[InIdaho]

On OOIDA.com, they provide a cost per mile spreadsheet. The article explains and the spreadsheet shows the truck mortgage as the second highest fixed expense. That I can appreciate but how should depreciation be understood? While sample values for maintenance & repairs are given no value for depreciation is offered. Trucks do wear out, right?

Can someone help with a bit of insight? How many miles should we expect from a properly driven well maintained truck before it needs replacement? Less concerned with IRS dictated depreciation rates, rather the practical life expectancy of a truck.

Thanks John :+

[LDB]

Many many variables come into play. As mentioned, class 7 vs 8 makes a very significant difference. Are you looking for lifespan without overhaul or with? I'd guesstimate a properly and well maintained class 7 is good for a million miles with an overhaul and same case for a class 8 would be 2 million miles. With the attention to detail and abilities that Bob has I'd say those numbers are on the definitely low side. Unfortunately not all of us are gifted in that way but 1 and 2 million should be reasonable expectations.

Leo Bricker, 73's K5LDB
OOIDA Life Member 677319, JOIN NOW
Owner, Panther trucks 5508, 5509, 5641
EO Forum Moderator
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[Doggie Daddy]

We
>have a class 7 truck with a 300 cat motor and the estimated
>life on that motor is 300,000 but we have talked to many
>that have been way over that. We have approximately
>440,000 on ours and are hoping to get to at least 600,000
>before we look at getting our next truck.

I believe you are talking about the Cat C-7 engine,and according to the Cat web site the life expectancy or B50 life of that engine is between 450,000 to 500,000 miles

.http://ohe.cat.com/cda/layout?m=85520&x=7

[InIdaho]

Thanks Bob and Linda,

If I understand you correctly, carriers such as FedEx will allow the continued use of a truck past 5 years of age so long as it passes an annual visual inspection. Is that inspection primarily cosmetic in nature?

If 120,000 is an average annual mileage for expediting teams, then 600000 miles is accumulated in about 5 years. Are the trucks basically done at 600,000? Do most owners turn over the keys at that time and start over with a new truck and a new payment?

What are your thoughts on replacing the engine at 600,000 and keeping up on the appearance in order to pass the visual inspections and then stretch another 2,3... more years life from the truck?

Thanks John
:+

[terryandrene]

John:
There is no finite answer to your question and I, as a cargo van operator, certainly have no good answer for you. But, I have questions that may help others help you.

Will you be expediting OTR in your truck or doing P&D work around Boise? Will you be owning a class 8 tractor? Will you be the principal driver? Will you have a class 8 or 7 straight small (<5000#) truck, or a class 8 or 7 Large (13,000# capacity) truck?

[greg334]

Talk to a real accountant who can explain this to you. Most will spend the time with you to make decisions for your business.

This is not an area that anyone can apply a cookie cutter to come up with a business, but rather need to shape things for one's personal goals and needs.

[TeamCaffee]

This would depend on if you get a class 7 or class 8 truck. How you maintain the truck and how you drive the truck. We have a class 7 truck with a 300 cat motor and the estimated life on that motor is 300,000 but we have talked to many that have been way over that. We have approximately 440,000 on ours and are hoping to get to at least 600,000 before we look at getting our next truck.

When you start looking at trucks ask what the life expectancy of that class of truck is. Also you need to be aware that most companies have an age limit on trucks that are all ready in the fleet and then will do a visual inspection on them every year after that.

[InIdaho]

Greg, its perhaps just a bit to early in the process for me to bring out the accountant. I’m just beginning to explore expediting. Talking with recruiters about Team OTR with a 22-24’ straight truck, probably a class 7. Many more questions than answers at this stage. My questions on truck depreciation came up after looking at the OOida sample spreadsheet. Since it does not include depreciation, I wondered why not.

I hoped to elicit some insight on what you owners think about truck obsolescence: what are your expectations and how do you plan for and get the most out of your trucks life.

Thanks for your observations. I really appreciate every ones comments. They do give me some needed context and help shape my perceptions of expediting.

John
:+

[x06col]

Not sure what your question is here. Do you want to know how to depreciate a truck, or, maintain it for the long haul?

If you want depreciation info, that is a good question. However as newbees, you probably won't need depreciation help the first year or so. I'd extend it out some.

If you are going to attempt to use your equipment for an extended period, all you really have to do is listen to your horse, don't cowboy it, and put a systematic replacement program in place for wearable assemblys. I am driving a class eight 1992 model, and have had 0 emergencys or failures to date.

[TeamCaffee]

The company you would lease with will also have a program on how old they will keep trucks on. You will need to check with the companies you are considering leasing with to see how old a truck can be before they will not sign a lease with you. I believe a Class 7 truck only gets 5 years with FedEx Custom Critical before you have to bring the truck in for a visual inspection each year before your lease will be signed.

[LDB]

Originally Posted by InIdaho

Talking with recruiters about Team OTR with a 22-24’ straight truck, probably a class 7.

If you anticipate a team operation running well and long enough to challenge the 5 year rule that many carriers have I would highly recommend a class 8 instead of 7. Looking at Sterling, the only one I know of making both 7 and 8 right now, you will spend maybe 10% more for the class 8. For that you get a truck that is far tougher than any job you'll throw at it. Should you choose to add a tag axle it will still be above any challenge you'll give it. The half life of the chassis will jump from +/- 500k miles to 1M miles, if not more.

If you were planning to operate solo a class 7 would be a more reasonable suspect since the mileage wouldn't increase so fast. A team can, and should, wear out a class 7 before it's time. You'll pay a little more for the 8 up front. You'll pay a little more for each PM since it holds around 11 gallons of oil vs. the 7-8 gallons in a class 7 engine. You'll save multiples of that when your overhaul is at 982, 473 miles instead of 507,182 miles.

After you've put in 2-3 years, should you decide this will be your path for another decade or more, you'll have a more valuable truck with a class 8 to either continue or trade/sell to get your ideal truck. Look at the long term possibility, not just the 5 year sprint.

[BigBusBob]

Scrolling real quick I did not see anybody mention the area you'd be driving in... though it was said in a nutshell when it was mentioned if you'd be driving locally or OTR... however I would like to also add that the part of the country you'll be driving in also makes a difference... Harsh winters or mild winters... there's a big difference in what needs attention on a truck (of any kind) when you're driving north of I-40/I-20 and or along I-10. Along I-10 you'd have to keep in mind the brutal summers you'll have to endure. Up North you'll have to keep in mind the ice and salt spray.... and constantly watch for corrosion from snow removal chemicals/ingredients. Mountains? Desert? North East where you'll encounter more stop/go traffic? The best thing is to do what the men and women above said... keep a watchful eye on all aspects of the machine.

BigBusBob

[greg334]

John,
I took it that you were looking at this as a possibility but I feel that building a relationship with professionals, even when exploring a possible career is helpful in the long run.

Even if you don't choose this profession, you will be better informed and educated to make good and informed decisions and allow you to have the right resources in the long run not to mention it does help with a reputation and alike when dealing with people from companies and vendors.