How much does it cost to be an owner-operator?
August 19, 2019
Before becoming an owner-operator, we suggest doing research in order to set yourself up for success. First, see our step-by-step guide of how to become an owner-operator, and then determine the expenses associated with owning a semi-truck.
Ultimately, how much money you need to become an owner-operator depends on how you finance a truck and what documentation you need. How much it costs to be an owner-operator once you are out on the road depends on what your monthly expenses are.
With help from tax and accounting firm for owner-operators, ATBS, we have complied a general list of the expenses owner-operators can anticipate in their first year as a business owner, including the cost of owning a semi-truck.
9 factors that impact how much it costs to be an owner-operator
1. Buying a semi-truck
If you choose to purchase a used semi-truck from somewhere like Schneider Used Trucks, you can expect to pay between $45,000-$100,000. However, many places will match reasonable offers, so you may have the ability to drive the cost down a bit.
If you are leaning toward purchasing a brand-new semi-truck for your business, anticipate spending about $125,000-$150,000, depending on the make and model you go with.
2. Leasing a semi-truck
Maybe you don’t have a large enough down payment to buy a truck or don’t want to risk having the responsibility if something happens to your truck. If that’s the case, leasing a semi-truck from somewhere like SFI Trucks and Financing is also an option.
You can expect to spend about $1,600 to $2,500 each month, depending on the company you lease from and what type of truck you choose. Many companies require little to no money-down on the truck so your upfront costs will likely be low.
The documentation owner-operators are required to obtain vary by state. The below prices are estimates of what you can expect.
- MC/DOT number: $300
- Business registration / LLC fee: $50-$300
- PrePass: $14.99 monthly
- IRP Credential: $1,700 – based on percentage of miles you operate in each state
- IFTA Decal: $10
- BOC-3 Form: $20-40 – necessary if doing interstate business
- HVUT: $550
Most carriers require owner-operators to be insured. Owner-operators who lease-on with Schneider, for example, are required to carry occupational accident insurance and unladen/non-trucking bobtail insurance. Physical damage insurance is also recommended.
An owner-operator can expect to spend about $3,000-$5,000 a year or $250-$400 per month on insurance.
Fuel is one the largest costs of owning a semi-truck, as most owner-operators spend an average of $50,000-$70,000 annually or $4,000-$6,000 each month.
To get an estimate of how much you will spend on fuel, take the price of fuel per gallon and divide it by what your average miles per gallon is. Then multiply that number by how many miles you expect to run each week.
Some of the ways to get freight cost money while others do not. See our full list of how to get loads as an owner-operator and how much each method costs here.
7. Truck maintenance
Your maintenance costs will be dependent on if you buy a new or used truck, how much parts cost for the brand of truck, where you get maintenance done, etc.
If you choose to get your loads by leasing-on with a company, the company may have programs to help offset costs, like Schneider’s Purchase Power Program.
It’s easy to forget to include the cost of food in your monthly budget. To save costs, owner-operators can invest in a refrigerator and microwave to put in their trucks and purchase food from grocery stores vs. spending more costly meals at restaurants.
New owner-operators often forget they are required to pay taxes on a quarterly basis rather than having taxes automatically withheld from their paycheck like company drivers. It is recommended to set aside 25 to 30 percent of your weekly income for quarterly taxes.