I am a CPA... Don't make the decision to buy a equipment or truck just to save money on taxes. It is one thing to play with the timing of buying equipment between years that you were going to buy anyways, but buying simply to save on taxes is a losing proposition. You buy a $50k truck just to save $20k in tax.... You are still spending $50k on a truck you didn't need, so met you are still out of pocket $30k you didn't need to, that you could have been spending on marketing, employees, and growing your business in meaningful ways. Don't let the tax impact drive what otherwise has no real business reason - you'll always end up with no cash.
I buy 90s models chevys. I’ve got 4 trucks 1 3500 crew cab, 1 2500 extended cab 4x4 and two 1500s. All together I have $7,000 cash total but I work all 4 of them no problems. All low mileage and clean. I rather have something a bit older and clean then pay debt. Just my opinion.
Hey Chris! I'm curious to know how the cost of down time effects business. I hear that older trucks have higher rates of breakdown/repair time. How does that factor in?
@@braedono9038 also in my opinion and being around new and older trucks I have seen more down time out of the newer trucks. I’ve got buddies with the three big brands in America and all of them have some type of issues. That’s what steered me in the direction to just keeping these ones. Plus if I ever had to a brand new motor and trans will be around $6000 so I might as well just do that and keep working these trucks vs paying 12k for a decently used truck to 80k for a new truck if that makes sense?
You still don't get the picture I've been doing this for years since I was a little kid I've learned from my mistakes and I'm moving so all I have to say to you is good luck with your business because you will need it.
Your not saving anything on taxes just avoiding them. If you have a 50k net buy a 50k truck to get net to zero those future payments of say 1000 a month,12k in a year will become net as the asset has already been written off. That means whether or not you have 12k in your bank DEC 31st of the following year the IRS considers your payment as income. Its easy to get in trouble doing this as the next year you now have a 50k net plus the 12 so your net is now 62k. Then you buy a 62k excavator...... and the snowball gets bigger, its called kicking the can. Start a Simple IRA day one
I've heard a lot of people saying not to finance stuff "going into this recession" when do you think a good time to get into a new truck will be? A lot of equipment we've got is nearing the end of its life cycle MLB due for replacement this year or next year
Thanks mike! I’m definitely a conservative CASH maintenance company! Lol this information was extremely helpful I appreciate you spending the time to educate
Im a handyman (corporation) with zero employees on my third year...tons of work. My 2005 work van has a low mileage engine but is rusting and parts are failing constantly. Many parts are discontinued and harder to find. Repairs at the shop are taking longer requiring me to lose work four to ten days at a time. I have more work than i can handle but do not desire to grow my business.. Paying cash for a new 70k van would leave me penniless. Would leasing be the best option?
I’m in the exact same boat. You can find ford transit 250’s for about 25k. I’m buying one in cash and selling my truck to offset it. I can make 10-20k a month with a reliable vehicle as a handyman.
I never understood buying a brand new truck. A good used truck will cost you "0" aside from the insurance/gas. If it ever needs a repair it wouldn't be a lot. Imagine spending 800 maybe once a year over a few thousand a year. That is money that you can use to buy new equipment, invest in marketing, and things that will actually help you in your everyday. The newness of you truck doesn't really do anything aside from "looking good'.
Hey Ray! Interesting point! A couple things here though. What's the cost of down time. Let's say that 800 dollar repair puts a crew out of commission for 3 weeks( In a normal market, this makes sense. In 2023 probably 2 months of time before all parts are sourced). How does that factor in? Also, newer vehicles are more fuel efficient. How does that factor in?
@@thegentleman03 the last thing I would want is to owe money on a 10,000$ or less truck (which are usually at least 10-15 years old even if you get them privately) that could have a transmission blow, engine issues, etc. I’d rather there not be insult to injury in that event and owe money on a truck I need to spend thousands repairing
@@gingerstudios5221 exactly. On the other hand, have you ever looked into short term rentals for growth? Pretty much no capital up front and flexible down to the day at similar cost to financing. Also a good strategy to employ if you find the right vendor with reasonable prices
@@braedono9038 yeah although frowned upon I’d just buy a truck on a credit card. There’s a ton of lenders who offer 0% for the first year so worst case you have 12 months to pay it back 🤷♂️
Ever heard of month to month rentals? Low to no capital up front. Completely tax deductible. I work with a company that does seasonal rentals. It's around the same amount as financing. With the added benefit of flexibility
I personally hate any form of debt. Feels like short term gain for long term pain. Bought my truck outright, and feel poorer of pocket, but free of mind! Thanks for making this so clear 👍 -G-force
G-force, have you ever considered short term rentals for growth? Low to 0 upfront capital costs. New trucks. Flexible down to the day that it isn't needed
I am a CPA... Don't make the decision to buy a equipment or truck just to save money on taxes. It is one thing to play with the timing of buying equipment between years that you were going to buy anyways, but buying simply to save on taxes is a losing proposition. You buy a $50k truck just to save $20k in tax.... You are still spending $50k on a truck you didn't need, so met you are still out of pocket $30k you didn't need to, that you could have been spending on marketing, employees, and growing your business in meaningful ways. Don't let the tax impact drive what otherwise has no real business reason - you'll always end up with no cash.
AMEN!!!!
Id rather have fun and buy nice things for myself than for uncle sam🤷🏽♂️
I buy 90s models chevys. I’ve got 4 trucks 1 3500 crew cab, 1 2500 extended cab 4x4 and two 1500s. All together I have $7,000 cash total but I work all 4 of them no problems. All low mileage and clean. I rather have something a bit older and clean then pay debt. Just my opinion.
Hey Chris! I'm curious to know how the cost of down time effects business. I hear that older trucks have higher rates of breakdown/repair time. How does that factor in?
@@braedono9038 also in my opinion and being around new and older trucks I have seen more down time out of the newer trucks. I’ve got buddies with the three big brands in America and all of them have some type of issues. That’s what steered me in the direction to just keeping these ones. Plus if I ever had to a brand new motor and trans will be around $6000 so I might as well just do that and keep working these trucks vs paying 12k for a decently used truck to 80k for a new truck if that makes sense?
This video is really helpful! Should be number 1 “before buying a truck” for a business
You still don't get the picture I've been doing this for years since I was a little kid I've learned from my mistakes and I'm moving so all I have to say to you is good luck with your business because you will need it.
lol okay
@@MikeAndes I will give you one thing the only thing I learn from you is the octopus that's it
get help bro
What are you talking about it? 😂 Mikes advice is very solid.
Rotation. Buy new 1 at a time and rotate it down what I do
How long do you suggest keeping a truck?
Mike great job explaining all 3 methods in the video. Very well done.
Thanks 👍
Your not saving anything on taxes just avoiding them. If you have a 50k net buy a 50k truck to get net to zero those future payments of say 1000 a month,12k in a year will become net as the asset has already been written off. That means whether or not you have 12k in your bank DEC 31st of the following year the IRS considers your payment as income. Its easy to get in trouble doing this as the next year you now have a 50k net plus the 12 so your net is now 62k. Then you buy a 62k excavator...... and the snowball gets bigger, its called kicking the can. Start a Simple IRA day one
I've heard a lot of people saying not to finance stuff "going into this recession" when do you think a good time to get into a new truck will be? A lot of equipment we've got is nearing the end of its life cycle MLB due for replacement this year or next year
Maybe next year or two once interest rates come down and the demand for vehicles comes down that's when dealerships offer the most incentives.
@Levi Wright, have you ever looked into short term rentals? Its good to have a flexible option between purchase cycles or for down times.
Thanks mike! I’m definitely a conservative CASH maintenance company! Lol this information was extremely helpful I appreciate you spending the time to educate
Im a handyman (corporation) with zero employees on my third year...tons of work. My 2005 work van has a low mileage engine but is rusting and parts are failing constantly. Many parts are discontinued and harder to find. Repairs at the shop are taking longer requiring me to lose work four to ten days at a time.
I have more work than i can handle but do not desire to grow my business.. Paying cash for a new 70k van would leave me penniless. Would leasing be the best option?
Same boat what you end up doing?
Same exact boat also. I need answer!!
I’m in the exact same boat. You can find ford transit 250’s for about 25k. I’m buying one in cash and selling my truck to offset it. I can make 10-20k a month with a reliable vehicle as a handyman.
Washington State must ve VASTLY different than Michigan. So much is not true for our state.
I'm interested in what specifically is different. Do you have a quick example?
I never understood buying a brand new truck. A good used truck will cost you "0" aside from the insurance/gas. If it ever needs a repair it wouldn't be a lot. Imagine spending 800 maybe once a year over a few thousand a year. That is money that you can use to buy new equipment, invest in marketing, and things that will actually help you in your everyday. The newness of you truck doesn't really do anything aside from "looking good'.
Hey Ray! Interesting point! A couple things here though. What's the cost of down time. Let's say that 800 dollar repair puts a crew out of commission for 3 weeks( In a normal market, this makes sense. In 2023 probably 2 months of time before all parts are sourced). How does that factor in?
Also, newer vehicles are more fuel efficient. How does that factor in?
Well put together Mike. Thanks! I have used debt from day 1. But my trucks are small low cost pool trucks
Where are those new 30k trucks you talk about? Let me know as I would love to buy one.
“New” to me 😀 (used)
@@MikeAndes ok I thought you had a honey hole somewhere that you may want to let us in on!😂
Probably a smaller single cab truck. More like 35 to 40
All of this presupposes income. Can't guarantee it! Need to pay cash for vehicles.
Have you looked into short term rentals? Some good no capital down options can help growing businesses get off the ground when credit isn't an option
Mike great video...most folks want instant growth and gratification!
Cash for trucks under $10k, financing for anything more
How about 12k? Could cash in for that
@@thegentleman03 you get the point. It’s not a strict formula it’s just to make sure you don’t owe money on a cheap vehicle
@@thegentleman03 the last thing I would want is to owe money on a 10,000$ or less truck (which are usually at least 10-15 years old even if you get them privately) that could have a transmission blow, engine issues, etc. I’d rather there not be insult to injury in that event and owe money on a truck I need to spend thousands repairing
@@gingerstudios5221 exactly. On the other hand, have you ever looked into short term rentals for growth? Pretty much no capital up front and flexible down to the day at similar cost to financing. Also a good strategy to employ if you find the right vendor with reasonable prices
@@braedono9038 yeah although frowned upon I’d just buy a truck on a credit card. There’s a ton of lenders who offer 0% for the first year so worst case you have 12 months to pay it back 🤷♂️
Seen the add.
Let’s goooo
Well said Andy. I'm in WA too. Great solid advice. 😀
Most car companies won't let you lease a "work" truck
@@lawncaretoamillion that's where I went. They told me "we don't lease landscape trucks"
Ever heard of month to month rentals? Low to no capital up front. Completely tax deductible. I work with a company that does seasonal rentals. It's around the same amount as financing. With the added benefit of flexibility
@@braedono9038 I've never heard of that. I'll look into it. Thank you
@@kennethalynn Flex Fleet Rental :)
Dave Ramsey all the way debt free is the way to be 💯 of the time
I’ve been waiting on this video 🔥🙏🏾🤞🏾
Maybe lease a estimate vehicle but never a daily actual Work truck!!
Why?
Are you in augusta georgia?
We have one location there. But we have 120+ locations. I am in WA state
Seen it. Great information bro
Good stuff.
I personally hate any form of debt. Feels like short term gain for long term pain. Bought my truck outright, and feel poorer of pocket, but free of mind!
Thanks for making this so clear 👍
-G-force
G-force, have you ever considered short term rentals for growth? Low to 0 upfront capital costs. New trucks. Flexible down to the day that it isn't needed
I saw your ad #100k let’s gooo🚀
Profit??? What's that??? LMAO😢