Owner-Driver1980:
I have never heard of anyone from tarmac, hanson, tilcon, readymix, ever say you need £30,000 before you could think about owning your own truck.
Matt
Yes you have, I said so ![:slight_smile: :slight_smile:](https://emoji.discourse-cdn.com/twitter/slight_smile.png?v=12)
I’d say £30,000 is at the low end. £40-45,000 would be better.
Owner-Driver1980:
if you sign a contract with tarmac hanson or any other above firm you can usually get a brand new truck with little or no deposit to put down.
Matt
Yes, and you will also get a stupendous amount of finance ![:exclamation: :exclamation:](https://emoji.discourse-cdn.com/twitter/exclamation.png?v=12)
Around £1500 per month for five years for a £75,000 motor with a £5,000 deposit. Splendid recipe for misery in years 3,4 & 5 when the warranty has run out and those big repair bills start to roll in.
Put down £30,000 and you’ve paid for your truck in three years at £1500 pm and be able to sell it whilst its worth something. You then get ALL the proceeds of sale to put down against your next truck rather than using it to pay off outstanding debt if you’d taken it over 5 years and got rid after three (which would incur a nice early settlement penalty from the finance house).
You also miss out on paying thousands of pounds in repair bills as you spend most of your time in a truck covered by the manufacturers 2 year R + M deal…which means more profit which is the bit I go to work for.
Put down £45,000, pay for the truck in two years at £1375pm, get rid of it and have no repair bills at all as the R + M will catch the lot…less interest as you are borrowing over a shorter period too which reduces the finance by £125 pm.
Buy the thing for cash and pay no interest at all saving you a fortune. Just put away £1200 per month into a savings account out of your earnings.
So lets put all this in another form…
New truck costing £75,000, interest at 5%pa flat
- Deposit £5000, period five years, interest on 70,000 £3500pa
- Deposit £30,000 period three years interest on 45,000 £2250pa
- Deposit £45,000 period two years interest on £30,000 £1500pa
So, option 1gives you an interest bill over five years of £17,500 with the bonus of three years of garage expenses on an aging motor.
Option 2 after five years sees you two years into your second motor (so you’ve only had one year out of warranty to stand maintenance on your first motor) and you’ve forked out £11,250 in interest.
Option 3 after five years sees you one year into your third motor having had no garage bills and interest payments totalling £7,500.
To make it fair, lets assume that the piggy bank has been raided for the deposits so you owe yourself the lost interest back. Lets say 3%pa flat from a building society. (too late to do compound interest!)
£5000 deposit would loose you £750 interest over 5 yrs
so total interest bill for option 1 is £17,500 + £750 = £18,250
£30,000 deposit would loose you £4500 interest over 5yrs
so total interest bill for option 2 is £11,250 + £4,500 = £15,750
£45,000 deposit would loose you £6750 interest over 5 yrs
so total interest bill for option 3 is £7,500 + £6,750 = £14,250
Maintenance cost, lets say it costs an average £5,000 pa (which is moderate but illustrates my point) and each new truck comes with the first two years free R + M. Over the five years, the costs would be as follows:
Option 1 3 x £5,000 = £15,000
Option 2 1 x £5,000 = £5,000
Option 3 0 x £5,000 = £0.00
Total interest and repair costs for the three options:
Option 1: £18,250 + £15,000 = £33,250
Option 2: £15,750 + £5,000 = £20,750
Option 3: £14,250 + £0.00 = £14,250
Conclusion:
Putting down a big deposit reduces the shafting you get from both the finance company and your friendly local truck dealer. This means you make more money for yourself which is why you are going to all the trouble!
Other points to take note of:
Selling a two or three year old truck will give you back your deposit plus a bit of profit (5-10,000 each time you change) which helps keep pace with the price rises over the years so your finance stays the same each time you change or gives you a bigger deposit each time so reducing the amount you need to borrow.
Selling a five year old for £20,000ish still leaves you with a mountain of finance to climb on its replacement.
Then there is the great tax allowance issue…new trucks give you something to write off against tax, old trucks that behave themselves leave you with a nice big tax bill.