January 15, 2005
Howdy Drivers!

Well, this month let’s talk about becoming an Owner Operator. There are several ways to purchase that dream truck. Probably the easiest would be to buy one though a company that you drive for. This can be a good way to get started in your own truck-as long as you’re aware of a few hang-ups and pitfalls.

First most companies will not let you purchase a company truck until you have driven for them for at least 1 year. Next, you will have to pay the truck off before you can pull it from that company and move on to another company. Beware of walk away lease purchase agreements! With this type of agreement, you never really own the truck and if you decide to walk away from the agreement, the company can take all your escrow funds to restore the truck to new condition. Sometimes this can result in the forfeiture of a lot of your hard earned money.

What is escrow? Well at the time you agree to purchase the truck, most companies require a deposit of $500 to $2000.00 is placed into an escrow account. Additionally, some carriers will even require a percentage of your settlements be added to your escrow until you reach a total dollar amount. With my first truck, I had to contribute to this fund until my escrow reached $5000.00. But, there is a good side to these escrow accounts. A reputable company will allow you to use the escrow to make repairs to your truck, or sometimes even buy tires. Of course you will have to rebuild your escrow anytime you withdraw money from this fund until your total saved is back up at the set dollar amount. Also keep in mind that with some carriers, at licensing time, your base plat fees will be charge to your escrow account.

Remember earlier when I used the term (lease purchase/walk away program)? Well, a few companies will let you buy into a truck that is leased from a finance company. At the end of the lease payments, these plans often have a balloon payment that’s due that usually represents a pretty good chunk of money to get the truck title free and clear. These programs are trouble because when the leases are satisfied, the truck is too old and has too many miles on it. Often, if you keep the truck, you'll have to move to another company because now your truck is “too old” for the carrier you are currently leased to.

Another approach to becoming an owner operator is to purchase a truck from Select Truck Sales. This isn't all that bad of a way to get your first truck, as long as your work record is good and you have a good credit record. I think that the bottom line here is that it offers a lower truck payment. Remember its best not to have a truck payment much over $1300.00 per month for X number of months. Sometimes you might even be able to purchase an extended engine warranty through this program. Drivers should always remember though that you’re buying a used truck that someone else has driven and run the miles up on. Most of these trucks have between 300,000 to 500,000 miles, and at the worst, the engine will be out of warranty. But you can have the engine manufacture inspect the engine and purchase extended coverage on the engine. This will usually cost from $1,000.00 to $1,600.00 for an extended engine warranty, but an “inframe” rebuild on that same engine could cost $6,000 to $8000.00. Or, in some cases more! Obviously the warranty is a pretty good deal.

The final way to get your own rig would be to buy a new truck. Now we’re really talking big bucks! First off, you’re only buying one truck, so you’re not getting a discount like a trucking company would. Many dealers offset this by usually buying their sales lot rigs in groups of ten or more trucks. Usually by buying their rigs in quantity, they still receive some discount. Once you arrive on the sales lot (and this could be fun or a new experience!) you'll be asked to choose what color of truck you want to own. You’ll also choose other details, also known as “spec’ing” that cover everything on your rig-all the way down to the tire size and tread pattern. Or, some drivers keep it simple and just buy a fleet spec’d truck. At any rate, buying your truck off the lot, it’s going to cost you $10,000 to $30,000 down and your truck payments are going to be around $1700.00 per month. You’d better not have a heavy debt load or any amount over $1,700.00 per month and you won’t see another day off again for the next 5 years!

Just for your information, my first new truck, that I special ordered cost me $118,000 total. And this was after various manufactures discounts and rebates. My payments ran around $1895.00 for 5 years and that was with a $30,000 trade in on my 89 Peterbilt. (That’s just an example to give you something to think about.)

Now keep in mind that the above information is just a rough sketch of what to expect and companies are constantly changing polices trying to make the carrier attractive to new drivers. Unfortunately in the current trucking climate, they can only offer so much to a driver and what they add to a compensation plan here they usually take away somewhere else.

Next month I’d like to help everyone who is interested in knowing how to go about getting their own authority. After 24 years of driving, I’ve decided to get my own authority. I’m going to try it out there on my own.

I have many gay trucking friends with their own authority and interestingly enough, most of them are in long-time, committed, relationships. If you didn't know that they were gay, you wouldn't guess they were part of the family. They just go about their everyday lives and keep to themselves and for the most part stay away from the gay scene.

OK drivers, that’s it for this edition! Keep the shiny side up and be safe out there.


Fred is an OTR driver who has 24 years experience hauling a multitude of freight including dry van and refer. He has trucked in all 48 States as well as every province in Canada. Trucking as both a company driver and an owner operator, Fred brings to the GTA the kind of success story many drivers would like to experience including the last 15 years trucking with his own rig.
If you have a question for Fred just forward it to him through the contact page on the website.

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