Does It Make Sound Financial Sense To Lease Under A Trucking Company?
If you own your own truck, you may have dreams of running under your own authority instead of leasing your truck to a trucking company. While running under your own authority will allow you to keep 100% of the profit each load makes, you still may not come out ahead. Some of the benefits a trucking company will provide may more than offset the percentage of the profit they will keep. Here are a few of those benefits that you may want to consider when deciding how you are going to run your truck.
Commercial Truck Insurance
As an owner running under your own authority, you will be responsible for carrying all of the commercial insurance policies that will be associated with your truck. These are required to protect your truck, as well as your load. The costs of these policies vary based on a wide variety of things. These include:
- Type, age, and value of your truck
- How many lines of insurance you have to carry
- Whether your policies are bundled together
- Where you are located and the number of miles you will be running
- Your driving record, as well as the record of anyone driving for you and more
You can expect to spend an average of $6,500 per year.
When you lease your truck to a trucking company you will often be covered under their liability and cargo insurance. Both of these policies can be difficult, as well as expensive for an owner-operator to obtain. You will still have to purchase your bobtail or non trucking liability and your collision or physical damage insurance. These types of policies are not only readily available through most commercial trucking insurance carriers, but they are usually not as expensive. (For more information, contact companies like Metropolitan Insurance Service Consultants.)
Back Office Support
As an owner operator, any time that you spend not driving is time that you are not making money. Unfortunately, there are other duties that must be done to keep you up and running. Some of these duties include sales, contracting, trip planning, negotiating fuel surcharges, discounts, and more. Once all of that is done, you are still responsible for dealing with all of the accounting that comes along with the job. When you contract with a trucking company, they do this type of back office support for you. This gets the job done and gives you more time to spend on the road making money.
Discounts are a great way to keep more of what you make in your pocket. Because most trucking companies have numerous employees, it is easier for them to negotiate discounts than it would be for you on your own. Some of the discounts you may use on a regular basis include the following:
- Toll roads
- Trucking software
- Cell phone plans
- Servicing and maintenance and more
Although many of these things are tax deductible as a business expense, it is nice to not have to pay more than you have to from the beginning.
If you have ever broken down on the side of the road in the middle of the night, you have probably found yourself at the mercy of any local tow company you can reach. You are then forced to not only pay the price they are charging to assist you in getting off the road, you are also at the mercy of the shop they are willing to tow you to.
When you lease to a trucking company, they often have contracts in place that will allow you to assess these vital breakdown services no matter where you are. They deal with networks that will not only help you get off the side of the road, but will also help you obtain the repairs you need and get back on the road.