Trucking: starting as an o/o, selec trucks, full fledge

Question
Hi. I am now driving for a small company. Driving local. Would like to become an o/o. My credit rating is very good. What would I be required to have as far money down, and other collateral when purchasing a good used truck?  Don't own my home or even pay rent, help a farmer and live in the house for free. Also could you give me any advice on other expenses I will have out of pocket to get started? Have talked to a couple of companies to lease on to but not sure which direction to take?  Thanks for any advice you can give!!

Answer
Hi Todd.

First off, I a have a lot of previous answers to new owner/operators.  Check a few of those just in case I miss something here.  It could be of additional help.

Having good credit is half the battle.  Most companies will want anywhere between $4000 to $10,000 down on a used truck.  $4,000 would be for a five year old Freightliner Century Class and $10,000 for a one year old Peterbilt 379.  If you don't have that kind of money, Freightliner offers a $999 down with their Selec trucks program.  You can check that out at www.selectrucks.com  They're not going to worry about collateral, if there is an issue (i.e. low credit score), then you'll just have to put more money down.

My advice to you would be to lease out to a company, get your feet wet and learn the ropes.  To be a full fledge o/o with your own DOT number, getting your own loads, dealing with brokers, filing taxes, submitting paperwork to get paid, etc., it is extremely difficult (and expensive).  With a company you have the benefit of lower expenses (cargo/liability insurance for o/o's is crazy), benefits and letting them find your loads.   There are some great companies out there.

You may also choose to sign up with a company and purchase a truck through them.  This isn't a bad option and can put you in your own truck for little or nothing down.  The downside is that your choice of trucks may be limited to one model with only the features that they offer, it will be governed, you can't make major upgrades (until you have the title) and so on.  Not really big issues if you like the truck and the company.  You may also be fighting for loads with company drivers.  This will teach you about being an o/o, though.  The umbrella of purchasing power that a big company can offer is also nice.

What I always tell people that are looking into companies is to get a notebook and a pencil.  Write down numerous columns horizontal and vertical.  In all the horizontal columns, list companies that your interested in.  Now in the vertical columns, list all the areas that are important to you in a company.  For example, your columns may read pay per mile, average miles per week, money down for truck, time off policy, is it forced dispatch, % of no touch loads, % of drop and hook freight, benefits, and so on.  Then this should help you narrow it down.  Study it carefully and be objective.  I knew too many guys that went with the company who had shiney Peterbilts, when the guys in the smaller Freightliners were bringing home more money.

Visit a few websites like www.bubbajunk.com and www.classadrivers.com to research companies.  Don't be afraid to contact many of them.  DON'T let them all run your credit, because each time your credit is run, it drops slightly.  Only when you have finalized your decision should you let them run it.  Also, join www.ooida.com.  Every o/o should be a member and they are a great organization.

Good luck and let me know if I can be of further help.

Bob Stephens