re-up?
- Thread starter kg
- Start date
truckerbse2
Expert Expediter
Yes, but I would buy a good used heavy truck, stretch the frame and put a D size box on it. The straight trucks are the bread and butter of expediting. You guys in straight trucks are running circles around tractor trailers and making as much and sometimes more per mile.
TJ959
Veteran Expediter
Some of us are making money and some of us aren't. I'm pondering this question right now. It's time to step up to a newer truck or down to a van and it's not an easy decision. I own my truck and have no payments but I'm still not making any money in a D truck. I hear the vans aren't as busy but the expenses are lower when times are slow. Come to think of it if I was any slower I'd be parked all the time. Maybe it's time to throw in the towell..........Before you ask, I don't turn down loads and I stay out if there is any business to be out there for.
I'm going to run my van until it absolutely won't go any more and cost too much to fix. Then I will have it towed to the nearest junkyard, sign over the title, find a car to rent, and drive home for the last time. Gas too high and going nowhere but up and as long as the company can continue to run 20-50 through orientation each week, there is no urgent need to raise the cents/per/mile or fight for higher fuel surcharges. Love the business but after 3 1/2 years on the road reality has set that major changes probably are not coming soon. But it will be just my luck that I will get out the day before they start paying vans 1.25 a mile lol. stay safe everyone.
>IF YOUR TRUCK/ VAN WERE TO OLD TO RUN TODAY, GIVEN PRESENT
>DAY EXPEDITING CONDITIONS WOULD YOU RE-UP?
>
>THAT IS WOULD YOU BUY A NEW TRUCK/ VAN AND DO IT AGAIN.
>
>I WONDER HOW MANY OF US WOULD CONTINUE.
>
>JUST WONDERING
No, Notta, Never, Nope, No Way.....
mcbride-
O/O-D unit-Team-6yrs
--What goes around comes around--
LEGAL NOTICE: The views and opinions expressed in this post are those held by the posting author and do not represent the views or opinions of Expediters Online.com, On Time Media, LLC, it's agents, subsidiaries, affiliates, advertisers or sponsors.
>DAY EXPEDITING CONDITIONS WOULD YOU RE-UP?
>
>THAT IS WOULD YOU BUY A NEW TRUCK/ VAN AND DO IT AGAIN.
>
>I WONDER HOW MANY OF US WOULD CONTINUE.
>
>JUST WONDERING
No, Notta, Never, Nope, No Way.....
mcbride-
O/O-D unit-Team-6yrs
--What goes around comes around--
LEGAL NOTICE: The views and opinions expressed in this post are those held by the posting author and do not represent the views or opinions of Expediters Online.com, On Time Media, LLC, it's agents, subsidiaries, affiliates, advertisers or sponsors.
There is a VERY important lesson in this thread, especially for those considering their first truck. From the day you become an owner/operator, and even before if you drive for a fleet owner first, you should think ahead not just to your first truck but to its replacement too. Truck replacement cost is an expense just like fuel, tires, oil changes, and insurance.
I know some will complain that I should not be talking of such things since I do not yet own a truck. Kindly note that I'm not talking about trucks here. I'm talking about financial planning; something I know a bit about (11 years experience in that field).
Estimate the longevity of your first truck. Then estimate (as best you can) its replacement cost at the end of it's useful life. (Truck salvage/resale/trade-in value is omitted from the example). Then divide the replacement cost by the number of months between now and your truck replacement date. That amount should be booked as a fixed cost and banked for the future.
If you cannot afford to save money today to replace your first truck, you'll end up borrowing money later to buy a second truck; which means you'll be driving for your banker once again (see finance cost figures below).
The numbers would look something like this.
Cost of a very nice D-unit today: $140,000
20% down out of pocket $28,000 (first-time truck buyer)
Amount remaining to finance: $112,000
Hypothetical truck loan rate: 10.5% (4% over prime, assuming you can qualify).
Five year payment plan (60 months) to zero balance will give you a truck payment of: $2,386.
Finance costs of this loan (interest only, additional fees not included): $31,186.
Total payout including down payment: $171,186
------------------------
Assumed inflation rate: 3% (a very rough estimate, even the best economists cannot predict the number).
Cost of the same truck five years from now: $162,300
(Future value of a current sum: $140,000 at 3% in 5 years)
Assumed investment return on saved money 3% (conservative investment sufficient to keep pace with inflation and nothing more)
Monthly amount required to deposit (invest) to reach $162,300 in five years: $2,404.
Monthly amount to budget today to pay off first truck and pay cash for your second truck: $4,890.
Total paid out of pocket for second truck: $144,240 ($2,404 x 60 months, interest earnings paid the rest).
Finance cost of second truck: $0.00 (no loan needed, you are paying cash).
Note that in dollar terms, you'll pay less out of pocket for your second truck ($144,240) than you did for your first ($171,186) because of the finance costs you avoided and the interest your replacement truck savings earned over the 5 year period.
----------------------
Is this realistic? For some it is. For some it is not. To find out if it is realistic for you, run the numbers and adapt them for your cirucmstances: actual truck cost, personal non-business living expenses needed, truck life cycle, etc.
My ONLY point here is to show how truck replacement costs can and should be worked into an expedier's business plan. It is an imprecise and incomplete example. Variables abound.
For example, a personal decision can be made to finance half of your next truck instead of paying cash for all of it. The interest rate offered on a truck loan varies from driver to driver. Insurance cost are not even mentioned above, neither is depreciation. A host of tax considerations also apply.
Once again, this is an imprecise and incomplete example, and my ONLY point is to show how truck replacement costs can and should be worked into an expediter's business plan.
(Numbers derived from Texas Instruments financial calculator and Microsoft Excel spreadsheet. Note that numbers can vary due to rounding and payment assumptions (end of month, beginning of month).
I know some will complain that I should not be talking of such things since I do not yet own a truck. Kindly note that I'm not talking about trucks here. I'm talking about financial planning; something I know a bit about (11 years experience in that field).
Estimate the longevity of your first truck. Then estimate (as best you can) its replacement cost at the end of it's useful life. (Truck salvage/resale/trade-in value is omitted from the example). Then divide the replacement cost by the number of months between now and your truck replacement date. That amount should be booked as a fixed cost and banked for the future.
If you cannot afford to save money today to replace your first truck, you'll end up borrowing money later to buy a second truck; which means you'll be driving for your banker once again (see finance cost figures below).
The numbers would look something like this.
Cost of a very nice D-unit today: $140,000
20% down out of pocket $28,000 (first-time truck buyer)
Amount remaining to finance: $112,000
Hypothetical truck loan rate: 10.5% (4% over prime, assuming you can qualify).
Five year payment plan (60 months) to zero balance will give you a truck payment of: $2,386.
Finance costs of this loan (interest only, additional fees not included): $31,186.
Total payout including down payment: $171,186
------------------------
Assumed inflation rate: 3% (a very rough estimate, even the best economists cannot predict the number).
Cost of the same truck five years from now: $162,300
(Future value of a current sum: $140,000 at 3% in 5 years)
Assumed investment return on saved money 3% (conservative investment sufficient to keep pace with inflation and nothing more)
Monthly amount required to deposit (invest) to reach $162,300 in five years: $2,404.
Monthly amount to budget today to pay off first truck and pay cash for your second truck: $4,890.
Total paid out of pocket for second truck: $144,240 ($2,404 x 60 months, interest earnings paid the rest).
Finance cost of second truck: $0.00 (no loan needed, you are paying cash).
Note that in dollar terms, you'll pay less out of pocket for your second truck ($144,240) than you did for your first ($171,186) because of the finance costs you avoided and the interest your replacement truck savings earned over the 5 year period.
----------------------
Is this realistic? For some it is. For some it is not. To find out if it is realistic for you, run the numbers and adapt them for your cirucmstances: actual truck cost, personal non-business living expenses needed, truck life cycle, etc.
My ONLY point here is to show how truck replacement costs can and should be worked into an expedier's business plan. It is an imprecise and incomplete example. Variables abound.
For example, a personal decision can be made to finance half of your next truck instead of paying cash for all of it. The interest rate offered on a truck loan varies from driver to driver. Insurance cost are not even mentioned above, neither is depreciation. A host of tax considerations also apply.
Once again, this is an imprecise and incomplete example, and my ONLY point is to show how truck replacement costs can and should be worked into an expediter's business plan.
(Numbers derived from Texas Instruments financial calculator and Microsoft Excel spreadsheet. Note that numbers can vary due to rounding and payment assumptions (end of month, beginning of month).
Two additional items to consider but not mentioned are the value of the first truck at time of trade in, or sale. If it runs, it will have some value. Maybe a little, maybe a lot. It will make a difference on your second truck.
The other issue not mentioned is the type of loan.
There is a huge difference when looking at whether it is a simple interest loan, a frontend loaded interest loan, lease, trac lease, a balloon loan ect.
Very critical to understand how these work. Many types of loans will always have you upside down in the loan until the very last stages.
Do everything you can to understand what you are buying and how exactly you are paying for it.
Davekc
owner
21 years
The other issue not mentioned is the type of loan.
There is a huge difference when looking at whether it is a simple interest loan, a frontend loaded interest loan, lease, trac lease, a balloon loan ect.
Very critical to understand how these work. Many types of loans will always have you upside down in the loan until the very last stages.
Do everything you can to understand what you are buying and how exactly you are paying for it.
Davekc
owner
21 years
HI
ATEAM thats a fine thought just one problem nobody knew fuel prices were going to triple.That is our largest expense usually about a third of your total expense.Last year my monthly fuel bill and my truck payment were the same.This years fuel bill is double the truck payment.Im only making it because I have small household expenses and have had no break downs.And to make it worst my 19 year old makes more than I do and he has benefits.
I see only one solution and that is to double the fuel surcharge.The fsc kicked in for me when fuel went over $1.30 and now fuel is $2.50 but fsc is the same. Saying no to cheap freight means saying no to anything with less than a .20 fsc for a van. Thats eliminates 90% of our customers. The other posssibility is states dropping the fuel tax which some did after 9/11 but by 1/1/02 they had all reset it.
Now don't get me wrong I'm not being sarcastic or anything like that it just a bad situation and unfortunately it is effecting us worst than it is others.
I was warned about this about 5 years ago but a strange source (a rabbi) guess I should of payed more heed. I hope things change and we all go back to making a living and then prosper. But I don't see how.KEEP TRACK OF ALL YOUR EXPENSES AND KNOW WHEN TO SAY WHEN! REMEMBER THE NEW BANKRUPTCY LAWS ARE COMING INTO EFFECT SO DON"T GET DRUG DOWN TO FAR!
ATEAM thats a fine thought just one problem nobody knew fuel prices were going to triple.That is our largest expense usually about a third of your total expense.Last year my monthly fuel bill and my truck payment were the same.This years fuel bill is double the truck payment.Im only making it because I have small household expenses and have had no break downs.And to make it worst my 19 year old makes more than I do and he has benefits.
I see only one solution and that is to double the fuel surcharge.The fsc kicked in for me when fuel went over $1.30 and now fuel is $2.50 but fsc is the same. Saying no to cheap freight means saying no to anything with less than a .20 fsc for a van. Thats eliminates 90% of our customers. The other posssibility is states dropping the fuel tax which some did after 9/11 but by 1/1/02 they had all reset it.
Now don't get me wrong I'm not being sarcastic or anything like that it just a bad situation and unfortunately it is effecting us worst than it is others.
I was warned about this about 5 years ago but a strange source (a rabbi) guess I should of payed more heed. I hope things change and we all go back to making a living and then prosper. But I don't see how.KEEP TRACK OF ALL YOUR EXPENSES AND KNOW WHEN TO SAY WHEN! REMEMBER THE NEW BANKRUPTCY LAWS ARE COMING INTO EFFECT SO DON"T GET DRUG DOWN TO FAR!
the price of diesel fuel jump 12 cents in 24 hours
i think maybe go drive for waste management if i want to still drive when this van is out
stop to get fuel sat and got fuel 5 min's before they raised the price 7 cents they had to wait for me to finish pumping before they could raise the price
i think maybe go drive for waste management if i want to still drive when this van is out
stop to get fuel sat and got fuel 5 min's before they raised the price 7 cents they had to wait for me to finish pumping before they could raise the price
Broompilot
Veteran Expediter
Great Question and the same goes for all of the answers. I would like to comment later when I can read all of the answers but so far very intresting especially for Newbees.