Are you considering making the jump to owner-operator and buying a truck? Purchasing and running your own truck is an expensive commitment, but the sense of freedom that comes from being your own boss is an appealing reason to make the leap. If you’re thinking about purchasing your own truck, here are some things to consider to help you make the right choice.
Ask yourself the following questions before purchasing a truck:
1. What kind of work will you be doing?
Consider the types of loads you want to carry, the weight/height requirements, what lanes you want to run, how long you want to be on the road. These are important questions to figure out beforehand. For example, the type of loads will help determine what kind of truck to purchase, and your preferred lanes will determine things like emissions testing (different states have different rules and regulations).
2. What’s the best truck in your price range that will serve your needs?
This is where you should spend the bulk of your time. Selecting the right truck is the biggest decision you’ll make since purchasing the right or wrong truck will determine your success.
Buying a new truck is going to be significantly more expensive than buying a used one, but most new trucks come with a full warranty. Buying a used truck will get you into the owner-operator world for less upfront cost, but it may cost more in maintenance. Just make sure you explore both options for the one that’s best for you.
3. How are you going to get paid?
Decide if you’re going to lease onto a carrier, if you’ll negotiate your own loads, or a combination of both.
Do your research before leasing onto a carrier. Make sure they have a good reputation and credit rating. Read online reviews from other owner-operators and find out what kind of benefits they offer (health insurance, retirement plans, vacation time, etc.).
If you’re going to negotiate loads, you’ll have to get your own authority first. The Owner-Operator Independent Drivers Association (OOIDA) has a handy guide to walk you through the process, or check out our blog. The bare bones are that you’ll need to determine where you’ll be operating, how you’ll be operating, and what type of liability insurance you’re going to need. After that comes the paperwork and startup money. There are numerous permits, filing fees, and more, so be prepared by doing your research.
4. How much net income do you need to pay the bills and make a profit?
Figure out what your monthly living expenses are (housing, car insurance, internet, etc.). Don’t forget to include anything you want to go toward savings accounts (retirement, college tuition, etc.).
Based on the work you’ll be doing and the type of truck you’ll need to do it, determine your business expenses each month. Your biggest expense will be financing a truck. When you have an idea of what you’ll be shopping for, use a truck finance calculator to figure out what kind of loan repayment you can expect.
Until you’ve been running your truck for a while, you’ll have to estimate your cost per mile, but by placing some phone calls and doing some research using tools available from the OOIDA’s website, you should be able to get to something approximate to help with budgeting. Over-estimate costs to make sure you’re prepared.
Tip: Once you’re rolling, profit calculators like Kevin Rutherford’s can make quick work of bookkeeping.
5. If operating under your own authority, how will you fill your truck and keep it loaded?
One way to make sure you’re always on the road and making money is having a good load board. Not all load boards are created equal, so finding an affordable, all-in-one solution can ease headaches and simplify being an owner-operator. With Truckstop’s Load Board Pro, you’ll find the best loads with the best brokers in real time. Plus, it’s easy to use with hundreds of thousands of legitimate loads at your fingertips.
There are a lot of things to consider before you buy a truck and become an owner-operator. Rules and regulations, tax requirements, expenses, truck maintenance – the lists go on and on. Do your research and decide what’s right for you. Truckstop.com will be here to help!