• Joel Dieu

Starting Out As a Owner Driver - Do You Understand What Is Required?

Start Generating Income With The Right Equipment & Finance Solution



As an owner driver, you have the capacity to work with your own vehicle and/or equipment to generate income. The vehicle and/or equipment is classified as a "Profit Generating Asset" as it required to generate revenue for your business.

There are many industries that require owner drivers on a frequent basis. This includes delivery services, freights, earth moving, and so much more. While your day to day work may be similar to working on an employment basis, jumping into a owner driver arrangement does require consideration of key factors to ensure that you are best prepared and ready for success.

What Is An Owner Driver?


Being an owner driver is different from working on an employment basis. As an employee, your employer will generally provide you their equipment to carry out work on their own terms. On the other hand, as an owner driver you have the autonomy to work as much as you please and in additional are required to supply your own equipment/vehicle required to carry out the work. This opens up more opportunities to earn more income and meet your future financial goals faster due to the increased upside potential that is available.


It is also common for owner drivers to work for multiple sources to diversify their revenue supplies. This provides you the additional freedom to allocate your time as you see fit and increasing the upward potential of earning more income. Speaking of upward potential, there may be scope to add additional workers under you so they are able to earn more income for themselves and you!

Important considerations for Owner Drivers

Starting a new venture is an adventure in itself and requires pre-planning to ensure you remain committed. It is important to get the small steps right so the big picture falls into place. Here are some steps involved in getting the finance sorted and ready to go which covers both the finance and work side of things:


You Have An Active ABN


As a subcontractor it is a minimum requirement for you to operate through your own ABN. This can be as a sole trader or as a company where you are the sole director. Partnerships are acceptable where all the parties are involved in the business.


There may be some instances where GST registration may be required by certain providers if you are contracted to earn above the GST threshold of $75,000 per annum. However, this may not be a mandatory requirement depending on whom you plan to sub-contract to. GST registration may not be fundamental from day one but if you do anticipate that your annual turnover will punch well above the $75,000 threshold, it may be worthwhile getting it done sooner than later to ensure ATO rules are met.


​Your Background And Experience


Are you experienced in the work that you will be engaging in? Any previous work or industry experience is highly regarded in your favor. Natural rules apply - the more work experience you have under your belt, the better.


It is recommended to utilise any existing or previous work relationships to secure future work. For example, a previous employer that you have strong ties, who can help accommodate work for you. Generally this is a win-win scenario as sub-contractors are generally easier to manage over employees whilst the rate of pay for sub-contractors is higher compared to working the same role but as an employee.


Your background and experience is influential to your success. This is similar to applying for jobs on an employment basis - the more experience and expertise you have in your field of work, the higher your rate of pay and likelihood of continuing in your contracted role. Some contractors may consider drivers with little to no experience but this is likely to have an impact on the frequency of work available to you. This brings us to our next point...


Work Security Lined Up To Generate Income


Have you engaged a work source and solidified your rate of pay? We always recommend a work source letter or work contract which states your work terms which includes your rate of pay and hours required per week. This ensures that you have terms clearly stated in writing and what is expected of your contractor.


For the purposes of securing finance approval as a start-up owner driver, a work contract or letter is essential. This is ultimately relied upon for income verification and to ensure that you have anticipated work lined up as an owner driver. Where there is potential for you to expand your income sources to multiple contractors, some level of stability does need to be shown from a primary source first to make lenders comfortable that your income source is ongoing.


In addition, it is worthwhile to consider who your contractor is. Are they a well established organisation that has been running for decades, or are they a border line stranger? This can be a substantial factor when considering income stability to ensure you can operate as a business. In addition, such stability may be factored in for any financial applications.

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Your Overall Expenses Of Your New Vehicle Or Equipment


The flip side of your income are your expenses. This includes future loan repayments for your new vehicle and running costs. Your main operating costs to consider includes fuel, vehicle maintenance and registration costs.


It is fundamental to remember that whilst there is more upside position than in employment, there is significant expenditure involved. After all, you are operating a business! As no work arrangement is the same, the level of anticipated costs varies greatly. Initial projections are important to factor in what you get to pocket and what you need to set aside for costs and taxes.


We highly recommend that you keep the receipts and records of all business related expenses. This will come in handy when you lodge your tax returns as you'll offset more tax costs than you were able to as an employee in the same position. Speaking of ways to be tax effective...

The Most Suitable Finance Product For You


Every finance product has different tax implications which you can take advantage of. Your tax savings will be largely dependent on the finance product itself. This includes the level of depreciation of your vehicle which can vary based on the year, make and model of what you're using.


Whilst you may prefer to own the vehicle, the option to lease a vehicle may prove to be more tax effective. In such an instance you may not own the vehicle at present but have the option to do so later on at an agreed value. This will vary from lender to lender. We are more than happy to chat about the pros and cons as each product varies more or less depending on the particular asset sought.

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I​n A Nutshell


Whilst there are multiple upsides to becoming an owner driver, as with any start up venture, pre-planning is essential to success.


During these times, we recommend enquiring about finance before jumping into a work contract. However, to ensure your business runs smoothly, we are happy to run through the above points in detail ahead of time to ensure that we pave the way to success for your owner driver venture.

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