When your trucking career leads you to the next step, purchasing your own truck and becoming an owner-operator, there are several things to consider before making this big step. However, the first thing you should buy would be a new or used truck. New trucks come with peace of mind as most have good warranties, and owner-operators may not have to worry about repair costs for several thousand miles – but that all comes with the price of a new truck.
Purchasing Your Truck
As an owner-operator, you have two options in buying a truck: purchase or lease. Understanding these two options helps you make the best decision for your business needs.
Purchasing
Owner-operators can buy a truck for their final investment in their trucking business. Truck costs can vary depending on the model, size, age, and other factors. The price can range between $70,000 - $200,000. Some owner-operators use financing to buy their trucks. Financing lets you take out a loan to cover the cost of the truck. When purchasing a truck, you must decide if you want a new or used truck.
New: New trucks are pristine and have a warranty that protects your investment. Some owner-operators prefer buying new to ensure they perform at their best.
Used: Used trucks give you more affordable options; while they have a lower upfront cost, you may have more repairs and spend more on maintenance because of their age.
Leasing
If you are not in the market to purchase a truck, you can lease a truck. Leases allow owner-operators to use a truck for a specific time. You make monthly payments during this contract and return the truck when the contract is up. Leasing offers some benefits, including.
· Manageable costs
· Increased flexibility
Leasing can also have disadvantages, such as some contracts only allowing you to drive a certain number of miles. This can restrict the amount of time you can work. If you violate a contract, you can face penalties.
Best Option for You
Whether you buy or lease your truck, you have a selection to choose from. Your chosen truck must meet your work needs and create an excellent driving experience. Below are some investment considerations that can help you decide whether to buy or lease.
Budget
You must figure out your budget before you decide on a specific truck. You must choose how much you can spend upfront or monthly on truck expenses. To set a budget, think about monthly income or available savings. List any upcoming business costs monthly and compare this to your monthly income. Some things to consider are:
· Insurance fees
· Maintenance expenses
· Permit and license fees
· Annual business and taxes
Features
While considering your budget, you should also consider the features you want in your truck. Each driver will have a different preference. Some features include:
· Day cab or sleeper
· Engine type
· Model
· Gas mileage
If you are a new owner-operator, a sizeable upfront truck payment could stress your business. Instead, a used truck may be the best option for you. When considering, you will need to consider the truck's age and mileage.