the more you buy at one time, the cheaper the price is.

Many large fleets buy 1000 trucks of one make at a time. Buy doing this, they get a premium discount. I'm guessing that fleets like Swift is only paying 50 or 60k for one truck. Then they either lease it to a driver for 89K or they run the dog piss out of it & sell it for 40 to 50k.

So in reality, that truck didn't cost them nothing but profit.

 

Yes it can be done, but as a new O/O PROBABLY NOT. Many people spend more than 120k on a new truck.

 

a lot of the major companies dont even buy the trucks,they are leased and then released on the lop plan
now if you have a good contract and a good team you could make money on that truck

 

In theory your expense escrow will be lower per mile with a new truck, so that would offset some of the higher purchase price. But why pay the depreciation on a new truck just to have that new truck smell. Stick with the 40-50K plan with a good maintenance account and make more money. If you insist giving money away I will forward my address.

 

Sure you can turn a profit with a $120,000 truck.

Now if you have to rent the $120,000, that is a different story, you will then have to support the capitalist who has the cash by giving him some or most of your profit, while he cashes your check and you do all the work.

 

But...But...It smells SOOOO GOOD!!!

 

All the "BIG" trucking companies started small. Just like any current one man independent operation. The difference? At some point the current "BIG" company owner made a deciesion to expand.

They started with used equipment. Just like most one man operations. They paid it off and continued to operate it for another year or two putting the money once used for the payment into savings. Then when they upgraded the equipment there was a bigger chunch of $$$ to apply to the down payment on the next used truck. The shorter pay off time creates the opportunity to save more money over the life of the second used truck. Then when it's time for the third upgrade they were able to pay a sizeable amount as a down payment; if not pay for the new equipment in total. Now instead of having a truck payment you have profit that can be invested for even quicker growth, and it gave them the ability to purchase new from then on. Just like any current o/o can do.

You must learn to walk before you can run. And NO!, you cannot start at the top. Climb the ladder!

PET PEEVE: people who complain about companies making a profit. Just remember, your employers profits supplies you with a job.

 

Did you no know brokers pay more if you have more chrome.