Updated: Jun 28
Being an owner-operator in the trucking industry comes with many expenses that must be taken into account in order to be successful. Here is a guide to some of the most common expenses that owner-operators may encounter:
Truck and trailer purchase or lease: The cost of purchasing or leasing a truck and trailer can be one of the biggest expenses for an owner-operator. This cost can vary depending on the make and model of the vehicle, as well as whether it is new or used. In my 13 year experience if you want to have reliable truck you should look for a truck no more than 5 years older and no more than 500k miles on odometer. If you are into older trucks expect to invest more money in engine, engine components, wiring and truck suspension, since older truck tend to be more wore out and age and miles driven are taking a toll on a truck overall.
Insurance: Insurance for owner-operators is required by law and includes liability,
cargo, and physical damage insurance. Cost can vary depending on the carrier and the coverage. When you drive as owner operator under someones else's authority expect to pay between $300-$400 a week for cargo and liability insurance. If you want to operate under your own authority, for the first couple years you could expect to pay pretty much the same amount depending on you driving record and your credit score, sometimes if your credit and driving record are not at it best cost coulb be even higher.
Maintenance and repairs: Keeping your truck and trailer in good working condition is essential for safety and compliance. Regular maintenance and repairs can add up over time. Now this could be tricky and there is no one number to tell, but in my experience with trucks 3-6 years old i was investing in repairs and maintenance between $5000 and $20000 annualy, it also depends how you drive that same truck, how heavy your loads are etc.
Fuel: Fuel is one of the biggest expenses for owner-operators and can fluctuate depending on the price of fuel.
Tolls, permits, and licenses: Owner-operators must pay for tolls, permits, and licenses in order to operate legally on the road.Tolls can play a big roll in you monthly gross- net ratio. If you drive constantly in east coast expect to pay a lot of money in tolls. For example one month a was driving pretty much along east coast all the way to Ohio and Indiana, and my monthly toll bill was high as $1700 just for one month on tolls, which is mind blowing, and it can take a big chunk of your pay.
Taxes: Owner-operators are responsible for paying taxes on their business income and any income they earn as a self-employed individual. Now this is a good and bad thing being an owner operator. Whats good is you deduct everything from your taxes, which is fuel, tolls, truck payments, trailer rental, scale tickets, repairs, oil changes, factoring %2-5 fees just to name a few. Whats a bad thing you might wonder is your Net income will be low which means youll pay lower taxes than and company driver but you will have difficulties getting a mortgage for example which nobody is talking about when you are self-employed, because banks are looking at your net income, not your gross income. There are some bank statement mortgages that you get approved for with higher interest than conventional loans but thats a different topic.
Accounting and bookkeeping: Owner-operators must keep accurate records of their income and expenses for tax and compliance purposes.
Communication and technology expenses: Owner-operators must have a working communication system to stay in contact with dispatchers and have access to load boards, GPS and other technologies.
Professional services (lawyer, accountant, etc): Owner-operators may need to hire professionals to help them navigate legal and financial issues related to their business.
Health insurance and retirement savings: Owner-operators are responsible for their own health insurance and retirement savings, this can be an additional expense.
It's important to remember that these expenses can change over time and can be affected by various factors like fuel prices, insurance rate, taxes and regulations. Keeping track of these expenses and budgeting accordingly can help owner-operators stay on top of their finances and make informed decisions about their business.
Here are some examples
Company fees ranges from %10 up to %20 of total weekly gross. Let's say company makes you $8000 a week gross, other companies might charge up to %20 of those $8000, our company only charges %10. DIfference can be up to $800 a week, you would agree thats a lot of money!
Truck payment can range wildly, depends on year, make, mileage etc. But I would say in my humble opinion that average used truck payment is between $1500-2500 a month
Insurance - there is cargo and liability insurance which can cost up to $400 a week, we currently offer $300 a week. We understand that times are challenging in 2023 and that more people struggle, that's why we decided to lower our rates to bare minimum.
There is also truck and trailer physical damage insurance, which go separate but I would say the average based on example of truck price would range between $200-$350 a month, for a trailer that would be significantly lower.
ELD service - $40 up to $100
Truck registration - Average by state $2000 annually
Shield Carriers LLC
1730 W Palm Dr
Mount Prospect, IL, 60056