Becoming an Owner Operator – Finding a Truck
So you want to become an owner operator in the transportation industry?
First of all, we want to make a very important assumption before we proceed any further. We want to assume you have been a company driver and therefore know at least a little about freight and the day to day running of a truck. We are going to assume you know about inspecting your truck and about logs, or e-logs these days.
If you have NEVER driven a truck before as a company driver then we DO NOT recommend starting out as an owner operator. Like we said above baby steps. If you want do become an owner operator start out as a company driver. We don’t care about how many owner operator wanted advertisements you have seen. Start as a company driver and then move on to an owner operator if that is what you want.
How long should you be a company driver before you become an owner operator? We would suggest at least a couple of years so you can get an idea about how freight changes and what it takes financial to keep a truck in good working order. As a company driver you should take notes on everything that is spent to keep your company truck road worthy and safe. As an owner operator those will be your expenses. Just remember that.
Use your time as a company driver as a test and training period to simulate being an owner operator without having all the expense and worry of being an actual owner operator. You might find being a company drive is not that bad after all, especially if you have benefits like insurance.
We are not trying to talk you out of your dream of being an owner operator and in truth you can make a lot more money as an owner operator, just make sure you understand it is a business and sometimes things go wrong. You have to be prepared.
Let’s start with getting a truck, assuming you do not already have one.
You have two primary options, you can purchase one from a dealer or individual or you can lease purchase one from the company you are leased on to or an outside leasing company.
The lease purchase option is easier BUT most lease purchase programs SUCK and they make it very difficult for you to make money. Here’s what you need to know in a nutshell.
- How much will your WEEKLY truck payment be? Not monthly, weekly.
- Multiply your weekly truck payment by the number of payments. One sure sign your lease purchase sucks is if you end up paying $140,000.00 in payments for a truck that is worth $60,000.00 when you bought it. Perhaps we exaggerate a little but we think you understand what we mean. Expect to overpay for a lease purchase truck, that is pretty normal, but you should not have to pay double!
- How much is the maintenance escrow each week and what does it cover?
- How hard will it be to get your maintenance money out if you need a repair?
- Do your repairs have to be done at a certain place?
- Is there any warranty on the truck and what does it cover.
- Do they have the maintenance records on the truck and will they give them to you?
- Are tags and 2290 included and paid by the company or lease purchase company?
What about purchasing from a dealer or individual?
You can get a better deal from an individual but might have trouble getting bank financing. A lot of lenders do not like the transportation industry. Purchasing from an individual can also make it difficult to know the true maintenance history of the truck, even if you are given a copy. You really need to know why the individual is selling the truck. Even then you will have little or no recourse if you are lied to about the condition of the truck.
Buying from a dealer, especially if they offer financing help, can be a better way to go. Typically a reputable dealer will want to make sure their customers are satisfied. They should also have better maintenance records available and let you know what they found when their mechanics went over the truck. Another advantage to a dealer is you are more likely to get some sort of warranty. Even without a warranty if something major goes wrong that they should have known about a dealer will be more willing to talk to you. Not saying it will help but at least with a dealer if you have to get a lawyer involved the dealer is easier to find and has more funds than most individuals.
If you can afford it we highly recommend buying trucks with less than 400,000 miles on the engine and if the engine has been rebuilt find out who built it and get a copy of the repair invoice. We also recommend not buying a truck with over 500,000 on the transmission. Again, if it has been rebuilt, find out who rebuilt it and get a copy of the repair invoice.
We recommend you verify all major repairs with whoever did the repairs. Contact the shop and ask questions. If you have the receipts this should be easy. See if they remember the truck and know of anything else that might be wrong. If you have the truck in your possession and are close to the shop that did major repairs take it in and let them look over it. You might be surprised by what you can find out by accident.
The three biggest things that will decide your success early on is picking the right truck, understanding the finances of being an owner operator and being leased to a good company. Screwing up any of those can lead to failure. No pressure, right?
Don’t worry, we are here to help. Keep checking back on our website for updates. If you have any questions or comments, please leave them below. We love to hear from our visitors.
If you already have a truck and are looking for a good company to lease on to you do not need to search the owner operator wanted or owner operator driving jobs boards, we can help. From time to time we recommend a company or two that meet our guidelines.