Slightly updated September 21, 2020, to reflect current market conditions:
With the news of higher rates on the spot market and with competition for drivers growing in some quarters in spite of this year’s slowdown, you’re bound to see bigger companies salivating at the opportunity to start new lease-purchase or other leasing contracts.
With such conditions, it’d be no surprise for more company drivers to ask if now is the time to become an owner-operator. Yet the decision to make that jump is often driven by an emotional sense of just how much better life will be thereafter.
I remember these thoughts from 17 years ago, when my wife and I purchased our used Freightliner Century. No boss, just me, my truck and the open road picking what I want to do, where I want to go, when I want to work. And don’t forget all that money — you know, the cash we imagine the company bosses are stealing from us.
Our eight-year road to ownership prior to that day was not without missteps. Like many things in life, timing and luck played a roll. Marcia and I did develop an ability to save money prior to making the switch, but our motivation then wasn’t to become an owner-operator. Learning to effectively manage our personal finances and build up our credit rating did, however, open the road to opportunity. Without those skills, I don’t believe I would be an owner-operator today.
The lynchpin to starting up was the Freightliner dealer offering us a bank loan on good terms to buy our used truck. However, if your personal finances are over-extended, taking on the risk of business ownership may not be the best plan, even if you qualify for good loan terms.
If you’re considering ownership, can you write down why you want to make the investment and how? What’s your plan? Be very critical. Get out that highlighter and identify what in each of your own statements is in fact true. Get out the red pen and mark up what doesn’t make sense.
