Owning your own truck is almost every trucker’s dream. You have more independence as you’re essentially your own boss. Owner operator trucking rates per mile are generally much higher than company employed drivers because they can run for longer and they control their own fuel standards.
However, a word of caution: owner operator trucking is not for everyone. It’s more than a simple upgrade in equipment. It’s comparable to starting your own business. Jumping headfirst into becoming an owner-operator can have devastating results.
For one, you can suffer financial problems. To begin with, a truck is a huge investment of your savings that, on top of the base purchase, will include all maintenance costs, fueling, permits, and insurances. In all, the total annual cost of operating your own rig could costs upwards of $180,000.
If you’re not business savvy, you better start learning the basics of financing now. Maybe take some online classes and get a partner to split the responsibilities and costs.
You should also prepare personally by making plans with your family and loved ones. While you have the freedom to take on more miles as an owner-operator than a company driver, work always comes at an emotional cost. When you spend less time at home, tensions and conflicts can develop in your relationships. Try to be open about your plans with your spouse and children and discuss how they might affect your future.
Step by Step Path to Owner Operator Trucking
(1) – Start Budgeting
The exact price of freighter will vary based on the year, brand, and specs. You can expect to finance $100,000-$200,000 for just purchasing the vehicle. You need to wisely begin saving now and start paying off debts.
Having a good savings isn’t just for the purchase. As an owner operator, you’ll need to save for your own retirement and health insurance. You’ll also want an emergency fund in case of vehicle breakdowns or unexpected problems.
If you have a bad credit score, you’ll have a near impossible time finding a good lender down the road. Start fixing your credit score now. Make smart purchases that you can afford.
Most of all, be patient! It takes time to accumulate good credit and a good savings.
(3) – Seek Legal Advice
Before you get serious, get legal help to weave your way through the process completing all the necessary paperwork. This step is especially important now with the ELD mandate (which I previously blogged about in “The ELD Mandate: What You Need to Know”). You’re going to need to educate yourself on all the compliance issues involved in owner operator trucking jobs, including decals, HOS, vehicle insurance, and cabin equipment. You might find everything too overwhelming and conclude it’s not for you.
Later on, you might also want an accountant to help you budget your expenses, contact the bank, lenders, and the dealer; and advise you the best investments.
(4) – Compare Semi Truck Brands
There’s a lot of popular trucks used throughout North America. You’ve got Freightliner, Volvo, Kenworth, Western Star, and many more! How do you choose the right one for you? They each have the same functionality with similar safety and performance technology. The difference all comes down to the price. You can pay a lot more for a newer model with extra comfort and luxury amenities, though, as your first truck, you should prioritize the fuel economy and the best depreciation value.
Then, try to balance the price with the practicality of the vehicle. You’ll want a truck with a cozy sleeper, plenty of cabin storage, powerful inverter, and an automatic transmission.
Be wary of choosing a used truck with little information in the ad. Try to verify as much as you can about the vehicle’s history by directly contacting the seller. If you can, ask to physically see the truck and get a tour of the interior.
As you’re searching online, look for holidays deals around Christmas and Labor Day.
Finally, get a reliable quote and set of finance options.
(5) – Find a Lender
You’re not going to be able to fork over the full cost of your semi truck in cash, so you’ll have to find a reliable lender to credit you the money. Some lenders are highly skeptical of owner-operator trucking businesses because they often fail after only a year. So, even if you have good a good credit score, you might find a difficult time getting a loan approved by a bank.
This doesn’t mean it’s impossible. You just have to know how to present yourself and negotiate. Buying a commercial vehicle should give you greater collateral than a non-commercial one since you’re using it for business purposes. If you’re patient and confident, you should find a great deal. Be ready to present your CDL, history of driving experience, proof of consistent income, and reliable information on the vehicle you’re interested in buying. This will give your lender more assurance and expedite the process.
The lender may require you to make a down payment. Between 15-20% is usually a reasonable amount. Even if they don’t require one of you, it’s still a good idea to reduce the principal of the loan with an upfront payment.
(6) – Pay off The Truck
Once the lender has approved your loan, get a final contract from the truck dealer that details the financing options. Have your lawyers review the stipulations. When you’re ready, sign and drive your new truck home!
Then, faithfully begin making your monthly payments on time. If you’re able, pay off more than the rate to aggressively pay down the vehicle and completely own your truck.
(7) – Start Job Hunting!
At this point, you finally are driving your own truck and continuing to make on-time monthly payments – but this is only the beginning of your career as an owner operator! Next, you need to find clients to work for and develop a schedule to make a solid income.
You’ll still want to keep your legal and account advisors close at all times. If you aren’t managing your money, you’ll lose it before long. Jobs may seem great but having an expert examine the details on paper will give you a huge financial advantage.
Next, you have to decide: do you lease to a company or truly become independent and grow your chain?
Just starting off, you’re best to lease until you get a foothold in the trucking business. Leasing to an established company should guarantee you a flow of haul jobs from them.
Obviously, you don’t want to lease to just any company. The best owner-operator trucking company to work for should have an established reputation with years of business experience. Remember: you’re leasing to them, so you should have the negotiating power. Don’t get sucked into a contract that you don’t fully understand or receive a clear return on your investment. The company should already have experienced owner operators in their fleet. Do some snooping and ask the company’s existing owner operators for their opinions and experiences.
Then, you should determine what kind of hauls you prefer. Find owner operator jobs in a niche that fits your schedule. You might want to study the transportation market and see what trends are growing in your region. Whether the demand is for agriculture, automotive, or wholesale merchandising you want to be in the know. On the other hand, you want to know what markets to avoid because they are too competitive or low paying. Think of how you want to brand your transportation business long-term. The kinds of trucking jobs you take reflect your image.
If you want full business independence, you should try to connect with like-minded associates and build strong partnerships. Eventually, you can pool resources and have a small fleet of 3-10 vehicles. Then, you’re well on your way to dominating a small, local market and working your way to the big leagues!
Critical Supply Solutions: Hiring New Owner Operators
If you’re looking for owner operator trucking jobs, we are always seeking experienced drivers of any background. We have a flexible and management team that puts you first in everything. Plus, you’ll have the opportunity to enjoy generous sign-on, referral, and safety check bonuses.
The application process is simple: just click the “apply now” button on the top of our website’s homepage or call to speak to one our recruiters.