Becoming an Owner Operator- The Good, Bad & The Ugly | (Lease vs Finance, Dealers, Lease-Purchase)
VloĆŸit
- Äas pĆidĂĄn 11. 07. 2024
- The three most common ways of becoming an owner operator are financing a truck from a dealer, joining a lease-purchase program from a carrier, or buying a new or used truck up front.
So what should you do?
In this video, Ronen goes over the pros and cons of leasing, financing, and buying, also explaining what his recommendations are for drivers in different circumstances.
Do you have any other tips to add for new owner operators out there? Leave a comment down below!
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Chapters:
00:00 Introduction
02:12 How to finance a truck
02:43 Financing pro #1: you're not tied to a single carrier
02:56 Financing pro #2: there's no big buyout at the end
03:15 Financing pro #3: you can pay off your loans early
03:25 Financing CON #1: you need good credit to finance
03:35 Financing CON #2: you might need more money upfront
03:46 Finance companies want a higher down payment on used trucks
03:56 Financing CON #3: missing payments can affect your credit
04:13 Financing CON #4: finance companies will come after your assets
04:42 Financing CON #5: banks don't care if the lease terms aren't viable
06:07 WATCH: How to spot red flags in a lease purchase program
06:27 Leasing PRO #1: carriers don't care about your credit
06:49 Leasing PRO #2: you can get cheaper shop rates from the carrier
07:31 Leasing PRO #3: flexibility on the down payment
08:02 Leasing PRO #4: less waiting time than financing
08:31 Leasing CON #1: you are tied to one single carrier
08:56 Leasing CON #2: some carriers have rip-off terms
09:32 Leasing CON #3: your mileage is in one carriers hands
10:41 Purchasing a truck outright is the best choice out of the three, if you can afford it
11:05 Finance if you have credit and the down payment
11:25 Be aware of dealer's finance interest rates
12:54 Lease the truck when you lack down payment and have bad credit
14:39 Research the carrier before leasing
I bought a 2006 freight liner Columbia in 2017 for $20,000 cash, had 497,000 miles on it. Put 20k into it the first year and about 10k/year after. Been making 25-40k/month since as well. Have 3-4 trucks now grossing $1,000,000/year now!
When you bout the 2006 truck, didnt have a lot of mechanical problems? What 10k/yr paid for? Is this maintainace?
These numbers didnt adds up. How come you made 1000,000k /yr on 4 trucks make you 40k/month, this is 480k/yr. Assuming that the drivers who operate these trucks were not paid. The labor cost per truck is 100k per yr.
@@MB-qz7xb I did Uber eats for a month, made 80 bucks a day. I grossed over 20,000$!!!
@@MB-qz7xb 480 times 4 trucks duh.. Lol.. He said his one truck gross 20 to 40k..
Buying a 2006 truck is a risk, you just got lucky I'm not gonna encourage people to buy a truck that less than 5 years
So glad I came across this channel. My husband is a truck driver (a year in the industry) and he is pushing hard to become an owner operator. I am not experienced in this industry but I am happy to learn all I can to help him succeed.
**********Awesome wife alert********
Youâre a good wife
Good wife
@@petitwonders928 LOL!
to steal from Rod Stewart, some guys have all the luck. He's lucky to have you supporting the dream and holding down the fort.
Had three brothers all graduated trucking school together worked as company drivers for 4 years pooled there money and bought a bran new Ken-worth and ran as a three man team with one home a week as the others on the road. They bought a SUV and would keep the truck on the road and they would drive and meet the truck where ever it was.
Someone should have told them itâs entirely unnecessary to buy brand new.
@@mr.butterworth4216 Iâm new to trucking and Iâm looking forward to getting a CDL. Why is it not necessary to buy a new one?
Wisdom
@@mr.butterworth4216 take on problems buying a used truck ? Plus the way the market is today used trucks are way over priced.
That sounds fucking sick asf wtf.đ„
Its nice to see someone taking the time to help the driver. Thank you!
Your doing a great job and a much needed service to the trucking industry. It's nice to see real men step up and give the facts and practical help that many require.
My man!!This videoooo!!Wow, No BS, Straight to the point exactly as it is! Thank you for answering many many of my questions without asking you! Great job
By watching this video and reading all the comments below I think that fianaceing from your local credit union or bank is the way to go.. If you lease from a carrier you can't move if the loads are slow. You have to tough it out during the slow period. Meanwhile your not getting any miles or freight but you still have to make the lease payments you sign a contract to pay. Plus all of the bills you got to run your home. It's not cool during the slow period after everything is said and done bringing home 400.00. The lease company gets there money off the top. And don't go on vacation for a week or so that will really put you in the hole because when you return you have to still pay that weekly lease payment. If you have bad credit take a year or so to rebuild it. In the meantime try to save as much as you can even if it's 3,000 that can pay for your tags or permits. Learn all you can about buying a truck and how owned operator work. Pull one of the old veteran drivers to the side and ask them for advice and what they recommend you do. Knowledge is everything truckers. I hope I was able to help one or two of you guys out.
Thx man! I Needed this
Then become your own dispatcher.just lease the vehicle and run it under your own authority .
Thank you
Best trucking channel by far. Thanks for all the great content!
Owesome advice !!! Thank you !!! Youâre doing a great job with all these explanations!!!! God bless you !!!!
Really appreciate you doing this video. Very helpful.
Great advise. Am looking forward to being a trucker.
Don't lock into a deal where the other party makes money when you fail.
Absolutely. everyone needs to benefit.
The soothing music in this video calms the inevitable and terrifying realities of all these deals.
I love your videos they are greatly appreciated
Another valuable video!!! Thank you!!!
THANKS!!! Very helpful.
Thanks for the infoâŠit was straight forward no bullshit
Damn I stay watching your vids brother, thank you for all the free game
thank you i appreciate your recommendation
Thks for this video! I have learned alot
Thank you. Am debating on lease. Needed the information.
Thoroughly enjoyed this video! Tyvm
Glad you enjoyed it!, many more great videos coming up.
Thank you and very informative
Glad it was helpful!
Thank you for the help!!!
Great info!
Love your channel
Same with cars. No payments. Don't live above yours means. Buy the truck cash. It don't have to be 120,it can be 25-40k. Just have aside some cash for repairs.
@Bruco 27 how? Their both mechanical. Don't let the loan sharks beat you.
A truck is a tool whereas a car is a luxury. Now in an ideal world anyone who wanted to could buy a truck outright. Thatâs just not a realistic scenario for the majority of people. This is where I agree with your comment about living within your means. Iâm not suggesting that a person who has to use credit and/or get a loan is living beyond their means or is unworthy of owning a truck. Depending on your financial situation, your knowledge of finances and your business game plan, an argument could be made that purchasing a truck outright would not be the best decision.
Iâm saving up to buy a brand new kw and pay for that and all the start up costs outright. Itâs a monumental cost of $250k to $300k (usd), but it puts me in the best position for success. Iâm a single guy with minimal bills and making good money on a dedicated account, so I think Iâm in the most ideal position to make it happen.
@Moonlight Because you know what you get brand new. You know how the truck has been treated, how itâs been maintained, and you can catch the little quirks and problems before they become big issues. You also have a warranty to cover any major issues like the engine blowing out or the electronics kicking the bucket for a certain period of time. In theory the truck should be good with little mechanical issues for the first 200,000 miles. In reality, you could always end up with a lemon, or it could be mechanically sound for more or less than the 200k miles. The big thing is that it should give you time to make money; by the time the warranty is expired you should have enough invested in your business to not only cover any mechanical issues, but to replace the truck outright if needed. My problem with used is that there is a decent chance that you can end up buying a basket case that upon initial inspection looks mechanically sound and like a good deal. Iâd rather pay the high premium up front for a truck thatâs going to work without issues for the first few years rather than snag a deal on a used truck and pour all of my profits into keeping it running so I can stay in business.
Im buying my truck in cash 169k . I already pre ordered it through kentworth. I got a lawsuit settlement and decided to invest in a truck.
Whatever floats your boat if itâs your dream truck, but dropping $169k is totally unnecessary to get a really nice truck that makes money.
Donât do that.. get u a used $30k truck and go from there
This guy is thinking smart.Buy new ,make money off that truck ,once warranty is out at about 200k miles sell the truck and replace it with another new one đŻđž
Me too fam, thanks for the motivation
Mr. You are the best person in this industry, I'm from Bolivia, some day I'll want to for your company... Thank for all your videos and al the real I information... God bless you..
đđ©If you need information on this .
Good stuff bother thanks
Thank you very much for the Video.
I requested, you made it.
Also, great Video as Usual â€ïž
Thanks for the idea!
@@NorthAmerican-Trucking-News also, Thank you so much for Mentioning my Comment in your Video. âșïžâșïž
Thank you for information
this video is very helpfull and honest im an owner operator and this 2022 has been ridiculos rates are paying half what they did in 2020 and 2021 and fuel and other expenses almost triple cant turn a profit the last 6 months
You are amazing Rispect đ
Thank you so much đ
Good Job Thanks!
Sir thank you very much for this video. I'm really very much interested after watching this video to become a driver in Et-transport. If possible really i want to grab the opportunity from the Et-transport. Anyway thank you again stay safe. Much love from Philippines.
Thank You!
Love this video
thank you
Good video. I hope you touch on leasing from a leasing company ( not a trucking company with inhouse financing )
thank you very much for doing these types of importand valuable vedios loves your vedio a lot i am from srilanka
Very good videos
I always watch video uploaded from ET Transport. I like their video. They share their experience to other. I really appreciate that. I am very interested to work with ET Transport as a owner operator. But I got my AZ few months ago. They are not going to accept new driver. Where should new driver go?No one going to accept new driver!!!
Thanks ET Transport
This is gold
glad you like it.
_Stevens Transport does something like this, once the truck you are lease purchasing which happens to be brand new with Stevens Transport, hits 500,000 miles they will not allow your paid off truck that has 500,000 miles to pull any of their loads, you have to start the lease purchase over again with a newer truck; so you either have to find another company that will except your truck with 500,000 miles or lease purchase a newer truck_
Understand your personal circumstances..research...choose your journey...And Do it to it!!!
I really enjoyed this video, and although I am not a Truck driver, I do enjoy it the savvy analysis.
I am looking into possible getting my CDL, hence why I am watching this video.
If you could please reply to this message , and give some rules of thumbs, DOS and don't, pros and cons for someone who is thinking about becoming a Truck Driver.
For a fresh driver, is it better to work for a company or become an owner operator right away?
What kind of truck or engine is recommended for a new driver?
Does a new CDL Driver only need the tractor/bob tail to hail the loads or does he need full tractor and trailer?
Mileage pay vs percentage pay?
What's better? And does the driver actually have a choice in picking which one?
CDL TRAINING SCHOOL vs on the job training with a trucking company?
Which is better?
Does the type of truck type make difference on how big or how little you get paid? Example, flat bed, Refrigerator truck, or dry cargo truck?
What territory or regions are better for new drivers with zero experience?
Example, I am from TN. Should I go to far away regions starting out or stay within my region?
List companies for OTR drivers?
How do I get another load from a different city on the way back?
The platform or biddings for loads.
Sorry for all the questions, but I am really curious, and need all the information I can get my hands on, before I even start.
The rich stay rich by spending like the poor and investing without stopping then the poor stay poor by spending like the rich yet not investing like the rich
You're right sir, Thanks for introducing me to Mr Smith. People remain out of ignorance
People are scared of investing because of the high rate of scam in the business
@@sumaiyyaadam6483 There are scammers but real brokers are out there for investors
@@sumaiyyaadam6483 Mr Smith Logan is legit and he's methods works like magic. I keep on earning every single week with his new strategy
@@uzairumuhammad4266 Wow, I'm just shock someone mentioned expert Smith Logan, I thought I'm the only one trading with him. Mr Smith helped me recover what I lost trying to trade by myself
Good video, but I never anybody mention anything about taxes. This can be a real pain if you don't keep on top of it.
Awesome video brother. What about leasing from a dealer like SFI but you have your own (NEW) authority and wont be tied down to any particular carrier? Would it be feasible at that point if you cant come up with the down payment?
Excellent video. The quality of information is second-to-none! Thank you
Glad you enjoyed it!, many more great videos coming up
thank you
Never take on these lease scam programs. Stay on as a company driver and save up until you can buy your own truck
Lease purchase programs arenât all scams, but the operator definitely needs to know what theyâre getting into, and know whether or not theyâre cut out for it. But Iâd agree, saving up and buying a truck is the best option, keeping your overhead expenses very low.
Good idea genius
You guys a losing so much money. Thatâs why You sign walk away leases until you can finance a truck or buy cash. I make $5k/7k a week after tax and expenses as a trainer & I can turn my truck in anytime I wanted if the market collapsed or something. Walk away lease is the way to go
@@BriskyJamwhich company you leasing from
Thank you for the inf.
Any time!
Best trucking channel so far.thank you !
Please make a video about hazmat tankers & ODC PULLER truck driver jobs , salary.........more details
When I start driving Semi trucks I'm gonna buy a Brand new Peterbilt full cash at the Dealership and become my own boss. The best advice is to gain that full 5 years experience and really know how the the Trucking industry works, once you have at least 5-10 years experience you can get a job with so many companies.
Peterbuilt...an absolute tank! Good choice.
Easy to say that now,see you at 5 years
Blah blah blah, thatâs easier said than done.
Paid $15k for my 98 FLD 120. Put in another $10.... Been trucking 5yrs with very few issues. I am not going.$170k in dept, that's madness. I don't know why he didnt give cheap used truck as an option. Or used gliders.
Wow only ten dollars put in u r lucky bro
Good video, and very true, and sadly very common, the ugly side that is.
If you are going to buy a truck, pay cash, find an older truck EGR or non emission truck that has been well taken care of, they are out there. My buddy picked up a very nice Volvo, he paid $15,000 with 500,000 miles on it. He has had to do very little to this unit, and it is returning him 8+ mpg all day long. Don't get locked into something, because then you are a slave to the lender and have to work no matter what to pay that note. I have no clue how these guys make it with $3000+ monthly truck payments. Sure, the rates may be good now, but in a year from now, a good rate may be $1.30 a mile. Don't be that guy. You want freedom? Every truck owner states that... Baby, you ain't got no freedom with a truck note. And you still have to fix and repair the truck, running or not. And he is right, the lender does not care.
And if you buy an emission truck, you better own tools and diagnostic equipment, because the dealers will clean you out and put you in the poor house. I have seen it more times than I can even remember. And I am not talking about doing your own servicing, brakes, etc. Nine times out of ten, a good shop can do that kind of work properly and cheaper than what you can. I'm talking having the computer diagnostics on board to trouble shoot those bad sensors and emission faults. A dealer will throw tens of thousands of dollars at your truck and never fix it. You will be out $20,000 and still in limp mode, seen it a hundred times... You know what the issue normally is, a $100 sensor or a dirty EGR valve, something I could easily diagnose sitting here in this truck stop and repair on the spot. You know how? I have the tools and diagnostics.
Great comment
Do you mean like some of these hand held diagnostic tools that plug in?
Great information &, channel. The background music is super distracting
question im trying to lease truck then buy out but working different company then i want to start working my own mc dot cani switch lease to my own authority??
I've been driving for over 20 years. I've never seen anyone blow a motor. I'm sure it happens, but it's rare. Moral of the story kids. Don't start a business when your broke, and have been a loser all your life and now you have bad credit. The longer you save taking care of your money, and building assets the more likely you will be able to buy outright. The risk will be lower. Why anyone would start a business upside down, your just asking to be taken advantage of. There are a lot of jobs out there. Go do that till you can afford to be an O/O, and do it right the first time. Leasing on to a company as an owner operator is an oxy moron. You drive a truck that you don't own. That you have all the responsibility for. While working for a company that you are, in all but the name.... an EMPLOYEE! If you are a company driver making 4k 5k a month (which is a good wage) and your expenses are 4k 5k? You have no business starting a business....STOP and reassess yourself.
that i agree with.have a real business plan.
Good advice, just remember whatever you are buying or leasing, have a plan. I never had any idea why any body would lease a truck thru a carrier, if you go to a dealership and buy or lease the truck goes with you. If you lease from swift when you leave your iron stays.
Of course the best way to be free of any overhead carrier is to get your own authority. It costs more but you are also getting 100% of the load's value as opposed to a flat rate or percentage of linehaul.
@@Urziel99 I still have my authorities both direct haul and thru brokerages. I was referring to leasing a truck from a company is like taking your sister to prom. You wonât get much out of it in the long run
Can you lease a truck at a dealership not a carrier lease for X amount of years and change it out in a few years like people do cars?
The British transport industry is yet again complaining to the government that there is a massive shortage of drivers (this happens about every 10 years)
Iâm retired now and stopped driving for a living 20 years before retiring. The only variable in transport cost is how little you can get away with paying for the driver. The less the companies get away with paying the driver normally indicates the way they are going to treat them on a day to day basis. I never got lucky and found the company I know exist , that pay and manage the drivers like humans. I would never recommend driving to earn a living to a young person. You may think Iâm bitter about the transport industry (and to some extent you would be right) but let me tell you I had quite a bit of management experience in other areas and no where did the staff start work on Sunday afternoon and come home to their family the next weekend for less than the average pay of a part time fork truck driver, get disrespected by the employer the employers staff and the customers of said company. The disrespect starts at the top not the bottom and is seen by the whole chain has the normal way to treat drivers. Pay shit treat like shit then whine because less and less driver stay in the industry. This is the same were ever you drive USA UK EU
Driving is an excellent living. Driving trucks isn't always an excellent living. There are box truck drivers, sprinter vans making very good money. With the knowledge I have know, if I didn't have a CDL, I wouldn't consider getting one. But consider the equity you are giving away every week. Bare minimum, you are giving away $500 a week in equity to the company who owns the truck.
I'm in this situation right now. Trying to figure out the noise. Did you find out what the noise was?
What I was trying to find out, and what I wasted my time waiting for the video to address (and it never did) was the benefit of leasing a truck WITHOUT a company. For example, dealerships will lease trucks. Companies like Ryder or Penske will lease trucks. How does that compare to financing a truck? What are the pros and cons of that?
In that sort of situation, you could lease a truck from Hypothetical Truck Leasing, Inc., but then sign on to ABC Transport as an owner operator. But, if you are displeased with ABC, you could still leave there in favor of XYZ Trucking. Or whatever.
Why was this option not discussed?
Depending on your situation sometimes a lease can be better not from one of these carriers but think if you can't pay in full up front for a truck and chose finance over five six years what happens if you get sick or end up in hospital you can't work or make money how can you pay the finance company they don't care about your personal life then lose the truck and all the money you put into it with a lease again depending on the circumstances at least then you will only pay for the time you use it not for any downtime at least where I live then if you want you can save money to pay in full for your own truck without haveing to worry about monthly or weekly payments not to mention the interest you pay ontop of that
Just curious where are these good lease purchase programs?
I'm out of ottawa, how can I make this work?
If you buy or lease DON'T waist money on Trucker stuff. You don't need fluffy balls in the mirror. You don't need a 2-3000$ stereo. You don't need 2 8 inch exhaust Stag's or Chrome bling.
Have seen alot of truckdrivers go broke because the got there truck custom painted and airbrushed. Trigged put the cabin and so on. All that money could be safed for the day the truck breaks down.
What if you have a down payment of 10-20% however you have bad credit?
Anyword on the lease at AFC transportation flatbed out of Chicago? Saying $3k a week on there lease... 1 dollar buy out
Facts
Is getting a used truck not a good option? Id feel more comfortable out right buying a $30k-$40k truck and can easily make my money back while not being in debt
Hi Ronald, I'm a long distance truck driver could you please find me a job over there I'm in Kenya thanks
I like driving job
Iâve seen many of the numbers on these lease operators plans. $900 a week to lease the truck than itemizing insurance and all those things separately mean they are making a killing on the truck. In many cases they are âmehâ grade. A 100k truck would be $1500 a month or so after tax @ 6 years. Need to have a savings plan tho with doing this. Your saving $1400 a month. Put it on the side for expenses and keeping the vehicle up.
On a side note and my opinion which will get bashed. I think the volvos are some of the better owner operators options. The fuel savings alone from many of the vehicles can be huge and Iâve seen videos of a mirror camera system coming on the new trucks. We can only hope this system will record. Big deal for insurance costs.
The fastest way to go completely broke is refer. They expect you to haul their freight for .92 a mile then pay the customer to unload your truck. You make $400 on the load you pay $350 to get it unloaded.
Id only do lease again for a company if I was guaranteed $2 a mile and guaranteed at least 3k miles a week.
2.00 is low
đ€Łđ€Łđ€Ł the fastest way to go completely broke is to run for .92 a mile like a fucking idiot. I pulled a reefer, had no problem working 3 days a week and putting 2500 in the bank every week after fuel
Is leasing from a dealership is good or bad?
Is there a leasing only, not leasing to own. Is leasing only a down fall path?
Iâve been driving 2 years for a company now. An I just Tripped on this video, what are your thoughts on financing a 10 percent down truck while still working for a companyâŠ.. Just let the truck you are financing sit till you pay it off as a company driver. Any thoughts?
I feel like thereâs a risk there but not sure howâŠ
Sorry for annoying you but share some link for recruitment.
What if I buy a used truck in full cash?
My friends father bought two used trucks for under 50k âŠ.one had replace/new engine..makes over 20k after expensesâŠ..my question isâŠwhere can we find used trucks that are so damn cheap even if theyâre only gonna last few months
I pick up the truck paper and watch ebay, Facebook, and Craigslist. That will give you a good idea of where the market is for different models, mileage and condition.
Hi
Great channel keep up the transparency. I don't have good credit If I'm able can I put a larger down payment for your lease operator program? so I can own the truck sooner.
When you talk about credit is business or personal ?
Personal
The big fish always eat the little fish everyday every year since the world began, the big fish eat the little fish. Tough work as a owner operator these days, getting regulated out
I went to talk to this company and all he said was ;'if your not willing to run very hard', which at the time meant falsifying logs. dont bother. Change of tune with e-logs now!
this yt channel's company?
Another con to leasing..... some companies will force your hand to buy out your truck, or try to force you into a newer one had this happen to my brother, told the company to go to hell and bought out the truck, and coming from the states where limiters aren't a requirement, that same company wanted to put a limiter and inward camera in his truck he had 90% paid off....
đđđ
Damn.. sounds like lawsuits left an right with some of those deals.. too bad they you make sign papers first.. đđ.. great information though
BĂĄn xe Äáș§u kĂ©o cascadia giĂĄ ráș» bao nhiá»u ?
Question , how do you make money driving trucks while you get your two years of driving experience?
Work
company driver
Find a good company and work hard
Keep the left door closed and live inside your means.
the biggest downer of Trucking as an OO is the cost of repairs with all the EPA BS! they will break you faster than anything!
Iam only looking to lease from a dealership business credit . Ya man , your truck broke down what you coming to pick it up. My has been driving for 10 yrs on her birthday she made 3 payments title in hand.
I just feel like we're the slaves of bankers.
It took long enough for u to realize that bruh
You are only a slave if you take their loansâŠ
Therefore the word slave is not correct. If you voluntarily entered into a contract with a bank you can use the word slave⊠use the word stupid on yourself
What about leasing directly from the company ie volvo
That's the key to leasing, especially if you don't plan on leaving the company, and the lease is good and freight street moving, đȘđŸđȘđŸ
@@rapnamepercysnow I'm new owner operator just brought my truck completely 2013 volvo vnl want to hire drivers tho I like the idea of leasing cause you can grow your fleet quicker not have to worry about maintenance all for a solid monthly bill plus if your truck has any issue lease company will just give you another while they work on your truck so also helps in down time
@@darnelltatum7111 exactly đȘđŸđȘđŸđȘđŸ
He ready to pop off lol
I got 50k saved up looking to buy a used truck cash only 1.4 years into trucking
Good for you to have 50k savings.
2016 Kenworth t680 450hp 13 speed eton fuller cummins engine... for sale in Chicago. 525k miles. 45k
@@budalanemac3115 link to website?
@@AlexLopez-yv6rr chicago.craigslist.org/chc/cto/d/chicago-kenworth-t680/7314074201.html
I mean that truck is not mine,but have seen it on the yard... he posted for 52, but will come down to 45k you can negotiate that. He bought automatic truck now. That is what i know...