to say that you guy's that have been around expediting for a long period of time make enough income or profit to save for your next truck.The reason that i ask seems as though most of the companies want you to have a vehicle that is only 5 years old or less or do you just trade your current vehicle before that (say 3 years).And if you do sell early do you get a good enough trade in amount for it so that you can knock that payment down to something reasonable,so you can put it in your pocket for the next go around.
Would it be safe
- Thread starter ALVIN
- Start date
>to say that you guy's that have been around expediting for a
>long period of time make enough income or profit to save for
>your next truck.
This is a great question, however I don't think it's practical for most O/O's. I think your overall revenue would have to be so high that you are essentially making two truck payments.
Lawrence,
Expediters Online.com
-----------------------------------------
Thanks For Visiting EO!
[p]
http://www.expeditersonline.com/hotnews/sterling_eo_forum.jpg
Please Help Us Get The Word
Out About Expediters Online.com!
-----------------------------------------
>long period of time make enough income or profit to save for
>your next truck.
This is a great question, however I don't think it's practical for most O/O's. I think your overall revenue would have to be so high that you are essentially making two truck payments.
Lawrence,
Expediters Online.com
-----------------------------------------
Thanks For Visiting EO!
[p]
http://www.expeditersonline.com/hotnews/sterling_eo_forum.jpg
Please Help Us Get The Word
Out About Expediters Online.com!
-----------------------------------------
SpeedyGoLucky
Expert Expediter
In a “traditional” business model you could look at it this way:-
I have made the figures simpler than they would be in real life, but the principle is correct.
Truck Cost = $100,000
10% interest over 5 years = $10,000 x 5 = $50,000
so your monthly truck payments would be capital of $1667.00 + interest $833.35 = $2500.35 (in real life it would be less than this but never mind).
but don’t forget about depreciation, this is tax deductible, but it is also a real cost and you should treat it as such:
Depreciation @ 25%(say) over 5 years =
$25,000 year 1
$18,740 year 2
$14,062.5 year 3
$10,546.88 year 4
$7,910.15 year 5
Total depreciation = $76,258.00 = $1271.00 per month
You must include this when calculating your true mileage cost.
So if you open a savings account and put in $1271.00 per month for those 5 years, when it comes to replacing the truck you will have $76,260 + any interest earned + the trade in value of the truck you bought 5 years ago.
That way you should be able to fund your second truck and after that always have enough to replace with new after 5 years.
That’s the theory anyhow.
I have made the figures simpler than they would be in real life, but the principle is correct.
Truck Cost = $100,000
10% interest over 5 years = $10,000 x 5 = $50,000
so your monthly truck payments would be capital of $1667.00 + interest $833.35 = $2500.35 (in real life it would be less than this but never mind).
but don’t forget about depreciation, this is tax deductible, but it is also a real cost and you should treat it as such:
Depreciation @ 25%(say) over 5 years =
$25,000 year 1
$18,740 year 2
$14,062.5 year 3
$10,546.88 year 4
$7,910.15 year 5
Total depreciation = $76,258.00 = $1271.00 per month
You must include this when calculating your true mileage cost.
So if you open a savings account and put in $1271.00 per month for those 5 years, when it comes to replacing the truck you will have $76,260 + any interest earned + the trade in value of the truck you bought 5 years ago.
That way you should be able to fund your second truck and after that always have enough to replace with new after 5 years.
That’s the theory anyhow.
So if a person average about 90000 miles per year you would need to put away .169 cent per mile for the next 5 years in order to have enough to get that next truck.So is that possible or should you just keep coming out of your own pocket for the next truck.Some how it just does not seem fair if that is the case.