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15 Must-Know Tips When Considering Becoming A Leased Owner Operator

[fa icon="calendar"] Wed, Apr 10, 2013 / by Ed Godfrey

Truckin Ed Godfrey resized 600The two most important things to consider when becoming a leased owner-operator are the company you lease to, and the maintenance of your truck. Without either of these in place, you won’t be able to operate a successful business.

You obviously enjoy driving or you wouldn’t consider making the transition from company driver to owner operator, and you already know what the industry has to offer. But when leaving a company, you’re also going to leave some of the benefits they provide; health insurance, retirement plans, investment opportunities, a steady paycheck. You’ll also lose the hand-holding when you need help and the dispatched loads when you need freight. When you’re on your own, you won’t have that.

What you will have is the opportunity to create your own future by choosing your own freight and deciding how much money you want to make doing it. If you’re confident you can do that, here are fifteen things I’d say are most important to keep in mind when you’re making that jump.

1. Don't ever, ever, ever purchase a truck from a trucking company and haul for them at the same time. They will offer you a ridiculously low percentage to “work” for them. Most trucking companies have these lease/purchase programs set up to bleed you dry and make more money off of you than when you were a company driver for them.

2. Always look for a company comprised of owner operators with years of experience. If you are out there talking to drivers, you’ll eventually get an idea of which companies these are.

3. Look for a company that allows you to pick your freight rates and load choices. This will give you maximum flexibility in running your business.

4. One of the biggest pluses to being an owner operator is being able to take time off whenever you want without being hassled. If you can’t do this, stay with your current company.

5. When you become an owner operator leased to a company, there is one important thing to remember: the freight is endless and companies are always in need of drivers to haul it. Don't feel obligated to accept a load from a broker or agent who’s claiming all hell will break loose if you don’t take it. They need your truck. Make sure the load can be hauled on your schedule, and if not, demand to be compensated for the extra hassle.

6. Reputable agents who are established don't need you and couldn’t care less if you ever call them. There are agents who have hauling contracts with companies that were you able to get in on them, would put you in a position where you could retire in five years. The competition for these is fierce. Drivers fight for these runs with guile and expertise, so don’t be surprised if you can’t get your foot in the door when it comes to these lucrative loads. When one load pays enough to allow you to take a month off in Aruba, you can bet every driver who knows about it is going to be fighting like a dog to get it, pushing aside anyone who gets in their way.

7. Some new agents – I like to call them agents, but brokers or salesmen work too since they all basically do the same thing – are courting new customers and starting to build a reputation. They need good drivers like The Pope needs Catholics. They don't always get the good freight in the beginning, but if you get your foot in the door with one of them while they’re building their agency, when they obtain those contracts there’s a good chance they’ll rely on you to help them succeed. It never hurts to build a good rapport with these people.

8. When you drive your own truck, you want to keep maintenance and overhead to a minimum. The best way to do this is by driving slowly and carefully. You are no longer trying to drive the most miles you can in a day for a fixed (per mile) rate. Ideally you have chosen a company that allows you to obtain the highest rate per mile on each load that is available to you, and run at a pace that won’t stress out your equipment. On average, you’ll want to drive between 57 to 60 miles-per-hour; conserve your brakes in favor of using your engine brake; and get monthly oil changes and weekly grease jobs. Regular oil changes and grease jobs are the cheapest mechanics you can hire.

9. You must know how to maintain your equipment. This is a constant owner operator theme. You don't have to necessarily do the work, but you do have to understand what the mechanic is doing. The only way to check their work is if you actually know what you’re checking. This can be frustrating because I have been ripped off by both reputable dealers and people with decades of experience, as well as the little shops trying to build their customer base. They will all take your money if you don’t know what you’re paying for. It’s essential to find a shop whose mechanics behave as if your truck is a person and they’re the doctor. You wouldn’t go to a doctor who just started replacing things without knowing what to replace or why. If you’re unsure about them, leave and make sure you document everything that was done to your truck. Oftentimes, if it’s a national company, the work that was done wrong can be corrected at another facility if under warranty. But if you don’t keep good records, you won’t even know where to begin.

10. When you take your truck to a shop, the first thing you MUST do is get a written estimate. Once you get the estimate, make sure you indicate in writing (on the estimate) that any deviation from the detailed repairs shall be brought to your attention, and NO work is authorized unless you are first informed of the cost in writing and you approve it. Monitor your truck repair to ensure it’s being handled in a businesslike manner and that the “doctor” working on it is confident and knows what he’s doing. Don't let someone manipulate you into trying several fixes “hoping” it will solve the problem. If they don't know, don't go!

11. Make sure any mechanic working on your truck is ASE Certified. If you’re having specialty work done, make sure the shop is an authorized dealer or service center for what they’re working on – two examples are engines and transmissions. Small shops typically only offer warranties through their shop; nationwide chains have warranties which are valid at any of their locations. Some of these locations, because of the higher amount of truck traffic, will be backed up and tell you they can’t get you in for a few days or even a week. If you aggressively pursue them, expressing your need to get the warranty repair done, they will often find a way to squeeze you in.

12. Always pay with a credit card if possible. If the shop doesn't take credit cards, be leery. Some shops don’t take credit cards (for various reasons), but it’s in your best interest to pay with one. Settling disputes and getting your money back if there is a problem is easier when using credit than when you use cash.

13. Make sure the shop can fix everything. Don't take the truck to a place that only fixes tires if you also have a brake failure. Don't take the truck to a shop that only does brakes if you have a bad differential. Get an estimate in writing which completely diagnoses the problem and details any additional issues that may be related to the source of the main problem.

14. Truck dealerships are the best places to go as they typically have all the tools needed to properly diagnose problems with your truck and can usually fix everything, bumper to bumper. However, don’t just assume because they’re a dealer, they can do the work. I’ve been to dealerships that sold the truck I was driving, yet weren’t authorized dealers for my particular engine You must do your homework before doing business with anyone, especially if your truck is being towed! Know where they’re taking it.

15. Don't rush into anything. Being an owner operator requires patience. This is a decision which requires a fair amount of homework on your part. Read industry publications, take notes, talk to drivers, learn as much about the business as you can and be flexible in the time it takes you to transition from your company position to self-employment.

One of my many philosophies is, if I don't do it someone else will. I don't want that. I want the work! I want the paycheck!

I am entitled to the business because I work hard and smart to get it done right. Maybe someone out there is faster, cheaper, and more appealing than me, but that’s their business. Mine is to do the best I can with what I have. And what I have is drive, ambition, goals and a truck. And when you own the truck, you’re the boss and you make the final decision to sink or swim.

I chose to SWIM.

Truckin' Ed Godfrey 

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Topics: Truck Driver, Owner Operator, Cost savings

Ed Godfrey

Written by Ed Godfrey

A Texas native and former United States Marine, Ed was raised by truck driving parents. Since he's always loved being on the move - whether riding bicycles for pleasure, navigating waves on a windsurfing board, or running to keep his mind and body strong - he decided to give trucking school a whirl. He had a sense of adventure and was comfortable with his own company, so when he decided to join a profession that would keep him busy 24 hours a day, he knew he’d thrive. At 21, he started out as a company driver but quickly transitioned into being an owner-operator. At 27, after his nine-year contract with the Marines Reserves was fulfilled, he purchased his own truck and signed on with Landstar, the largest owner-operator carrier in the nation, and has been running his own business since. He is often the youngest owner-operator in the groups of drivers he socializes with and shares his knowledge freely when asked about “how he did it”. Since 2004, he’s been running team with his girlfriend Salena Lettera, utilizing the space in their 132” custom sleeper truck while hauling freight throughout the lower 48 states. Ed maintains a website Truckin Ed to periodically share information on trucking related subjects.

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