One approach to getting a semi-truck as an owner-operator is to buy one, whether new or old. And whether you’re a new company driver wanting to buy your first 18-wheeler or a seasoned owner-operator trying to expand your fleet, you’re surely wondering: Is buying an 18-wheeler a good investment? Thus, we have made this article to aid you. While there is always the danger of acquiring a semi-truck, there is also the chance that it may pay off handsomely.
Is Buying an 18 Wheeler a Good Investment
Buying an 18 wheeler like any other large purchase, can turn into a wise investment. This is true as long as you do your homework ahead of time to ensure you’re making the finest financial option possible for your company. You can make owning an 18-wheeler lucrative by doing a few things. This includes the following:
Buy your vehicle from a reliable dealership.
This is quite critical if you are purchasing a secondhand 18-wheeler vehicle. Buying your truck from a firm with no recognition for providing high-quality equipment might cost thousands of dollars in future maintenance and repairs.
Purchasing old equipment from a reliable firm that maintains its vehicles to high quality, on the other hand, is often the best option. It might entail paying more money upfront for the truck. However, it may pay off in the long run when you’re driving down the road in a high-quality vehicle that needs fewer visits to the mechanic.
When purchasing a vehicle, take the proper measures.
Don’t simply buy your vehicle and drive it off the lot. Make the required preparations to guarantee that you get the proper piece of machinery for your company. When purchasing a secondhand vehicle, sticking to a checklist is extremely vital.
You’ll want to do tasks such as checking the truck’s history and evaluating its present condition. This will assist you in ensuring that the used equipment is of great quality.
And one of the most crucial aspects of the truck-buying process is establishing a budget. A secondhand vehicle may range in price from $45,000 to $100,000.
New trucks may vary in price from $125,000 to $150,000, depending on the manufacturer and model. You’ll need to figure out how much of a down payment and monthly installments you can afford and the overall expenses of ownership. Purchasing more trucks than you can afford might harm your company’s profitability.
Invest in a warranty-backed 18-wheeler.
When you own an 18-wheeler, anything may go wrong at any time. This is why having a safety net in place is critical. Buying a vehicle with a guarantee prevents you from incurring out-of-pocket costs for truck maintenance difficulties.
You’ll be able to travel along the road with peace of mind knowing that your vehicle is protected. Some firms that sell used equipment even give manufacturer and aftermarket guarantees on their trucks, which may surprise you.
It’s also crucial to have cash put aside, particularly for maintenance, whether or not a guarantee covers the vehicle you buy. Before buying a truck, make sure you have a maintenance fund set up.
Major failures and pricey repairs may occur at any moment, and if you are not ready, your firm may suffer a revenue loss.
Be aware of your expense per mile.
Knowing how much you spend every mile can help you figure out how much income you need to make to operate a successful company. Your trucking company will not be successful if you make less than you spend or break even.
Determine how much the monthly payment will be before buying a vehicle (if you finance it). This amount will be included in your fixed expenses when calculating your cost per mile.
Is buying an 18-wheeler a good investment: More considerations
After considering the expense of obtaining a semi-truck and the dangers involved, you may decide that having your 18-wheeler is well worth the investment. Here are a few more aspects to think about:
Possibility of earning more money
Even though the initial expenditures of being an owner-operator are quite high, professionals who manage successful companies usually generate significantly more money in the long term.
In 2020, the median salary for tractor-trailer truck drivers was $47,130, according to the Bureau of Labor Statistics. Many of the business’s owner-operators earn an average of $250,000 each year. The most successful owner-operators earn more than $7,500 each week.
Possibility of accumulating equity
Each time you make a payment on the vehicle you purchased, you accumulate equity, much like when you make monthly payments on a property.
You will own the truck entirely after your payments are complete. You may then keep driving the truck without making payments or utilize the equity you’ve built up to trade in your existing truck for a newer one. Finally, as an owner-operator, you must consider if purchasing an 18-wheeler is a smart investment for your company.
Buying an 18-wheeler: New or used?
If you decide to purchase an 18-wheeler, you should do your homework and do considerable study on the vehicle. You have the following options:
A brand new vehicle: Choosing between a user and a new vehicle is mostly a financial choice. Purchasing a new rig is far more costly than buying a used one.
You may be responsible for warranty charges and interest costs incorporated into your payment plan and the increased vehicle cost. The issue you must address is whether the additional cost is justified.
The following are some of the advantages of purchasing a new 18-wheeler truck:
A lengthy warranty
Most new trucks come with a long and comprehensive warranty covering any damage or concerns. This may provide you with a great deal of peace of mind while saving you money on any breakage or repairs.
Complete understanding of the truck’s history
Another important reason people choose to get new vehicles is this. There will always be some unforeseen difficulties when purchasing secondhand trucks. And you’ll seldom be able to tell how well the truck has been maintained or what problems it has encountered.
When you are buying fresh, though, you have total control. And as long as you know you’ll take excellent care of it, the vehicle will most likely last a long time.
Although purchasing a new truck is more expensive, one may argue that it compensates for that cost by saving money on maintenance that a used truck would need.
Purchasing a used vehicle is always a chance, so many people prefer new. Gambling, on the other hand, may be strategic. So, let’s take a look at some of the advantages of purchasing secondhand.
It is substantially less expensive to buy used: For secondhand vehicles, the price reduces dramatically. The majority of depreciation happens in the first few years. A new truck may cost $150,000 and then be resold for $100,000 a few years later. After that, it’ll be $75,000 every year. For $20-$30,000, you can get a lot of vehicles that are around ten years old.
Gently worn items might be as excellent as new: A used vehicle may be virtually the same quality as a new truck if it isn’t too old and you clearly understand how it was cared for and is in excellent condition.
Less danger: Buying used implies you may change your mind more readily since you’re putting down less money and don’t have large payments to make. If you need to change occupations or jobs or run into financial troubles, purchasing a used vehicle allows you to do so more quickly.
Buying a new truck makes this more difficult since you’re more involved, and selling it within the first few years means losing a lot of the money you’ve put into your long-term connection with the truck.
More potent: Some drivers favor older vehicles because they are often more powerful and well-built than newer trucks. Whether you prefer older trucks, for this reason, do your homework to verify if this is true for the model you’re considering.
Start your online study by searching for ‘MAKE MODEL reviews,’ and you should be able to discover some evaluations of that model on truck-related websites and forums. Of course, as we’ve already indicated, purchasing secondhand has its drawbacks.
It’s always a bit of a risk. This is valid because you never know what has happened to a vehicle in the past. However, if you do your homework and do your hardest to check a vehicle’s quality, you’ll have a high chance of getting a nice truck.
Frequently Asked Questions
Is buying an 18-wheeler a good investment?
Yes. As previously said, purchasing an 18-wheeler is a wise investment.
Is it valuable to be an owner-operator?
Owner-operators often receive greater per-mile rates, or a percent-of-load rate, than corporate drivers. Although they earn more for each load, they must also cover all of the costs of running a vehicle and a company.
Is it lucrative to operate a trucking company?
Yes. Although the trucking industry may be very rewarding, it is also quite competitive.
In 2021, what are the most lucrative trucking jobs?
In 2021, the most lucrative trucking occupations were:
- Trucking on ice roads
- Transporting a tanker
- Hauling oversized loads
- Transporting high-end automobiles
In conclusion, buying an 18-wheeler is a good investment. And if you desire more help in this regard, the tips above will aid you immensely.
I am Lavinia by name and a financial expert with having a degree in finance from the University of Chicago. In my blog, I help people to educate by making wise choices regarding personal investment, basic banking, credit and debit card, business education, real estate, insurance, expenditures, etc.