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should i put my semi truck in my business name

Should I Put My Semi Truck In My Business Name (+ Other FAQs)

should i put my semi truck in my business name

Should I put my semi-truck in my business name? This is one of the most common questions from truck owners when purchasing a vehicle.

If you run a trucking company, your vehicles are your biggest and most important business asset. Owning trucks comes with many costs: insurance, maintenance, taxes, and more.

This means you need to be smart about how you purchase and register trucks. If you sensibly do this, you can optimize your expenses.

In this guide, we’ll cover whether you should put your truck in your personal or business name, as well as some related questions.

Should I Put My Semi Truck in My Business Name?

If you own a semi-truck as a business vehicle, one of the most common questions you’ll ask yourself is whether you should put your semi-truck in your business name or keep it as a personal asset.

While there’s no right or wrong answer, there are advantages to taking either approach.

Why Put Your Semi-Truck in Your Business Name?

Putting your semi-truck in your business name lets you separate the truck from your personal self. This can offer valuable protection of your personal assets in case something happens.

For example, if someone files a lawsuit against you, they could go after your truck as it is your personal property.

long road

This kind of issue can happen in the event of financial troubles or even a divorce. If your truck is registered as a business asset, it’s separated from your personal self. This means the truck is protected.

If you have a poor financial history or credit rating, then it could also be worth registering your truck as a business asset. This can make it easier to gain semi-truck financing for your business – instead of applying for it personally. This can also help you access semi-truck repair loans.

If you own a trucking company with multiple vehicles, then it makes sense to register these vehicles as business assets. This will help you provide coverage for all of your business vehicles more easily. It also reduces any risks associated with owning these vehicles, which can be big when you have multiple trucks.

Why Keep Your Semi-Truck in Your Personal Name?

The main reason why putting your semi-truck in your personal name is a good idea is that it’s easy.

If you are an owner-operator, there’s a good chance your business might be operating as a sole proprietorship. In this case, you have no choice but to register the truck in your name as there is no separation between yourself and your business.

In many cases, owner-operators will purchase a truck first and then register the business. In this case, the truck will first be placed under the owner’s personal name, which can make transferring the truck to your business difficult.

person reading contract

Personal or Business: Which is Best?

While it’s often easier to register your semi-truck in your name, it’s generally considered a smarter move to register it under your business. Doing so helps to protect your truck as a business asset and legally separates you from your truck in case any issues arise.

Owning the truck as a business vehicle can be beneficial for tax purposes, as maintenance costs associated with the truck can be recorded as business expenses.

Of course, one important consideration also comes down to whether you have business partners or not. If you do, then registering the truck under your business will give them a share of ownership of the truck. If it’s just you that runs the business, then this is an easier decision to make.

If you’re considering registering your truck as a business asset, it’s important to first consult with a business lawyer on the matter. They will be able to offer specific advice based on your business and personal situation.

How Does Commercial Auto Insurance Work?

If you’re wondering whether you should put your semi-truck in your business name, you’ll also want to consider commercial auto insurance.

Properly insuring your semi-truck is essential, and one of the best ways to do this is through a business vehicle insurance policy.

This type of insurance only applies to business vehicles, so you can’t access these policies if the trucks are registered as personal assets.

signing document

If your truck is registered as a personal asset, then you will also need to insure it under your personal name. Many household and vehicle insurance providers don’t have policies for semi-trucks unless they’re used as business vehicles. This can make insuring the truck a complicated and expensive process.

Commercial auto insurance gives you higher insurance amounts and will help you cover the vehicle under circumstances where a personal insurance policy wouldn’t pay the claim. This includes insurance coverage of the vehicle but also insurance for things like injuries, property damage, or collision insurance.

If your employee drives the truck and gets into an accident, then your commercial auto insurance will pay out. If the truck is insured under your name, then claiming for accidents involving other drivers can be very difficult. You might not be able to claim from a personal policy at all if you were using the truck as a business vehicle.

Commercial auto insurance can be significantly more expensive than personal insurance policies. This is because of the extra liability a trucking company has compared to a personal vehicle.

Of course, this all depends on your specific insurance policy and provider. However, as a working business vehicle, you’ll probably want to have commercial auto insurance on your semi-truck.

Should I Buy a Semi-Truck as a Business Expense or Out of My Budget?

Beyond thinking about how you will register your semi-truck, you also need to consider how you will purchase and finance the truck. Should it be a personal or business expense?

misty road

Many businesses purchase a business car, and for very good reason. By purchasing the semi-truck as a business expense, you can record your mileage and operating costs as business expenses. This can help you access some tax benefits.

Sure, you can still track your truck’s mileage and separate personal mileage from the mileage your trucking company racks up. However, it will be a lot easier to do this if the truck is a business expense.

Separating the truck financing as a business expense can also make it easier to manage your business’s finances and separate your business expenses from your personal expenses. If you finance the truck from your personal bank account and name, separating the truck as a business expense can get tricky.

However, whether you should purchase the truck as a business or personal expense comes down to your individual situation. Consider how your business is structured, and how you plan on financing the vehicle.

It’s best to speak to your tax practitioner about this to see how the cost of the vehicle can help you with taxes.

If you do purchase the vehicle under your business name, just be prepared for a different process. You’ll have to produce the right documents and ensure the vehicle is registered to the address on file with the Department of Revenue.

Should You Transfer Your Semi-Truck to Your Business?

hand

If you already own a semi-truck as a personal asset, you might want to transfer it to your business. This often happens if someone starts as a sole proprietor and then registers their trucking company as an LLC later down the line.

If you do plan to transfer ownership of the vehicle, there are some important things to keep in mind. Most importantly, the cost.

If you want your vehicle in your business name, you’ll have to repay the taxes associated with the value of the vehicle. This is because you will have to resell the vehicle from yourself to your business.

Even if you only sell the semi-truck to your business for $1, there are still taxes involved. By transferring the vehicle, you’ll have to pay these taxes for a second time. This can be an annoying and significant expense.

Should You Buy or Lease Your Vehicle?

The question of whether to buy or lease your semi-truck is one of the first things to consider when acquiring a new vehicle. As always, both options come with their advantages and disadvantages.

The obvious advantage to leasing a truck is that it’s more affordable in the short to medium term. If you don’t have a large down payment to make on the vehicle, you can start to lease the semi-truck at a relatively low monthly cost.

Depending on the type of leasing agreement you enter, you may be able to take ownership of the truck at the end of the agreement. This could make leasing a vehicle financially viable.

hands writing

The other advantage is that there’s less risk involved because you don’t own the vehicle.

Buying a vehicle comes with the advantage of owning the semi-truck straight away. This means it’s your asset, and you can sell it if you want. You can also gain tax advantages from owning the vehicle more easily.

So, leasing may mean more affordable monthly payments, but buying gives you greater control over vehicle usage and mileage. As your semi-truck is the most important asset for your trucking company, buying the vehicle often makes the most sense. However, this does depend on your specific circumstances.

And then there’s the question of whether you should lease the vehicle in your business name or personal name. While leasing is different from purchasing outright, the same principles that we’ve covered above apply to this scenario. In summary, leasing it in your personal name has benefits, but leasing it in your business name is less risky!

Conclusion

Whether you should put your semi-truck in your personal or business name depends on your individual situation.

There are many factors involved, such as insurance, taxes, your business structure and accounting, employees, and how your vehicle is funded. There’s no right or wrong answer, it just comes down to what option offers the best advantages for your business and personal scenario.

Whatever the case, it’s always best to consult with professionals to help you purchase your semi-truck as efficiently as possible. If you have any questions about financing a semi-truck, consider approaching Mission Financial Services for top-tier assistance.

semi truck business ideas

The 12 Best Semi-Truck Business Ideas

semi truck business ideas

There are loads of different semi-truck business ideas out there. If you own a semi-truck or are thinking of investing in one, there’s a lot you can do with your vehicle.

All you need is the right truck and a Commercial Driver’s License (CDL), and the possibilities for starting a business in the trucking industry are endless.

In this guide, we’ve broken down a few of the best owner-operator business ideas anyone with commercial trucks can tap into.

Why Start a Semi-Truck Business?

If you own a semi-truck, then starting your own business is a fantastic idea. Starting a business puts you in charge of your own opportunities and lets you become your own boss.

Not only do you get this freedom, but there are also loads of different business opportunities and ideas you can access with a semi-truck. This lets you be picky and tailor your truck-driving business to your interests.

One great reason to start a business with your semi-truck is that you can do it independently. Once you have a truck and your CDL, you’re ready to start operating. You can do this relatively easily as a sole proprietor.

If you get tired of driving, you can also hire a semi-truck driver and focus on managing the operations yourself. This can be a great direction for anyone who wants to stay in the trucking industry without spending long hours behind the wheel.

truck

Most importantly, there are endless business opportunities for someone with a semi-truck. Wherever there are goods that need to be transported, business ideas and opportunities exist.

12 Best Semi-Truck Business Ideas

If you’re thinking of investing in a semi-truck, the good news is that plenty of trucking business opportunities and ideas are available.

Here are some of the best semi-truck business ideas you can use.

1. Freight Transportation

One of the most popular trucking business ideas is to get into freight transportation. This is an enormous field you can join, with all kinds of different areas you can specialize in.

Freight may be transported between different transport links (like rail, air, or sea), or you could transport freight from a supplier directly to a customer.

If you start a freight trucking business, there are different types of freight you can choose to work with. You can choose to specialize in a certain type of freight or offer a range of services.

The most common freight types that truckers focus on are:

  • Less Than Truckload Freight (LTL): This popular form of freight shipping is when you carry smaller loads from different suppliers. This way, suppliers don’t have to pay for entire truckloads if they don’t need to fill a whole truck. This makes LTL freight more affordable and convenient for many businesses, which means there’s a large market for it.

long road

  • Full Truckload Freight (FTL): This is when you use your entire truckload for a single supplier. This type of freight shipping focuses on larger suppliers and manufacturers. It’s also a better option for loads that require extra space or require special attention or packaging when shipping.

If you start a freight trucking business, you’ll probably have to work with other logistics and shipping businesses, as many use intermodal transportation.

2. Farming and Agriculture

The farming and agriculture industry needs trucks to operate. This is an enormous sector that you can build your trucking business around. There are also many different opportunities for agricultural transportation.

You could focus your semi-truck business on transporting livestock, grain, dairy, animal feed, or any other farming materials or produce. You could even focus on hauling farming machinery.

Of course, you’ll need to have the right equipment if you’re going to haul different kinds of farming or agricultural materials. This could include livestock trailers or even milk tanks.

If you do decide to focus on the agricultural sector, it pays off to specialize in a certain type of trucking. This will help you prepare your business with the right gear. It will also make it easier to find the right kind of clients who require your services.

3. Truck Rental

If you own your truck, you might even consider starting a truck rental business.

This can be a great idea if you want to be in the trucking industry but don’t want to spend all of your time driving.

Yellow truck on road

Of course, this business idea works best if you own multiple trucks and not just one. In this business, you might find it useful to know all about truck financing.

This is also a good business idea if you use your truck on an occasional basis, but don’t drive it full-time. This way, you can capitalize on your downtime between trips.

You’ll just need to make sure you find the right kind of customers who also only need to rent a truck for short periods.

4. Moving Business

When it comes to starting your own trucking company, you can also look at going into the moving business.

Instead of transporting goods or raw materials, you can help to move people’s items from place to place. This can be residential or commercial moving.

Whatever the case, people always need to transport their things from place to place, and owning a semi-truck puts you in a great position to do this.

Of course, if you do use a semi-truck, you’ll need to be executing moves on a large scale. People normally choose a smaller box truck business for moving, so make sure to market your semi-truck moving business to people or businesses that need large-scale moving done.

5. Courier or Delivery Service

Trucking businesses can also consider going into local shipping or courier services.

This may not be the obvious type of business to start with a semi-truck, as couriers generally require smaller trucks or vans. However, there are always people ordering large courier items which require larger vehicles. This is where your semi-truck comes in useful.

road with many cars

Semi-truck courier services can haul larger items and larger loads. Consider looking for clients like furniture or appliance stores that require larger containers for their courier needs.

6. Waste Removal

The waste removal industry is estimated to be worth $1.4 trillion globally. This is a lucrative opportunity for anyone looking to start a trucking business.

Where there’s waste that needs to be moved, there is demand for large trucks. This is an important service for all kinds of businesses and homeowners, which means there’s always a strong demand for it.

You can focus on providing general waste removal services. You can also specialize in moving certain types of waste. Some waste removal services require special licenses and equipment for safely transporting the waste. If you decide to go into one of these areas, it could allow you to charge a premium for a specialized service.

So, choosing to do a waste removal trucking service has many possibilities. You could either specialize in a specific type of waste or move any general waste that doesn’t require specialist knowledge and equipment.

7. Car Transportation

If you’re after semi-truck business ideas, then car hauling can be a great venture. Car transportation truck businesses require the use of a special trailer. You also need to be properly prepared to haul an oversized load.

If the gross vehicle weight rating of your truck is large enough, then you can move new cars from manufacturers to dealerships. This can be a great business idea to make a consistent income.

truck dock

You can also haul vintage cars, or used cars that need to be moved from place to place. This type of business could even turn into towing services if you have the right kind of flatbed trailer.

Car transportation is one of the best trucking business ideas as its versatile. There are many different ways you can transport cars, and you could do this as short haul or long haul trucking.

8. Construction Hauling

Major construction projects are happening all the time, all over the country. This means there are plenty of opportunities for hauling construction materials or waste. The waste removal industry in the US is worth billions, and it’s only growing as infrastructure projects increase.

Make sure you’re set up with a good strong truck with the right kind of hauling equipment. You can do this with a box truck, but using semi-trucks with open trailers is often better, as it allows you to haul a more significant load.

The larger your truck capacity, the greater load you can haul. This could help you access bigger jobs and work on larger-scale construction sites.

If you want to start a haulage trucking company but are struggling to get clients, then you could also opt to be a haulage services affiliate. This is when you put your truck in the hands of other trucking companies and earn commission from them.

By working with an already successful business, you won’t have to worry about finding clients in the highly competitive haulage trucking industry.

misty road

9. Junk Removals

Wherever you go, people have junk that needs to be moved. As long as you have a powerful truck and the right lifting and moving equipment, this is one of the best semi-truck business ideas.

You can offer junk removals to carry and clear any kind of household or commercial junk. Whenever a new construction or renovation project takes place, chances are there will be some junk that needs moving.

This is one of the easiest types of short-haul trucking business opportunities. As long as you have a large enough truck and a CDL, you can collect junk to move to the dump pretty easily. You can reach out to contractors, construction firms, property managers, and developers to advertise your junk removal services.

10. Snow Plow

This is an interesting trucking business idea that you can start with semi-trucks. If you’re based in an area that experiences heavy snowfall, then you could convert your semi truck’s tractor into a snow plow.

You can advertise snow plow services to local businesses, residents, or your local government. This is one of the easiest semi-truck business ideas as you won’t need to transport anything. Get ready to drive around town clearing snow!

This is also a clever way to make some extra money from your semi-truck during the winter months.

11. Oversized Load Transportation

With a powerful truck and a large enough trailer, you can offer oversized load transportation services. This can be a great way to access a niche area of the competitive trucking industry.

load transportation

Oversized loads include anything from farm vehicles to wind turbines. You can offer oversized moving services, or provide delivery services between manufacturers and customers.

Of course, you’ll also need to make sure that you have a suitable CDL to handle extra large loads.

12. Semi-Truck Driving School

Another clever way to make extra money from your truck is to offer semi-truck driving lessons. This is a great idea if you’re looking for an additional stream of income for your traditional long-haul trucking business.

Many people are interested in entering the trucking industry, and they need to practice driving a semi-truck to get their CDL.

To offer lessons, you’ll need to have the right knowledge for being a commercial truck driving instructor.

Conclusion

Starting a profitable business in the trucking industry is very possible.

You just need the right vehicle, the right license, and to find a business opportunity that matches your expertise and interests. Semi-trucks are useful in different industries, so you have quite a few opportunities to consider!

These semi-truck business ideas cover a range of areas. Understand the market and find a business idea that works for you. There are endless opportunities out there!

If you’re looking to finance your commercial vehicle, consider using Mission Financial Services. We’ll help you get the best financing deal to match your semi-truck business needs.

Cass transportation index

Cass Transportation Index | 2022 Key Points

Cass transportation index

If you work in the transportation and freight industry, then the Cass Freight Index is one of the most valuable resources available online.

This resource is used to understand transportation trends, volumes, and expenditures across the U.S. Since its conception, it’s been a valuable source of information in the industry.

In this guide, we’ll cover everything you need to know about the Cass Transportation Index and how it works. We’ll focus on some key points from the December 2022 index, mainly looking at the index insights into the trucking industry.

What is the Cass Transportation Index?

The Cass Freight Index measures the overall freight volumes and monthly freight expenditures in North America. The index has been published since 1955.

This index covers all intra-continental foresight shipments, including raw materials and finished goods. The index covers all modes of domestic transport, although truck hauls make up more than 75% of all activity.

The Cass Freight Index data is updated with monthly statistics on shipment volumes and expenditures. This data is important for understanding freight industry trends through an ongoing monthly comparison.

The Cass Freight Index is compiled by Cass Information Systems, an automated payment systems provider. Cass Freight Index shipments cover over 1200 divisions of more than 400 manufacturers and companies.

Other Indexes Related To The Cass Transportation Index

How to start a semi truck business

Cass Information Systems also produces the Cass Truckload Linehaul Index, which measures the fluctuations in U.S. domestic baseline truckload costs. The purpose of this is to separate the linehaul elements of truckload costs from other trucking cost components – such as fuel costs.

There is also the Cass Intermodal Price Index. With intermodal transport, the cargo stays in the same container while being transferred across different modes of transport. This index monitors changes across U.S. intermodal costs. So while the Linehaul Index only covers linehaul rates, this index monitors all costs.

There are also other indexes similar to the Cass Transportation Indexes, such as the Transportation Services Index compiled by the U.S. Department of Transportation (DOT), and the Morgan Stanley Proprietary Truckload Freight Index. These are all useful supply chain indicators and valuable resources for monitoring freight trends.

The Cass Truckload Linehaul Index

As mentioned above, the Cass Truckload Linehaul Index monitors baseline truckload costs in the U.S. This monthly index measures the market fluctuations in truckload linehaul rates per mile. This index provides an accurate indication of market fluctuations in truckload pricing in the U.S.

Because this index only looks at the linehaul component of truckload costs, the freight transportation industry can use it as an accurate reflection of trends in baseline truckload prices. As trucking makes up the vast majority of recorded Cass shipment volumes, this index offers some of the most valuable industry insights.

How is it Measured?

Data from the Truckload Linehaul Index comes from freight invoices paid on behalf of the entire Cass client base, a combination of contract and spot rates.

Highway

As Cass manages $44 billion in freight spending each year, this data provides meaningful insight into transportation industry trends.

To measure freight shipments in this index, the per-mile linehaul rates are monitored, independent of any other cost factors – like accessorials or fuel.

Key Points: Cass Transportation Index December 2022

The Cass Freight Index is a valuable source of information for anyone involved in the transportation industry. Here are some key takeaways from the December 2022 Cass Shipments Index:

  • Cass Freight Index shipments were measured at 1.161, a -3.9% year-over-year change.
  • Cass Freight Index expenditures were measured at 4.231, a -4.3% year-over-year change.
  • Freight rates are on track to fall 5% in 2023, based on the normal seasonal pattern of this index.
  • Cass Inferred Freight Rates were measured at 3.644, a -0.4% year-over-year change.
  • The index saw sharp declines in ocean rates and many commodity prices.
  • Expenditures in the Cass Freight Index rose 23% in 2022 after a record 38% increase in 2021.

Key Points From The Truckload Linehaul Index

  • Truckload Linehaul Index was measured at 150.54, up by 1.7% on a year-over-year basis.
  • Spot rates were down significantly on this index.
  • The larger contract market is adjusting downward more gradually.
  • New truckload contracts are mostly being renewed with notable rate reductions.

documents required for commercial vehicle loan

Final Thoughts

If you’re going to stay on top of monthly trends in the freight and supply chain sector, then the Cass Index is possibly the best place to access this data. Understanding this index and monitoring monthly data changes will help any trucking and freight business make more informed decisions.

Looking at the key trends from the December 2022 report is important, as it helps you better understand the state of the industry going into the new year. This provides valuable insights into trends for the year ahead.

 

How to start a semi truck business

How To Start A Semi Truck Business | 8 Steps

How to start a semi truck business

The commercial trucking industry is a vital part of the US economy. Trucks move around 72% of all goods in the country. Starting a semi-truck business can be an excellent opportunity!
With the proper preparation and planning, a semi-truck business can be a successful and rewarding venture.

Let’s talk about how to start a semi-truck business.

Semi Truck Business Success | 8 Steps

Step 1: Research The Semi Truck Industry

Before you start a trucking company, it’s crucial to research the industry and understand the market. Look at the trends, the competition, and the potential customers. Understanding the industry will help you make informed decisions and ensure your business is booming.

For example, when researching the industry, you can start by looking at the current market trends. This can include investigating the demand for trucking services in different regions, the commonly transported goods, and the current rates for trucking services.

By conducting this research, you can better understand the industry and the market. You will be able to identify potential opportunities and challenges and make informed decisions about your business strategy.

Step 2: Create a Semi Truck Business Plan

Once you understand the industry well, the next step is to create a business plan. A business plan should outline your goals and strategies, and the steps you need to take to achieve them. It will also help you secure funding and attract investors.

business plan

A trucking company business plan should include the following key elements:

  • Executive Summary: A summary of the main points of the business plan, including the purpose of the business, the target market, and the critical strategies for achieving success.
  • Company Description: A description of the company, including the legal structure, ownership, and management team.
  • Market Analysis: An analysis of the industry, including the current market trends, the competition, and the potential customers.
  • Services: A description of the services that the business offers, including the types of goods that will be transported and the routes that will be covered.
  • Marketing and Sales: A description of the marketing and sales strategies, including the target market, pricing strategy, and promotional activities.
  • Operations: A description of the day-to-day operations of the business, including the logistics of transporting goods, the maintenance of the vehicles, and the management of the drivers.
  • Financial Projections: Financial projections for the business, including income statements, balance sheets, and cash flow statements from your business bank account.

Step 3: Obtain The Necessary Licenses And Permits

Starting your own trucking business requires obtaining the necessary licenses and permits. These include a commercial driver’s license and the authority to operate as a motor carrier.

For example, you will need to obtain several licenses and permits to operate a semi-truck business. These may include:

  • Federal Motor Carrier Safety Administration (FMCSA) Operating Authority: This is also known as an MC number. This is required for any company that operates commercial vehicles transporting goods in interstate commerce.
  • USDOT Number: This is a unique number assigned by the FMCSA to identify commercial motor carriers.

Man in truck

  • State Operating Permits: Some states also require a separate permit to operate within their borders.
  • Commercial Driver’s License (CDL): Drivers operating commercial vehicles, including semi-trucks, must have a CDL.
  • Vehicle Registration: Each vehicle used in the business must be registered with the state and have proper business insurance.

It’s important to note that the requirements for obtaining licenses and permits may vary depending on the state. It’s also crucial to comply with federal and state regulations regarding safety, insurance, and other operational standards.

Step 4: Secure Funding

Starting a semi truck business requires a significant financial investment, and securing funding is crucial.

Consider options such as traditional bank loans, equipment financing, or working with a lender specializing in the trucking industry.

Mission Financial Services is a preferred loan process agent for national and regional dealership chains and family-owned, independent, and franchised dealerships. They also offer loans to first-time buyers and loans to those with bad credit scores.

For example, if you want to start a semi-truck business with five trucks, you will need to purchase or lease the trucks, trailers, and other equipment. Additionally, you will need to pay for insurance, maintenance, and other expenses.

Starting the business may cost a significant amount, which may not be feasible to cover with personal savings or credit cards. In this case, you’ll need to secure funding through a loan or other financing options.

Handshake

Working with a lender specializing in the trucking industry, such as Mission Financial Services, can be helpful. They understand the specific needs and challenges of the trucking industry.

They may also offer financing options tailored to the needs of trucking businesses, such as loans for purchasing or leasing trucks and trailers or loans for covering operating expenses.

Step 5: Purchase Or Lease Trucks And Trailers

Once you have secured funding, focus on purchasing or leasing trucks and trailers. When it comes to purchasing or leasing trucks and trailers, there are pros and cons to each option.

Purchasing

Pros
  • Ownership: When you purchase a truck or trailer, you own it outright and have the flexibility to customize it to your business’s specific needs.
  • Equity: As you pay for a purchased truck or trailer, you build equity in the equipment.
  • Tax deductions: You can take advantage of tax deductions for the equipment, such as depreciation.
Cons
  • Upfront cost: Purchasing trucks and trailers requires a significant upfront investment, and it may not be feasible for businesses with limited capital.
  • Maintenance costs: As the trucking business owner, you are responsible for all maintenance and repairs, which can be expensive.
  • Depreciation: The value of the equipment will depreciate over time, which can impact the resale value.

Leasing

Pros
  • Lower upfront cost: Leasing requires a smaller upfront investment than purchasing, making it more accessible for businesses with limited capital.
  • Lower maintenance costs: Maintenance and repairs are often included in the lease agreement, saving money on maintenance costs.

  • Flexibility: Leasing allows you to upgrade to newer equipment more frequently, which can benefit businesses that need to keep up with new technology or regulations.

Cons

  • Lack of ownership: When you lease equipment, you don’t own it outright and may not have the flexibility to customize it to your business’s specific needs.
  • Limited equity: As you make payments on a leased truck or trailer, you don’t build equity in the equipment.
  • Higher costs in the long run: Leasing equipment over an extended period can cost more in the long run than purchasing it outright.

Consult with a transportation consultant or financial advisor to help evaluate your options and make the best decision for your business.

Step 6: Hire Drivers

Even as an owner-operator, a semi-truck business relies heavily on its drivers. Hiring qualified, professional drivers who can ensure the safe and efficient transportation of goods is essential. When hiring drivers, consider the following qualities:

  • Commercial driver’s license (CDL): Drivers operating commercial vehicles, including semi-trucks, must have a CDL.
  • Driving experience: Look for drivers with experience driving semi-trucks and a good driving record.
  • Knowledge of federal and state regulations: Drivers must be familiar with federal and state laws regarding transportation, including hours of service, inspection, and maintenance requirements.
  • Communication skills: Drivers must communicate effectively with dispatchers, customers, and other drivers.
  • Problem-solving skills: Drivers must be able to handle unexpected situations and make quick decisions.

Woman truck driver

  • Physical stamina: Driving a semi-truck can be physically demanding, and drivers must be able to handle the job’s demands.
  • Professionalism: Drivers and owner-operators must professionally conduct themselves and be able to represent the company in a positive light.
  • Safety-minded: Drivers must prioritize safety and follow safety protocols and regulations.

Step 7: Build A Strong Network

Building a solid network of contacts and relationships can benefit your business in the trucking industry.

Here are a few ways to build a strong network:

  • Join industry associations: Joining industry associations such as the American Trucking Association (ATA) can provide opportunities to connect with other trucking professionals and stay informed about industry trends and regulations.
  • Partner with other trucking companies: Consider partnering with other trucking companies to share resources and pool expertise.
  • Develop a good relationship with suppliers: Building a strong relationship with suppliers will help you keep costs down and deliver the goods on time.
  • Provide excellent customer service: Building a solid relationship with customers can lead to repeat business, positive word-of-mouth, and new business opportunities.

Connecting with other trucking companies, suppliers, manufacturers, distributors, and customers can help you gain new business, improve logistics, and stay informed about industry trends and regulations.

Step 8: Keep Accurate Records

Keeping accurate records is essential for the success of a semi-truck business. Here are a few benefits of keeping accurate records:

book keeping

  • Financial tracking: Accurate record-keeping can help you track your income and expenses and monitor the financial performance of your business. You can use this information to make informed decisions about your business and plan for future growth.
  • Compliance with regulations: Keeping accurate records can help you ensure compliance with federal and state laws. This includes keeping track of service hours, vehicle maintenance and inspection records, and driver qualifications.
  • Taxes: Accurate record-keeping can help you file taxes correctly and take advantage of tax deductions.
  • Auditing: Accurate record-keeping is essential. You may be subject to an audit by the Federal Motor Carrier Safety Administration (FMCSA) or other regulatory bodies.
  • Efficiency: Accurate records can help you improve the efficiency of your business. It does this by allowing you to track inventory and deliveries and manage staff and vehicles more effectively.

Final Thoughts

Starting a trucking company requires significant time, money, and effort. Still, it can be a successful and rewarding venture with the proper preparation and planning.

By following these steps and making informed decisions, you can start a semi-truck business that will thrive in the competitive commercial trucking industry in the US.

If you want to start your own trucking company, don’t hesitate to reach out to Mission Financial Services for loans and financing options.

How Inventory Shifts are Impacting Purchase Decisions

When it comes to buying trucks and equipment, the majority of owner-operators prefer the used market, according to Overdrive’s Truck Purchase and Lease Survey. Out of all of the survey’s respondents, 56% of them reported buying used trucks, 32% bought new, and less than 10% leased their trucks or equipment.

However, while purchasing used trucks and equipment is preferred among owner-operators, finding said trucks and equipment at a fair price is more challenging than ever. Thanks to the COVID-19 pandemic and the delays in production, brought on by component shortages, many owner-operators are forced to consider other purchasing options.

Unfortunately, truck dealerships aren’t receiving much in the way of new inventory. In 2021, new trucks were being ordered, but they wouldn’t arrive until December. And, to top it off, fewer trade-ins are making their way onto the lots, thus pushing prices of used trucks through the roof. In 2021, used trucks retailed for the most they ever have in the modern era. For example, a used sleeper, with over 450,000 miles on it, sold for a little over $90,000. This price was approximately 85.5% higher than the previous year. And while some industry professionals anticipated a slow descent in used truck prices in 2022, others caved to the pressure of the market and sold off their fleets for substantial amounts of money.

Photo Credit: Overdrive

Are higher lending rates to come?

Industry experts also predict that new truck production will eventually catch up and balance out. Once trucks start rolling off of assembly lines, used-truck buyers will want to consider the potential financing impact new truck production could have on trade-ins with higher mileage than normal. 

Financing a used truck is already a challenge due to the higher risk lenders take since used trucks typically face engine problems. When the trade-ins that drivers clung onto in lieu of new inventory arrive at dealerships, they will arrive with higher mileage and a higher risk of performance issues. Thus, lenders will be even more hesitant when drivers request financing and likely raise lending rates.

For small fleets, experts believe it may be wise to consider extending the life of their trucks and equipment through maintenance rather than buying new or used. And for any owner-operators who are searching for a used truck in today’s market, they can also expect higher down payments. In fact, those just entering the industry should be prepared to put 25-35% down. Overdrive recently surveyed a group of drivers who recently bought a used truck to further prove the state of the market. They found that 38% of used-truck buyers paid in cash, and 57% of buyers financed with a bank loan or through a captive or specialty lender.

Is a lower interest rate possible?

Despite all of this, there are ways to acquire a lower interest rate on your loan. The main factors that lenders look at to calculate the monthly payment include your credit score, the model year of your truck, how much money you put down, the owner/driver’s business experience, and your resourcefulness. 

“I’d rather lend money to a guy with a 600 credit score whose father was an owner-operator, grandfather was an owner-operator, brother is a diesel mechanic, and maybe his credit score is down because of divorce,” Grivas said. “That’s a great risk compared to a guy with a 700 credit score who’s just getting started.” 

When buying a new truck, experienced owners and drivers can expect a single-digit interest rate. However, drivers financing a used truck will see interest rates ranging from 10-13% or higher.

How Mission Financial Services can help.

We understand that sometimes times are tough and we’re here to get you back on the road to financial independence. Whether you’re a first-time buyer, have limited driving experience, or have bad credit, we can help.

Mission offers direct lending for owner-operator purchases, lease purchase buy-outs, repair loans, and title loans for operating capital. And even better, we will perform a complete review of applications and get you an answer within four hours.

Our approvals are structured as simple interest contracts with limited terms that let you build equity in your loan quickly to avoid additional finance charges. Mission considers all applicants living in all states except Hawaii and Alaska. And we offer affordable loans and report to all major credit bureaus so you can start turning your credit around. Why wait?

Get Started Today

More like this:

→ How is the Microchip Shortage Affecting Truck Prices in 2022?

→ Rising Fuel Prices: An Ongoing Problem for Drivers

→ How Does Prop. 22 Affect App-Based Drivers?

What Owner-Operators Need to Know About the Inflation Reduction Act

On Tuesday, August 16, President Biden signed the Inflation Reduction Act of 2022 (Act) into law. The Act covers climate issues, taxes, healthcare, and other legislation in one bill, serving as a concise version of the Build Back Better bill.

What is the Inflation Reduction Act?

The main points of the Inflation Reduction Act of 2022 include:

  • 15% minimum corporate tax rate: Corporations that generate at least $1 billion in income will now have a 15% tax rate, and stock buybacks will have a 1% excise tax.
  • IRS investments: The IRS will receive $80 billion to hire new agents over the next ten years.
  • Prescription drug price reform: Medicare will now be able to negotiate the prices of particular prescription drugs, and in 2025 Medicare recipients will receive a $2,000 limit on annual out-of-pocket prescription costs.
  • ACA subsidy extension: The current medical insurance premiums under the ACA, which were set to expire January 1st, 2023, will now be extended through 2025.
  • Investments in energy security and climate change efforts: Households will receive tax credits to offset energy costs, the government will invest in clean energy production, and there will be tax credits for reducing carbon emissions.

On August 7, the Inflation Reduction Act went to the Senate and passed with 50 Democratic votes and zero Republican votes. Once it reached the House on August 12, bill 220-207 was passed.

Ultimately, small businesses and hardworking Americans will profit from this legislation through the investments in deficit reduction, increased manufacturing, lowered drug prices, and the push for corporations to give back to their community. But what does this bill mean for owner-operators within the transportation industry?

What Owner-Operators Need to Know

The Inflation Reduction Act will make significant changes to the United States environmental policies, health care policies, and tax codes. However, for owner-operators and other small trucking businesses, the Act’s extended changes to the ACA subsidies and IRS investments will likely be the most impactful.

The increased and extended ACA subsidies will allow owner-operators without employer-provided health insurance access to affordable health care coverage. Marc Ballard, who handles the NAIT’s various health care avenues, said, “We’re seeing about 90% of people who enroll can get a plan for $100 a month. Take, for example, a guy who may be 45 with a spouse and two kids, lives in Florida, and expenses a bunch of his income. … Let’s say his net adjusted income is $60,000. He grossed $200,000, but the reportable income is $60,000. He could literally be paying zero dollars for a health care plan.” Those making more money may face an increase in coverage costs by just a few hundred dollars a month.

And while the ACA subsidy changes won’t affect independent business people as much, it’s wise to use this extension period to shop for different health care plans. Freight rates are slowing due to the rise in fuel costs, and owner-operators’ incomes fluctuate as the pandemic period breaks down. So, now is the time to consider income projections and any potential family or personal status changes, which could unlock new health-expense savings.

The $80 billion investment in creating a larger Internal Revenue Service could also pose a threat to owner-operators with more frequent audits. The Associated Press did disclose that armed agents will not come knocking on owner-operators’ doors unless they are under criminal investigation for dealings in things such as contraband. Truck drivers must also be conscious of their increased chance of being audited. And while the IRS does have a backlog, the 87,000 incoming agents will quickly clear it, making time for them to look at newer returns. So, be sure to be extremely thorough when filing your taxes.

The Future is Green

The $369 billion investment in green energy will also notably change the trucking industry. In the next few years, trucking companies could receive tax incentives to purchase trucks that operate on alternative fuel sources, including electricity and biogas. Similar tax incentives will be made available for installing supportive infrastructure at trucking headquarters. The bill will also offer grant and loan programs to trucking businesses to encourage and fund their switch.

More Like This:

→ How Does California’s AB5 Affect Truck Drivers?

→ Rising Fuel Prices: An Ongoing Problem for Drivers

→ What is the COVID HOS Emergency Declaration?

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