Variable Mileage Payment

[Mr C]

General Question?

CR England has on their Web site ,for leasae purchase, an item that is called "Variable Mileage Payment" Computed at $0.14 per mile with $0.01 going into a Interest bearing truck investment fund, to be used as a down payment on a future truck purchase or for upgrades on future truck lease. What & where is the other $0.13 cents going or used for? For the annual compusation for a Solo driver that can be a healthy hunk of change.

What exactly is Variable Mileage Payment? I think I know but want to make sure I am thinking right. Possibly a driver who has leased from CR England can explain.
I would like a good explanation not some wild answers to down a company.

Thanks in Advance

MR C

[Useless]

General Question?

What exactly is Variable Mileage Payment? I think I know but want to make sure I am thinking right. Possibly a driver who has leased from CR England can explain.
I would like a good explanation not some wild answers to down a company.

Thanks in Advance

MR C

MR. C;

I know that CR England pays a little more for very short runs than they do longer ones, but in the end, CR England will screw you to the bone.

No "wild answer" here, but if you are even considering CR England, then turn around and run like hell. CR England is a beggar's crossroad; they lead to trouble in every direction.

[AC120]

IT'S A LEASE NOT A LEASE/PURCHASE!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! !!

The 14 cents per mile is a charge to the driver. It's not compensation. It's a payment you make to CRE on top of the weekly lease payment. It includes unpaid miles you run (remember, they pay on HHG but charge on the hub), and you pay for all costs of running those unpaid miles).

What happens to that .01 per mile if you don't re-lease or "upgrade?" And what the hell is a "lease upgrade," anyway? You need to ask CRE. If you do, please post their answer here.

And that $41,392 annual solo driver pay? That's before income taxes and health insurance. If you want to work 52 weeks a year (2,900 miles a week X 52 weeks = 150,800 miles) for a lot less than $30,000 a year after taxes and other expenses, jump right in.

"What and where is the other 13 cents going or used for"? It goes to CRE. I don't know what they use it for, but it won't be for you. As to what they mean by "Variable Mileage Payment," you'll have to ask them. I suggest you record the answer and let us know.

Again, it's a lease. A lease. A lease. A lease.

There. I stayed away from "downing" those bottom feeders.

[Useless]

As for finding a former CR England driver to respond, good luck with that one.

Former CR England Fleece Operators are either too embarrassed to post here, or else they are too broke to be able to afford internet service.

Too bad "Spencerain" isn't around anymore!! :P

[AC120]

I just realized that my numbers might seem to come out of thin air. Go to

http://www.crengland.com/truckingjob...ractor_leasing

Click on "potential income" and you'll see what Mr C and I are talking about.

[GMAN]

General Question?

CR England has on their Web site ,for leasae purchase, an item that is called "Variable Mileage Payment" Computed at $0.14 per mile with $0.01 going into a Interest bearing truck investment fund, to be used as a down payment on a future truck purchase or for upgrades on future truck lease. What & where is the other $0.13 cents going or used for? For the annual compusation for a Solo driver that can be a healthy hunk of change.

What exactly is Variable Mileage Payment? I think I know but want to make sure I am thinking right. Possibly a driver who has leased from CR England can explain.
I would like a good explanation not some wild answers to down a company.

Thanks in Advance

MR C

In looking at the numbers, you would make as much working for a carrier as a company driver as you would leasing one of their trucks. In fact, you could probably make more and not have all the headaches that go along with renting something you will never own.

We have discussed these programs a lot on this forum. I have looked at these programs for years. I have yet to see one that works in the best interest of the driver. Most drivers want to become an owner operator. If that is what you want to do, then save your money for a good down payment and running money. If your credit needs work, then get your credit problems straightened out while you save money and get more driving experience. The best way to buy a truck is to pay cash. Most will not want to wait that long. Your alternative is to buy a truck using a lender. Renting or leasing a truck from ANY carrier is not a good idea. You will pay much less for the truck by getting it on your own. You will also be able to leave your carrier at any time without leaving your truck. You can buy a good truck for less than $20-25M. Right now you could probably find a good truck for less than $15,000. I am not talking about a junky truck, but something that will make you money without breaking the bank. You don't have to get a new truck to do well. The key is keeping your costs down. We are in a troubled economy. During difficult economic times it is much better to have low or no debt.

[Jumbo]

How in the hell can these people sleep at night? Has there ever been anyone on here that ever did a l/p and suceeded? What about Samuel909 or whatever his name was that was on with Swift. Didn't he l/p his truck and I haven't seen a post from him in quite awhile.

[GMAN]

I know what you mean, Jumbo. By the way, Mr C. With all the extra costs of doing these programs it isn't uncommon to pay $800/week or more to the carrier to rent their truck. The payment is only part of the cost. The money you put into a maintenance account may or may not be returned to you. Some people lose their entire maintenance account if they don't complete their lease. You need to read the fine print very carefully. Don't rely on the figures the company give you. If it were me and I was thinking about getting into one of these programs, I would want to talk to people who have completed their program. I would not want to rent a truck that I would never own. You can rent a truck from Penske for about the same money as you will pay CR England or most any of the others who do these programs. I rented a Penske truck for one of my drivers when the truck broke down. It wound up costing me about $800 for the week. You can buy a truck and have a monthly payment less than $800/month. Most lenders want you to have a year or two driving experience and decent credit. You will need a credit score of at least 650 for some lenders. I believe OOIDA has sources who will finance a truck with a minimum score of 625. It is in your best interest to get a year or two of solid experience before going out and buying a truck. Things will be much easier when you know more about what you are doing.

[Bumper]

I met a really happy CR England L/O last month.

He had completed his lease was turning in his truck on August 1st and couldnt wait to get out of the parking lot after he did!

[Useless]

G-Man;

I agree with your points about saving some dinero and paying cash for a truck, or being able to put down a sixeable doen payment on a good used one, and keeping the monthly payments low.

There is one other alternative to consider, and that is to start off the way "Bandit's Cousin" did; rent the tractor from Ryder/Penske. Does it cost more?? Yes!!....Or, in the end, it may not!!.... but it enables a driver who has aspirations of becoming an O/O a number of advantages.

1.) O.P.M.: Other People's Money
A driver who has aspirations of becoming an O/O can operate the unit as an O/O would, become more familiar with some of the challenges that an O/O faces, and gain a clearer perspective on whether driving as an O/O is right for him/her. what's more, this learning curve can be traversed without an outlay of capital or monthly payment obligations.

2.) O.P.H.: Other People's Headaches
Whereas an O/O driving a good used truck must set aside a maintenance reserve, and deal with the headaches of repairs, and the cost of downtime, by renting a truck, he/she will not be burdened with unexpected repairs. Truck needs work?? Turn it in, and check out another one. No headaches over repair costs, or revenue lost while a truck sits in a shop, and minimal downtime.

While renting is obviously more costly in terms of cash outlay, a driver can better assess whether the dream of being an O/O is one that he/she really wants to persue, or if the realities involved with ownership are more than he/she ants to contend with on a long term basis.

Can this be done successfully??

Well, "Bandit's Cousin" did it, and now, he's got a truck of his own that many drivers can only wish for.

What if the responsibilities of working as an O/O are too much for a driver to contend with??

Well, he/she has no monthly payment to worry about, no "upside down" note or balance to contend with, and no having to sell off a depreciating asset!!

As sales are concerned, truck sales (both new and used) are hurting right now.... BIG TIME!! So, as you suggest, there are some real bargains out there for those who are creditworthy, and prepaired to make a good downpayment.

The mortgage crisis is hitting hard, and we are by no means out of the woods yet; this is affecting alll of the credit markets, as there simply is not as much money available to lend as there has been in years past, so those who are trying to obtain financing in the subprime markets are going to be in a world of hurt, or else paying ussery rates for what financing they can obtain.

[GMAN]

You make some interesting points, Useless. The reason many get into these fleece programs is lack of money and a poor credit rating. You cannot rent a truck from Penske without a good credit rating. Before they would rent me a truck they checked my credit. They will check your credit whether they bill you or you pay cash. It would be be a different way to get started. BC made it work. Others might be able to do the same. The primary advantage I see is that there would not be a long term obligation. Penske will give a better rate when you rent longer term. I am sure Ryder has a similar program. One thing about it, these lease people would not be any worse off renting a truck from an outside source like Penske than they would from the carrier. Penske charges a flat daily, weekly or monthly rate plus mileage. That sounds like the same thing CR England is doing with this program.

[Useless]

You make some interesting points, Useless. The reason many get into these fleece programs is lack of money and a poor credit rating. You cannot rent a truck from Penske without a good credit rating. Before they would rent me a truck they checked my credit. They will check your credit whether they bill you or you pay cash. It would be be a different way to get started. BC made it work. Others might be able to do the same. The primary advantage I see is that there would not be a long term obligation. Penske will give a better rate when you rent longer term. I am sure Ryder has a similar program. One thing about it, these lease people would not be any worse off renting a truck from an outside source like Penske than they would from the carrier. Penske charges a flat daily, weekly or monthly rate plus mileage. That sounds like the same thing CR England is doing with this program.

True, G-Man,

But the CRE Fleece Operator is also having to contend with repairs..... not so with a Penske on a weekly basis. Mechanical problems?? Turn it back in, check out a new one, and keep rollin'.

You do make a very important point that can not be emphasised strongly enough.

You can not build a solid business upon a weak foundation.... there is no "Easy Credit", there are no simple solutiions, and being undercapitolized is trouble looking for a collission point.

Frankly, in today's market, I can't imagine wanting to embark on an O/O venture; but then again, I'll admit that I'm not exactly "O/O Material", even in the most ideal of circumstances. Another point that I think needs to be made is that "Bandit's Cousin" (BC) is not your "average bear".... Jeff is a very intelligent person, and working as a bedbugger, he picked up a lot of "street smarts" in a very short period of time.

[GMAN]

BanditsCousin also had the benefit of his Dad's experience in the business from which to draw. It is a little different than someone starting out with no personal resources, no money and poor credit. If someone were to go the Penske route, I would suggest they not do it for more than a few months. Personally, I like the idea of making a commitment and going for it. :wink: If you buy a truck with low payments, you can double up and pay the lender the same money you would pay Penske and have a paid for truck in 6 months to a year.

[Malaki86]

Ok - we know how everyone feels about a lease deal where the driver never takes ownership of the equipment. What about a true lease/purchase with either a balloon payment or standard payoff and the driver takes ownership.

My company is small (65 company trucks) and will sell equipment to drivers for cheap (average about $24k for a 6-8 year old truck).

Just something I'm considering.

[AC120]

"What about a true lease/purchase with either a balloon payment or standard payoff and the driver takes ownership."

I guess it depends on--among other things--how much the balloon is and if it's affordable (can you do it without financing it?).

Other things: what will the truck need when you take possession--tires (at about $400 each--that's four grand if you need all ten), brakes, an in-frame, transmission or differential work or replacement, upholstery, etc?
Whatever the truck needs (if anything) will have to be paid for. If you can do these things without going into debt, I'll bet you could make it work.

[Mr C]

I want to thank you all for your comments & inputs. What I was thinking you all have confirmed.
You can't blame one for looking into a lease, but the way to make sure is to ask the experts for thier inputs. I did & you all did.
Good forum to help get to the bottom of a subject.
Thanks Again

MR C

[AC120]

The other guys are experts -- I'm not. But thanks just the same.

It's better to ask questions before signing on that dotted line--saves a whole lot of trouble down the line. Thanks for asking. Safe trip to ya.

[homer]

i remember that spencarian and his minus $1000 paychecks
i remember when i started there was new drivers evry where saying how cool it would be to be an owner operator. no clue and im glad i never got on that treadmill.
im off 1 or 2 days a week and 3 weeks paid vacation so go knock yourself out. and that million mile truck aint worth squat so you better trade it in.
i never get a receipt at cfn so i dont know what that fuel costs

[Rocketdog]

LP deals are poison..everyone agrees that places like CRE, Central Refrigerated, Swift...etc...all ARE going to screw the driver at SOME point.

What these companies prey on are drivers who are uneducated about being an O/O and operating a business.

There are SOME....very small percentage....companies where several people have bought their trucks at the end of their LP deals and either have no more truck payments and continue on, or, buy another truck like a new one. These companies are generally smaller and interested in keeping their drivers. All of these companies REQUIRE 2 years experience
to even apply.

CRE, SWIFT, CENTRAL are not interested in keeping drivers long term because they have to pay them more $$ to get the same paying load to the dock which equals less money for the carrier. These carriers are not interested in the drivers' happiness, just their own profits.
Places like that have drivers where the average length of experience is under 2 years.

The way Central, CRE, Swift are getting new drivers: They will fleece lease you a BRAND NEW Peterbilt after being a company driver for a whooping 3 MONTHS ! !---all this is ---is a recipie for disaster for the poor souls who get suckered in to signing these LP agreements.

Stay away from large carrier LP deals. You will not be able to buy the truck at the end because they'll choke you at the end of the lease deal...and if you do complete the deal..you will be so behind with your bills that your credit will be too low to find financing.....they get the truck back again......you lose everytime, they win.

[Bumper]

NEVER NEVER NEVER EVER EVER EVER

Lease a truck from the same company that dispatches you......