How much does it cost to lease a semi truck? This is the first question every company driver asks when they start considering starting their owner-operator business. Sadly, the answer is not the same for every driver.
The main reason owner-operators ask themselves this question is to find out whether running their own business will pay off even after paying the monthly leasing rate. Are the expenses bigger than the earnings, and will they be able to live off of what’s left?
The answer to all these questions depends on several factors. In this article, we’ll try to clarify how much does it cost to lease a semi truck.
The Cost of a Semi-Truck
The price of the truck itself varies and depends on the condition of the truck, its age and mileage, the model and several other factors.
Therefore, a truck that’s as good as new with little mileage under its belt will cost more than a 10-year-old semi that has been through a lot already.
The prices of semi-trucks also depend on the seller. However, models over 7 years old usually range between $30.000 and $40.000, smarterfinacneusa.com reports. Trucks older than 10 years can be found for less, anywhere from $30.000 to $45.000.
According to Cost Owl, new trucks begin around $80.000 and their cost could be as high as $150.000. If the truck features a lot of customized features, the tag could go as high as $200.000.
Credit Score
You might encounter a few more bumps along the road if your credit score is anything short of perfect. Leasing a truck is more difficult than leasing any other piece of equipment with a bad credit score.
One thing that can help you get your request approved at a reasonable rate is providing down payment. This helps minimize the risk for the seller and you are more likely to get your truck leased.
Some companies are more flexible than others when it comes to approving your lease request. If you manage to partner with a company like Go Capital, you are more likely to get your leasing approved than you would if you went through a bank.
Furthermore, you may be able to convince the lender that you are a good candidate for a semi-truck lease if you are already an experienced driver with a strong business plan. However, you might have to provide insight into your current financial situation, as well as proof that you will be able to meet the monthly payments.
How Much Can I Expect the Rates to Be?
In general, rates for experienced owner-operators with a bad credit score and no balloon payment range from $1200 to $1400 for a dated truck. Owner-operators with no previous experience might have to pay up to $1800.
For a new truck, the rates range from $1600 to $2500, depending on your credit score and previous experience. If you can provide a down payment, you can significantly decrease the rate.
What Is an Owner-Operator Trucking Company?
What is owner-operator trucking? Owner-operator trucking, also known as owner-operator or owner operator trucking, is a type of transportation in which the owner of the vehicle drives it.
Generally, this refers to trucks and other commercial vehicles that are not owned by a company but rather its driver(s). The drivers will lease space on a trailer from one or more carriers for their goods.
In most cases, they will be either an individual contractor with no employees, making them self-employed owner-operators, or have employees who operate under their supervision. Owner-operators generally contract with large shipping companies such as FedEx Corporation and United Parcel Service, while others lease trailers from smaller lessors. There are advantages and disadvantages to owner-operator trucking.
Advantages include:
– Lower overhead costs compared to traditional for-hire carriers because owner-operators are responsible for purchasing their own vehicles, fuel, insurance, etc.
– Accessibility to owner-operators that don’t have the credit score required by most traditional carriers
Disadvantages may include:
– Owner-operators generally work on an owner-operator trucking contract. This means they are not always assigned a linehaul run and can be assigned multiple pick-ups and deliveries in a single day which requires more time away from home.
– They must provide and maintain their own truck and trailer.
– Owner-operators generally work under owner-operator contracts which can be restrictive and in some cases less than favorable for owner-operators.
Does Running an Owner-Operator Business Pay Off?
While these numbers might seem intimidating, a lot of owner-operators found out that starting their own business still paid better than working as a company driver. According to Indeed.com, owner-operators earn around $184.682 per year, which is significantly more than the average $62.752 company drivers earn.
Even after deducting the monthly payments, no matter how large the interest rates are, you are still likely going to earn more than what you would working for a company. And if you chose to refinance, you can get better rates and much bigger profits down the road.
Owner-operator trucking is a type of transportation in which the owner of the vehicle drives it. Generally, this refers to trucks and other commercial vehicles that are not owned by a company but rather its driver(s).
The drivers will lease space on a trailer from one or more carriers for their goods. There are advantages and disadvantages to owner-operator trucking, including lower overhead costs compared to traditional for-hire carriers because owner operators are responsible for purchasing their own vehicles, fuel, insurance, etc.
Owner-operators generally work under owner-operator contracts which can be restrictive and in some cases less than favorable for owner-operators; however, there may still be benefits such as working your own hours (within reason) or taking on specific projects without having them assigned to you.
Owner-operators generally work on an owner-operator trucking contract. This means they are not always assigned a linehaul run and can be assigned multiple pick-ups and deliveries in a single day which requires more time away from home. In some cases owner operators may have to provide and maintain their own truck and trailer, however, the owner-operator of the equipment may be able to take advantage of tax deductions such as depreciation, fuel costs, and repairing the truck (and owner-operators will likely pay less for fuel than for-hire carriers).
Owner-operators generally work under owner-operator contracts which can be restrictive and in some cases less than favorable for owner-operators.
Overall owner-operator trucking is a viable business model where owner-operators can earn a higher hourly rate for their work.
