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Buying Your Own Semi Truck
July 24, 2022
Buying your own semi truck is many trucker’s dream. But many truckers think it’s a dream that’s beyond their reach. Semi trucks aren’t cheap, and having your own semi truck comes with all sorts of responsibilities and challenges that renting or leasing doesn’t.
But the benefits of buying your own semi truck can often outweigh the drawbacks. If you’re considering making the leap to becoming a true owner-operator, we’ll cover everything you need to know in this article.
Is Owning A Semi Truck A Good Idea?
The first and most important question to ask is whether it’s even a good idea to own your semi truck. It’s a major investment, after all, and once you’re buy it you’re the one on the hook for all the expenses related to maintenance and upkeep.
That’s true for a lot of leased trucks as well, but even then the owners usually throw in some nice incentives to take the sting out of maintenance costs. When you’re the owner, you’re going to miss out on that.
As long as you’re able to turn a profit, buying your own semi truck is a great idea. But the key is making sure you stay profitable. Here are our best tips for that:
Only Buy Your Truck From Reputable Sellers
First time owners often buy used trucks. They’re much cheaper, and so they can be a great way for beginners to get in the game without investing more than they can afford. But just like with used cars, you really need to trust the person selling you your used semi truck.
Ask other truck owners who they’ve bought from in the past and do your research. Make sure you’re buying from somebody with a reputation for selling quality equipment. You’ll probably end up paying a bit more up front when you do, but that’s fine. The alternative is to buy from a shady dealer and end up with thousands of dollars in maintenance costs because the used truck you bought was in worse condition then they let on.
Make Sure There’s a Warranty on Your Truck
Whether you buy used or new, a semi truck is a big expense. You really don’t want to have to pay out of pocket for unexpected maintenance on your truck after buying it. That’s why most manufacturers offer warranties.
It’s good for them and you. They sell more trucks when buyers know they stand behind the quality of their products, and you can rest easy knowing that if something breaks or malfunctions, the cost of repairs or replacement will be covered under the warranty.
Even if you’re buying used, you can usually get an aftermarket warranty on the semi truck. Sometimes you’ll even be able to get a manufacturer’s warranty on it. And, even with a warranty, it’s a good idea to have maintenance funds set aside before you buy the truck.
Some things won’t be covered by a warranty, and that includes damage caused by road accidents. Having the cash on hand to cover those repairs beforehand makes buying your own semi truck a much less intimidating process. If you have that emergency fund set up, you won’t have to dip into your earnings to pay for repairs immediately. This can help you to stay profitable when you’re getting started.
Calculate Your Cost Per Mile
The biggest thing you can do to ensure that you’re going to turn a profit is to calculate your cost per mile. That’s the total cost of operating your truck for each mile you drive. Once you know that, you’ll know how much money you need to earn per mile in order to turn a profit.
That will help you set your budget for buying your own semi truck. You’ll have an idea of how much you can afford to spend on the truck, and you’ll be able to make your purchase feeling confident that you’ll be able to turn a profit quickly.
Buying Your Own Semi Truck: How To Get Started
Once you’ve decided to buy a semi truck, you need to sit down and plan out how you’re going to do it. Follow these steps to ensure that you’re successful.
Budget, budget, budget
You can expect to pay between $100,000 and $200,000 for a brand new semi truck. Used trucks are cheaper, but you’re still looking at somewhere between $45,000 and $100,000. That’s a lot of money to take out in a loan, and you’ll want to make sure you have any existing debts paid down as much as possible before financing a semi truck.
You also want a substantial amount in savings. Having money set aside to cover maintenance, operating costs, and even basic living expenses while you get your new self-owned trucking business up and running is essential.
You’re going to need a good credit score for this. Lenders aren’t very interested in giving six figure loans to people they aren’t sure will pay them back. While mortgage lenders will just raise the interest rate, they’re taking much less risk than a lender financing a semi truck.
That’s because a house will generally increase in value, so if the owner can’t pay back the loan the lender can always put a lien on the house, or foreclose and make a profit. Your truck is only going to lose value, so the lender can only make a profit if you’re able to pay back the loan.
Find A Good Lawyer
Once you own your semi truck, you’re the one responsible for making sure that you’re in compliance with all state and federal regulations. It’s a good idea to have a lawyer who can help you navigate that.
Everything from the decals on your truck to the equipment in your cabin is subject to some kind of regulation, and you want to be absolutely sure that you’re in compliance before you get out on the road. Over time you’ll learn these rules well enough to navigate them on your own, but when you’re just starting out you’ll need help.
It’s also a good idea to hire an accountant to help you track your money. They’ll make sure that you’re paying your taxes properly and they can help you set up your budget.
Don’t Get Hung Up On Your “Dream Truck”
Some truckers have been so determined to buy their dream truck that they never even looked at other brands. That’s a huge mistake. When you’re buying your own semi truck, you should be comparing every brand out there.
This is a big investment, and you’re going to be driving this truck for a long time. You want to make sure that it’s really the truck you want, and also that you can afford it. You might have to compromise, especially on features that are wants, rather than needs.
For your first truck, fuel economy and depreciation value are probably the most important concerns. You want a truck that won’t cost too much to operate and that won’t lose too much value after you buy it. That way when you decide it’s time for an upgrade you’ll get as much value as possible out of it.
Find a Lender
This is the trickiest part. Even with a good credit score, you might find it difficult to get a loan. Truck owning is risky, and a lot of trucking businesses don’t even last a year. So, lenders are a bit nervous when it comes to semi truck loans.
But as long as you present yourself well, can provide information on your driving history and your business plan, along with a 15-20% down payment, you’ll be able to find a lender eventually. Just be patient.
Pay it Off Fast
One of the smartest things you can do after buying your own semi truck is to pay it off aggressively. Don’t settle for the minimum monthly payment if you can afford to pay more. The sooner you can get that loan paid off the better.
You’ll save money by doing it, because you’ll end up paying less in interest in the loan. Plus, without a monthly loan payment to make, more of the money you earn can be invested into your business, put into a maintenance fund, or saved up to buy a better truck eventually.
You really don’t want to find yourself still paying off the loan if your truck is totalled or if it just wears out from regular use. Having the loan paid off as soon as it’s financially possible is a huge help to you, and we highly recommend it.
Find a Job
After buying your own semi truck, you’re responsible for finding your own work. You can lease out to a carrier, or remain truly independent and line up your own jobs. It all depends on what you want to do.
Leasing with a carrier can feel safer and steadier, but remaining independent can often generate more profit over time. Both approaches have their pros and cons, and you’ll have to decide for yourself which is best for you.
Buying Your Own Semi Truck: How To Pick A Truck
Picking the right truck might be the best part of buying a semi truck. While you’ll still be limited by your budget and your specific needs, you’ll have a lot more control over choosing the truck you drive than you’ve had before. Here are the things you need to consider when choosing a semi truck to buy.
New vs Used
The first decision you’ll have to make is to buy new or used. Used trucks can be significantly cheaper, but there’s a reason for that. They’ve already go a lot of miles on them, and you don’t really know how well they’ve been maintained.
Even a used truck that’s been kept in perfect condition won’t last as long as a new truck, either. There’s a limit to how many miles you can put on any truck before it’s going to be too old and worn out to maintain.
A new truck has a lot of advantages. Since it’s never been used, you can expect many years of service from it. Plus, it won’t need significant maintenance for a while, which gives you more time to build up a maintenance fund. It will still be under the manufacturer’s warranty, too.
But a new truck can be 2-4 times as expensive as a used truck. It is a business expense, and many new truck owners decide it’s worth it, but others find the cost too high.
Do You Need A Sleeper?
The next item to think about is whether you need a sleeper cab or not. If you’re a short-haul driver and you’re home every night, then you don’t need to spend the extra money for a sleeper cab. You’ll be just fine with a day cab.
But if you plan on driving long haul overnight jobs, you really need to get a sleeper cab. You should also get the sleeper if you want the ability to work overnight jobs, even if you aren’t planning on working them right away.
Manual or Automatic?
It’s no longer the case that every semi truck has a manual transmission. Automatics are becoming more popular, so you need to decide which you want. Automated transmission are typically more efficient, and they’re easier to learn.
But many truckers still prefer manual. It gives them more control over the truck’s performance, especially in wet or cold conditions.
What’s the Most Important Thing To You?
One of the best things about buying your own semi truck is that you get to choose your own truck. So, even if you have budget constraints holding you back from buying your dream truck, you should make sure that you really love the truck you end up buying.
The best way to do that is to figure out which truck’s features is most important to you. Is it the way it handles? The way it looks? How comfortable the ride is? Fuel efficiency? Whatever it is, make that a priority in your decision making. Then, using that as your criteria, buy the best truck you can afford.
Buying your own semi truck can be a great way to boost your career. It gives you a lot more freedom in your work, and you’ll be able to build equity in your truck just like you do in your house. It can seem like a daunting task, but don’t let yourself be held back by fear.
Armed with these tips, you know everything you need to know about buying a semi truck for yourself. As long as you know how to turn a profit, you’ll be fine. Choose the features that are most important to you, secure a loan, and get shopping.
About Booker Transportation
Booker Trans is 100% Owner Operator. It is our belief that an Independent Owner is the best way to get a customers freight delivered timely and safely. Booker is a leading Refrigerated Carrier providing the best lease options in the industry for today’s Owner Operators. Monthly and Yearly Awards, Longevity Bonuses, and the Free tires for Life of Lease Program, are just a few examples of what Booker Trans offers the Owner Operator. Booker Trans has built it’s success upon working partnerships with Customers, as well as Agency Relationships built over the last 20 years. Those same relationships are what makes consistent year round freight possible.
Are you interested in becoming an owner operator driver or getting into the logistics industry?Let’s connect!