Hi guys,
I’ve been toying with the idea of putting my own wagon on the road for a while now, (like three years +) and am actually getting to the point of putting pen to paper and writing business plans and looking into being my own man by Christmas 2017. I know that 18ish months a long term plan but I don’t want to rush into things, grab the first shiny wagon I see and then go pop before my first MOT.
My biggest question at the moment though is how to acquire a truck. Own a used model outright or get something on a monthly payment. The way I look at some of the benefits and pit falls are:
Outright ownership: Something like a 2010 Renault Premium, Circa 15-20k + VAT.
Pluses - If I don’t get work, all it will cost me is a service every six weeks and an MOT every year.
- If it all goes wrong I have an asset with some value to sell.
- If all goes well, lower ongoing costs, though a greater initial outlay which would delay the point I could get out on my own.
- After making some mistakes in my youth I am rather credit averse, I would rather pay cash or go without.
- By my rough estimates I could put a second wagon on the road in 14 months, again for cash and grow my own little fleet.
- I wouldn’t need to find an agency or casual to drive when I am on holiday, I could just park it up for a week.
- You can reclaim VAT on a truck purchase, even on the flat rate scheme so I don’t loose out there and could stay on flat rate scheme if it makes sense for the remainder of financial year 2017-2018. That would require a good chat with the accountant though, (never a pleasant prospect).
- Unlimited mileage, so if I wanted to stop tramping a double shift the unit I could do it no problems.
Minuses - I am responsible for all costs be they maintenance or breakdown.
- The Premium is an OK truck but no-one would call it a fantastic place to spend a week away from home.
- Definately Euro5 which could restrict work options in a couple of years time.
- Not as ‘impressive’, I don’t mean willy waving look at me, but a newer vehicle cuts a better look when you are prospecting for new clients.
- Main dealer prices are at the top of the price range but those who are offering at a more affordable level don’t look like the most professional outfits.
Some form of Lease: We would be talking new or nearly new (3yrs or less) Range T, Actros or FH.
Pluses - A much nicer place to live and work.
- Maintainence included and probable some form of driveline warranty.
- Euro6
- Likely to offer better MPG returns than an older truck, at least once run in.
- Better business image.
Minuses - If the wheels don’t turn, I still have to find the monthly payment.
- Tied into a contract, a lot harder to get out of if things look dicey down the road.
- Greater on-going costs though a lower start up fee.
- As a new company, trading for only a year, acceptances could be an issue.
- I personally don’t like finance - I would rather own but saving up that much money is a mega ask.
- Growth will be a lot slower.
- The wheels have to keep turning so I’d have to put another driver in my pride and joy while I’m chillin’ on the beach.
- Limited mileage so changing to double shifting could be harder.
Final option - Maritime buy with work on finance.
Pluses - Guaranteed minimum money a month.
- A lot of the little extras are already included, Microwaves and fridges et al.
- The same I have an asset bonus of the outright option but with the risk of negative equity.
Minuses - All of the above.
Obviously from that last line Maritime Buy With Work is the less favorable of the three options, especially as they don’t use Renaults, (Which i actually like, I’m a strange person.)
Factoring in Parking, O-Licence, Insurances, a little money for a rainy day etc, I figure that it’s easily do-able based on turnover of around 2k a week which given the work I have been on with a Maritime Subby for the past month or so I achievable on average. Thats another reason to wait over a year to go for it too, I will give me time to make sure the work stays there throughout the year.
Which way would you guys go if you were starting out on your own for the first time?