Being an independent driver can mean a good income, but it also comes with some planned and sometimes unexpected costs. If you are an independent driver and need some extra funds from time to time, there are several options, including cash advances. Cash advances can mean the money you need right away to take care of your small expenses. There are also loan options available for higher costs. Haven’t been driving that long? Continue reading about the different expenses that can come up for contract drivers and cash advance options when you need money to pay for them.
Who Qualifies as an Independent Driver?
An independent driver is anyone who uses their vehicle for contract driving work for one or more companies; they are a part of the independent contractor workforce.
An independent driver can be a truck driver with a commercial driver’s license (CDL), a rideshare driver (Uber driver, Lyft driver, etc.), or a delivery driver with a standard driver’s license. Along with the proper license, an independent driver must have insurance and be either a United States citizen or a permanent resident.
This kind of work can be great for those who want to work for themselves, set their own hours, and want a steady source of income for long-term or short-term financial needs. And when things are set up to benefit the gig economy, business can be great! However, working for yourself also means taking care of several expenses on your own.
What Expenses Do Independent Drivers Have?
Anyone who has worked as a contractor before may know that gig workers have a lot of costs; truck driving is no different. If you don’t have experience yet as an independent driver, then you may be curious about the various expenses that come with it. Here are some expected and hidden fees and costs you should budget for:
Different Vehicle Expenses
Cars and trucks come with their own sets of expenses, and as an independent driver, you will have to take care of them on your own. Here are some examples:
The Purchase of the Vehicle
If you don’t have your car or truck because you are just getting started, you will need to pay for it. Some people may be able to pay out of pocket, while others will have to look into financing or leasing a vehicle.
Gas or Diesel
Depending on how far you drive, gas or diesel can be one of your most significant expenses as a contractor.
Regular or Unexpected Maintenance or Repairs
The older and more used a car is, the more repairs it will need. Regular maintenance is another essential part of keeping your vehicle in working condition. Sometimes unexpected expenses for repairs can come up for a variety of reasons. For example, if you are in a car accident or a car part has reached its natural life cycle (tires, transmissions, etc.), you will need to pay for those costs.
Regardless of whether or not you work as a contractor for someone, in most states, you need some kind of car insurance coverage to be driving. Some companies may ask that their drivers have more coverage than the minimum required amount. And so, you will need to take care of that cost independently. Car insurance can go up to a few hundred dollars a month.
Highway Toll Expenses
Each state works a little differently with its highway tolls. Essentially you pay to use the road before you get onto it. Tolls don’t cost much on their own, usually a few dollars, but if you often use highways for your job, those tolls can add up. Depending on your driving, you may need a few hundred monthly to cover toll costs.
Personal Products for the Job
Personal product costs usually only apply to truck drivers who live and sleep in their vehicles. Factor in small appliances and furniture, bathroom supplies, hygiene products, and sometimes pet costs depending on your travel companion!
As a truck driver, all your food will be from the road. Depending on your appetite, food costs can range anywhere from $200-$400, so make sure you factor that in!
Standard car insurance will work for your driving and working needs if you are driving a car. However, you must have commercial truck driver’s insurance as a truck driver. Trucker’s insurance is a coverage solution tailored for those working in the profession. It includes liability insurance, medical coverage, physical truck protection, and even cargo reimbursement if something goes wrong. Commercial trucker’s insurance fills in the gaps that car insurance leaves. This makes sense, as most standard drivers do not need such specific insurance. Commercial truck insurance can cost anywhere from $60 to a few hundred dollars a month.
Necessary Tools and Equipment
Although a rideshare or delivery driver may not necessarily need all these things, a truck driver definitely will. Here are some things you should have with you to keep you safe at work in case of an emergency:
- Jumper cables
- A car emergency survival kit
- A first aid kit
- A small tool box
- An air pressure gauge
- Safety glasses
- Sets of wrenches
- A High visibility vest
- Road cones
Cell Phone and Technology Costs
Those who rideshare or work as delivery drivers will likely not be able to work without having a cell phone. Everything from their pick-up directions to their paycheck deposited into their bank account will require a smartphone. Most of us have cell phones anyways, and as an independent driver, it is an important asset. And so, your phone bill should be added to the list of your monthly expenses.
Delivery, truck, and rideshare drivers will have to pay taxes. Drivers can expect to pay self-employment taxes along with state and federal taxes. For self-employment taxes, you will need to keep some money aside from your income, as it is not automatically deducted from your paycheck.
Adding The Right Tax Deductions Can Help
Self-employed workers can get a lot of money back during tax season if they include all the correct deductions. For all of the above expenses and any others you incur during the year, you should be able to deduct them from your taxes. This could mean a significant reduction in the taxes you owe for the year and sometimes even money coming to you.
Cash Advance Options for Drivers You Can Look Into
Now that you have a better understanding of the different expenses that can come up while being an independent driver, you should know about the cash advance options that are out there. Whether you are a driver who doesn’t need the money right away or needs cash quickly, knowing what your options are will help you. Here are some options to consider:
A Credit Card Cash Advance
If you already have a credit card, you can skip the application process and credit check with a credit card cash advance. Many credit cards offer the possibility to take out cash. There is often a cash limit that may be different from your credit limit, and you may only be able to borrow a few hundred dollars. One thing to pay attention to is the interest rate and fees, as the rate for cash will be higher than credit card transactions.
A Cash Advance on Your Paycheck
Depending on the company or companies you work for, you may be able to get a cash advance on your paycheck. Talk to your employer about the different options that they may have. The great thing about this is that you will not have to go through a lengthy process or pay interest. However, the last thing you want to do is not have money when you need it because you took your funds early.
A Pawn Shop Loan
A pawn shop loan lets you provide an item to secure some funds. These loans usually only provide a few hundred dollars, but that can depend on the item. They also come with the risk of losing your asset if you cannot repay the loan.
Payday loans provide fast cash, sometimes on the same business day you apply, for a few hundred dollars. Although payday loan organizations paint these options as convenient and affordable, payday loans should be avoided. They come with extremely high-interest rates and hidden costs that can lead to a cycle of debt. So all those future earnings you may be thinking about could be at risk.
Personal loans are some of the most versatile loan options available. You can have a low credit score and still get approved for a personal loan that can come with competitive interest rates and manageable monthly payments, but that will vary depending on your lender. You can look at online loans for the most flexibility.
Small business loans from the federal government can help Uber drivers, Lyft drivers, delivery drivers, truck drivers, and other contracting drivers. You can use these loans for any business-related expense, and they can come with flexible repayment plans. Whether you are just starting or have been trucking for years, an SBA loan can help.
Loan Options if You Need to Purchase a Car, Truck, or Other Large Expense
Most of the time, if you seek cash advances, you are probably looking to take care of a small expense. However, you may require a larger loan if you need money for a more considerable expense, such as purchasing a car or your truck. If you need a large amount of money for truck driving, ridesharing, or delivery driving, you can look into:
Car loans can help you finance a vehicle that can cost a small or large amount. Approval will be based on your income, credit history, and ability to repay your loan. You may need a cosigner or a co-borrower for approval if you don’t have good credit.
Commercial Truck Loans or Leases
Some lenders only focus on providing truck financing and leases. As a contract truck driver, your most significant expense will be purchasing your vehicle. These companies may be able to help you get financing as a truck driver even with bad credit.
Large Personal Loans
Although personal loans can be small, they can also come in large amounts. With a large personal loan, you can buy your vehicle or use it for any other significant cost you need to take care of.