Purchasing a New Straight Truck

pantherii

Expert Expediter
Our family is moving to North Carolina in the coming months, to better our business as expeditors and to get out of Florida. You guys were right about getting freight in and out of Florida it's tough but were still making excellent money. But I know when we go into service Monday we'll be dh to either savannah,ga or sc. We figured being in a northern state would be easier getting home.
Had a question about when we buy our new truck, if you had 20grand to put down on a truck would that be wise to do so or is that too much, and if we do decide to put that much money down, should we ask for money off the price of the truck or ask for extras? our criteria for the truck would be, automatic,84inch sleeper or larger,22 to 24foot box, double bunk, air ride, i guess just the works etc.
if theres any suggestions about purchasing a new truck or advice i would really appreciate it ( was looking at the sterling 96' allison automatic) thx guys ....hope everybody had a nice thanksgiving
 

davekc

Senior Moderator
Staff member
Fleet Owner
Had a question about when we buy our new truck, if you had 20grand to put down on a truck would that be wise to do so or is that too much, and if we do decide to put that much money down, should we ask for money off the price of the truck or ask for extras? our criteria for the truck would be, automatic,84inch sleeper or larger,22 to 24foot box, double bunk, air ride, i guess just the works etc.
if theres any suggestions about purchasing a new truck or advice i would really appreciate it ( was looking at the sterling 96' allison automatic) thx guys ....hope everybody had a nice thanksgiving

Way too hard to answer that question. Alot depends on your finances and what your income requirements need to be. All the truck in the world means little if you get into a financial bind. My personal opinion is to have at least $10,000 in reserves for emergencies, repairs or downtime. Just because it is under warranty doesn't mean you recieve compensation for any lost time. Accidents and a whole host of other issues come into play when looking at this.

On a side note,
The Sterling is a nice truck.

Davekc
 

LDB

Veteran Expediter
Retired Expediter
The Sterling is a nice truck and Jon Mosier is a stand up guy to do business with. I got one from him in '04 and ran it till this month when I put a team in it. I'm going to a class 8 truck now and wouldn't go back to a class 7. As discussed in another thread, it's a good idea to have at least 3 months expenses in reserve just in case Murphy shows up and the worst happens. I'd be sure to have that much set aside and whatever is above that put it toward a truck. Good luck to you.

Leo Bricker
OOIDA 677319
truck 4958
73's K5LDB
Support the entire Constitution, not just the parts you like.
 

Broompilot

Veteran Expediter
You better know what your payments will be in my opinion your not putting down enough. In one years time you will have more debt than equity. (The truck will depreciate more than the $20K plus your payment amount) It is not a good situation to be in you need to put down at lest 25% in my opinion and as LBD would say Dave Ramsey.

Keep saving you will not regreat it.

As I stated in an earlier Post your truck and financing will either compliment you or ruin you. Make this choice with much thought, guideance, and instinct. Once you sign on the dotted line its your problem no one elses no one will care when a crises comes up and that friendly bank will not be so friendly when you ask for a favor.

PS one more question, what are your plans for a reserve fund. Things go wrong or cost more than one planned on you can take that from a Rookie (I know from expierence).

Good luck I wish you all the very best.
 

pantherii

Expert Expediter
broompilot, on a 95k truck 20k is roughly 25 percent down plus we plan on having 15 to 20k in reserve, were making a great deal on our house in florida, thats how were putting this money down on the truck and to have money in reserve for slow times and mechanical breakdowns along with unforseen events.
we figure the sterling with the 96' sleeper is 105k and at the expo in ohio they said they would take money off the truck if you put down a decent down payment, so im hoping that 105k truck will end up being about 95 or less.
My dad is turning 60 next year and plans on retiring at 65, he left a job he's done for 20plus years, so this is it theres no turning back this is what we want to do and plan on doing whatever it takes to be sucessful, so since we are in it for the long haul we want to be as comfortable as possible and right now in a fl70 72'sleeper 560,000 miles on this truck its not cutting it, we can't wait to become o/o and get the whole pie and not just a portion, we realize theres alot of stuff that comes along with becoming an o/o and we look forward to the challenges that arise.
Enjoying the thanksgiving holiday weekend and cant wait to get back on the road...thanks for the input all be safe on the roads.
 

jaminjim

Veteran Expediter
Don't forget that part of the whole pie will include a dirty pie pan when all the good stuff is gone.

The largest expense we have seen with our trucks, (past and present) has been the lack of revenue when it is being repaired. Add to that the cost of repair and it is kind of a double whamy.
 

Broompilot

Veteran Expediter
I admire your enthusasim, your reserves seem to be in check. With two drivers you should have no problem with revenue but you will be stacking miles in a hurry thus your vehicle will depriciate faster than most but as long as you save as you go along you can cover the excelerated depreciation.

I did this exactly as you did tons of excitement, alot of $ down even twice what your planning on. I am now with a great company but believe expenses can and will get out of hand the best thought plan, can change. New truck warranties are great but I find that its not so much the truck as it is with this mfg or that part that has nothing to do with the actual truck build. These companies will skirt out of anything to avoid not paying a bill stick you with the bill.

Your a business owner you have to do what is best for your business right now and that option does not always include driving 400 miles to the individual dealer to get it fixed and the mfg does not care to pay for a repiar that they did not have a service tech look at let alone fix but you gotta keep running so your only option is to pay for it and try to get them to reimburse you this is where I have spent alot of $ in the last year.

KW makes a great truck but everything else on my truck from the sleeper mfg to the aux generator and so on and so on has cost me $ out of pocket. Just beware I cannot be the only one in this situation.

There are positive and negatives in buying a new truck just keep that in mind.
 

tazman

Expert Expediter
Hi,

Happy Holidays to all...

I often get requests from customers about this very subject...and a lot of times dealers (especially salesman) often over look the lease aspect of securing a vehicle. Mainly because they (dealer) gets a nice portion of the fee that the banks they used gave them for "selling" the money to you.

TRAC leasing (IMHO) or FMV lease may be a better alternative to a "traditional buy" option............

For many...leasing gives people (especially new business people) a bad taste.....since many retail buyers have been "lured" into bad lease progams buy some car dealers and companies !!!(again IMHO)

Think about this .....taking $20-30K and dropping into a vehicle that you will rack up tons of miles on and then having the value at the end of the loan or at trade in time be less than expected....Ever happen to you ????
So you bought a product...used your money and still paid for the use of the vehicle during the time you had it....sounds like a lease to me

Difference is however that in a true lease you keep a good portion of the "down" money for other uses (like slow times ...to keep your payments up)
You pay only for the time you actually use the truck....

You've probably heard the saying. "buy what appreciates...lease/rent everything else"

My advice... (No my opinion) ...explore all the finance options BEFORE you give away your hard earned money....(and...yes I sell trucks...but not the kind you are looking for)

2nd point.... (again IMHO).....get everything you want spelled out on a hard copy quote document.....then negotiate...you can then add and delete as you sit down with final numbers...it easier for everybody that way

Just remember (be realistic) We all have to eat and pay bills too.....

Thanks for listening....

Frank in Pa.

"The Beast in the East";)

P.S. - If you want to learn about leasing there ar a number of place on the net you can search...(type in: TRAC LEASING or FMV LEASE
You'll get a ton of info
 

Broompilot

Veteran Expediter
Personally I think a lease is a bad option for a small business owner takes away all of your options if something goes unpexcted like illness.

When signing a lease you are OBLIGATED to all TERMS and CONDITIONS in accordance to the lease including up keep or what THEY may determine as WEAR AND TEAR as compared to what is really expected or what you feel.

It is impossible to get out of a lease and put someone else in it, why would someone take over your lease? Someone may take over the truck but the financing is more important on a vehicle than the actual vehicle itself. Do not forget things happen in life unexpected, with a lease it makes no difference your STUCK until all terms and conditions are met. NO IFS AND OR BUTS.....

Look at the For Sale ads on here, I will bet that very few individuals can qualify let alone take over another persons lease. I know I as an owner looking for a truck a few months ago disqualified all trucks with (take over lease or take over loan) they all paid to much.

Second Leases on big equpment like this are designed for companies that have a history, these people have no history in this industry other than a few weeks.

Third your gona still need a down deposite, you never own anything and your gona need a FICA score of more than 750 with a BUSINESS PLAN. Large companies can write off 100% and so can you problem is you need profits not write offs were small business people.

Anyone who knows more than I or if I am not correct feel free to correct me been there done that NO THANK YOU and on small items not big.
 

highway star

Veteran Expediter
Owner/Operator
Things do happen in life. If something happens in life, you still have the obligation of your loan. Will you be able to sell that truck in a week if something happens? I don't think so. And, you will be out that big down payment you made to keep your payments reasonable. It's a risk no matter how you go. That's what you get when you decide to be an O/O.
 

Broompilot

Veteran Expediter
Your right on this one Highway Star how stupid of me to remember that I have been down this road and needed to get out when I couldnt because the lease said I AM STUCK... And stuck I was to the end of the terms which I did pay and regreated every month thank God it was not for a truck but for a piece of 20K equipment in my last business.

Lesson learned the hard way.
 

bigguy1001

Expert Expediter
Hello gents, I am the bigguy you met at the expedite workshop in kentucky. How are those hats fitting? They looked good that night. There may be no reason to put 20 grand of your money down on a truck. You should definitely consider leasing, something with unlimited miles. Yes, it's out there in commercial vehicles. And consider the warranty as well. We have a fleet owner who leases every truck he has. He leases them for 3 years and the truck stays under warranty the entire time because he buys the extended warranty. You know, or at least are getting an idea, of what your income potential can be as a team in a straight truck. The difference between your costs and earnings are the good part, the part you get to keep. Try to do the research to get your costs as low as possible. Why buy a truck for 1730.00 per month after putting 20,000 down when you could lease the truck for 1742.00 with nothing down. I got these figures at the cars.com lease vs purchase calculator and assuming a 25% residual value with both at a 60 month term with a 7.43 intrest rate or .00309 money factor for the lease. Also, if you are going to stay in straight trucks consider a class 7 with a 260 or 300 hp engine. Yes, you will not be first at the top of the hill but how often is it really an issue? At the current cost of fuel you must consider mpgs for the life of the truck, not just how fast you get up the hill. Think long term and reduced costs and that may keep you from being tempted astray. Leave the big horses to the big dogs who like to look good in the fuel island when they lift the hood and the engine is yellow. They pay for that with every mile. If your in this business for the money, remember the money. If your here for truck stop bragging rights then get the biggest dog you can afford and enjoy yourself.
 

BigBusBob

Veteran Expediter
Driver
ok, my take on leasing... and buying a rig in general...
Leasing is great for the 9 to 5 accountant that wants a new Lexus every year or 2. Leasing is great for the co. that would like to have a new cargo van every so often for local deliveries in town.
Leasing is great for the guy that wants a new pick-up every so often for his small construction firm. Leasing is great for some.

Leasing is great for the guys that are gettin' into 18 wheelers with big co.'s like Schnieder or Swift and decide they like it and want to lease a tractor from the fleet to own it.

I don't see a ton of expediters out there leasing their trucks. The leasing of straight trucks is mainly for firms that are outside the realm of expediting... seafood, soda pop, and water delivery co.'s, small or very very regionalized operations. You don't see leasing in expediting because it's just not done, why? because of the wear and tear put onto the trucks. Expediters use secondary roads an awful lot, sometimes more than interstates. They're not delivering to places like pretty Wal-Mart distribution centers every day. They're delivering to small factories with rough lots, tight turns, inner city pick-up and drops... off the beaten path and thru the beaten path and beyond.

To me, Leasing is a fancy word for renting... only they jazz it up.
Leasing is not exactly like Renting.
No, Leasing is "keep it for awhile, but keep it lookin' good. Bring it back and we'll give you another model that's shines too.".

You can't drill holes in it, you can't modify it with Chrome and lights and fancy paint or wheels. You can't put nice seats in it.
Basically, you're renting (I mean leasing) a stock item and you can't modify at all - or it voids a warranty or lease aggreement or messes you up in the long run.

Ok, let's say you do lease a straight truck for expediting... after a couple months (or less) there's going to be something you want to change and/or modify on it - trust me, there is. Modifying could be something as little as drilling holes in the dash for a CB, or putting aluminum wheels on it to save weight. either way, it's gonna cost you somethin' in the long run. Either you'll have penalties you'll have to pay out for drilling holes somewhere on something, and/or you'll either have to give up your aluminum wheels when it's time to turn the truck in, or take them off and put the old wheels back on (and pay for that).

Now, if you BUY a truck, finance it or buy it outright - you don't have to worry about any of that... 'cause that machine is yours!
You can paint it 34 different colors and chrome plate that Allison shifter box, because you bought it, it's yours! Not some Leasing outfit that just wants it back fairly decently so they can put it out on an auction block somewhere and make even more money on it.

Ok, steering away from the leasing subject, because you didn't even say a word about it in your original post... Why spend sooo much for a new rig when you can get one slightly used for a bunch less.
Take your time, look around, the right machine will come along.
Go to Knoxville, and keep an eye on their lot - not their website, 'cause if it's any kind of decent wild rig, by the time it hits their website it's usually already gone. Keep an eye on the truck dealers sites here on EO. Sure some might say things about some of them, but the fact is you're lookin' for a rig - the dealers on this site have them - you just gotta keep in contact with their sales staff so you don't miss a good deal.

I'm not sure just how extensive of a sleeper you want, you said 96" sleeper, and there's a ton of different set-ups for a sleeper that size besides just havin' 2 beds in it. You can put a plumbing system in it, electronics and cabinet set-ups can vary greatly too. You want a run of the mill double bunk 96" sleeper or do you want something for stayin' out for a couple months? Whats your criteria there?

I'm not even gonna comment on the Allison Automatic tranny except to say I wouldn't get any other than Allison - she's a great gal!
AirRide, well, have you thought about goin' to a Class 8 chassis?

Perhaps you'll want to consider a truck with a daycab or even an extended cab and then add a sleeper to that - yes, you can do that.
All you really need is something like a 22 footer or less. You can get by with an 18 or 20 foot box, so long as you keep a team in it.

As long as your asking about specing out a truck, be sure to put some nice lockable steel or aluminum storage boxes on it somewhere - to hold tools, dirty laundry, and supplies. Don't forget that Pallet jack and all those extra ratchet straps, and if you're gonna go all out... Get a sleeper with windows that you can both see out of,
windows for top and bottom bunks, that's nice.

There's more to consider than just the sleeper size and transmission. The 20K down on a good used truck with a nice sleeper sure would cut those payments down on you. That would give you more spending money for the other items.

Spec it out right, look for a new or used rig with as much stuff that you want already on the truck - that way you can get a feel for the price ranges you'll have to pay. Don't look for a truck with a 96" sleeper that has no automatic tranny in it. Look for a truck with all that on it already - it'll give you more bargaining power, but the dealer has more too, 'cause they know it's what you want.

I'm sure you're aware that wanting an Allison Automatic tranny, while nice, is going to add substantially to the price.

You're in a 72" bunk now... and considering going up 12 inches in sleeper size? Unless cost of sleeper size is stopping you...
Why not go 2 more feet? Try this: sit in your sleeper and look around - both of you - just sit and look forward towards the cab and figure out what you could do with an extra 2 feet, as opposed to just a one foot longer sleeper. You'll find you'll need a tape measure for that - once you move the bunks back an extra 12 to 24 inches, there'll be room for a whole bunch more goodies. Sink, larger TV, and bigger beds are the top choices, along with extra upper cabinets.
However, consider counter space and perhaps even a table somewhere.

Just tryin' to help you with ideas.
 

jaminjim

Veteran Expediter
Shop around and don't be in a hurry. A friend of mine use to tell me that I could always pay too much later.
 

whitewolf53

Expert Expediter
PantherII: You and your father just got into this expediting a little while ago.I do believe (though i could be wrong) that you are moving way too fast!!!! Give it a year and see how you like it then.
You are talking about an awful lot of money to invest in something you really know nothing about yet. All i am saying is too slow down a little bit.Would not like to see you get BURNED.

Whitewolf 53

HERE LIZARD LIZARD LIZARD
:p :p :p :p :p :9 :9 :9 :9 :9 :9
 

BigBusBob

Veteran Expediter
Driver
There's an interesting small article on truck buying in the latest edition of Road King magazine - pick it at a T/A and check it out.
 
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