lease purchase

[davemaes]

I am leaning toward doing a lease purchase (have'nt decided what co. is best yet) but,I've heard a lot of horror storries. Some about not getting enough miles,others getting less miles just before end of lease, and I'll need some advice on these too,but, what about ,how much money should I put away for fuel,TAXES,repairs etc.,etc.,etc. And would a new truck be a better idea than used because of the warranties? I know I'll get a lot of different answers but I'll appreciate any advice I can get. The reason for my decission is I can never seem to get home when I need, or want. And I think I can make good money if I do things the right way. What do you think? Can You help me out?

[yoopr]

Don't and if you are serious about this wait til the HOS garbage has shaken out

[abc123]

operating cost is 0.85cpm, thats from truck payment to your coffee

so deduct this from what they are going to pay you per mile
and you will know how much you will be making per mile

[mike3fan]

operating cost is 0.85cpm, thats from truck payment to your coffee

before paying yourself.

[GMAN]

I am leaning toward doing a lease purchase (have'nt decided what co. is best yet) but,I've heard a lot of horror storries. Some about not getting enough miles,others getting less miles just before end of lease, and I'll need some advice on these too,but, what about ,how much money should I put away for fuel,TAXES,repairs etc.,etc.,etc. And would a new truck be a better idea than used because of the warranties? I know I'll get a lot of different answers but I'll appreciate any advice I can get. The reason for my decission is I can never seem to get home when I need, or want. And I think I can make good money if I do things the right way. What do you think? Can You help me out?

If you like working for $0.18/mile with all of the expenses of running a truck you may never own, a fleece purchase is great. If you want to make an above average income and be an owner operator, save your money for a good down payment or enough to pay cash and be a real owner operator. Your operating costs can easily run over $1/mile with driver pay and lease or truck payment. Fuel alone will run $0.50-0.60/mile at current pump prices. If you lease a truck from a carrier, you can easily pay them upwards of $800 per week with all of the add on costs. The base payment will normally start at around $250-400/week.

As far as buying a new truck. New class 8 trucks are running about $135,000 with the new engines. You typically need 10-30% down. If you can afford the down payment, you can pay cash for a good used truck. And warranties may or may not take care of everything that goes wrong with a new truck. Payments on a new truck can easily run well over $2,000 per month. Collision insurance cost 2-4% of the stated value. One other thing to consider when thinking about a new truck is the lower fuel economy. I know of one guy who bought a new truck and can't get more than 4 1/2 mpg. On top of that he has a truck payment which runs around $2,500/month. A pre-emissions truck should get over 6 mpg. That is a lot of money. It would be good to have about $10,000 set aside for major repairs and expenses. All trucks break down, whether new or used. You either have the funds or resources to make those repairs or you are out of business.

If the reason you want to lease a truck is to get home, I would not count on it. You won't be able to afford to go home if you lease a truck from a carrier or buy a new truck starting out. If you want to be able to go home more often and still earn a good living, either stay a company driver or buy an older used truck in good condition that you can either pay cash for or have a low monthly payment.

[tootie04]

Leasing a truck is NOT the way to get home-time. When we leased our truck at Arrow we could NEVER go home without going in the hole and once in the hole you struggle for weeks to get out. this only happened to us one time and we were out in 1 week BUT we had no other bills to pay and no kids or home to support. I was with Bo on the truck, if not I would have NEVER seen him much.

They make it sound all good but there is so much they dont tell you.

Really the best thing to do is get your OWN truck then lease to a company or get your own authority. :wink:

tootie

[pepe4158]

UM Im kinda new at the Owner Op buiz, but it seems sometimes you guys are a little hard on guys with limitted resources that want to lease with the option to buy from their company.
I was talkiing to a company 1 year driver, with an old hand listening in, and the younger 1 year driiver wanted to go lease/purchase with his company next year...and although we did caution it was a bad way to buy as truck when compared to other avenues, given his resources, it was probably his best way for him to own a truck
WE both cautioned him he would be basicly a slave for his company, and all that could go wrong, but the key to him was, he WOULD own a truck when all was said and done and that was his goal and all that seemed to matter to him....quess its like getting your first lady or wife to some.

[tootie04]

Not hard on them pepe....just giving the cold hard facts, the truth and nothing but the truth.

Nothing with a failure rate of 95% is good.

tootie

[GMAN]

UM Im kinda new at the Owner Op buiz, but it seems sometimes you guys are a little hard on guys with limitted resources that want to lease with the option to buy from their company.
I was talkiing to a company 1 year driver, with an old hand listening in, and the younger 1 year driiver wanted to go lease/purchase with his company next year...and although we did caution it was a bad way to buy as truck when compared to other avenues, given his resources, it was probably his best way for him to own a truck
WE both cautioned him he would be basicly a slave for his company, and all that could go wrong, but the key to him was, he WOULD own a truck when all was said and done and that was his goal and all that seemed to matter to him....quess its like getting your first lady or wife to some.

Pepe, we simply don't want these people to get themselves into more financial difficulty by leasing a truck from a carrier. I have been in business for many years. In fact, most of my life. Most people who get involved in these leases have poor credit, little experience and little or no money. It is a formula for failure. There are things such as illness or an accident which can interrupt your livelihood and ruin your credit, but for the most part poor credit is the result of bad decisions concerning financial matters. Unless you can change the behavior that caused the financial woes, things will never get better. According to an article I read not long ago, most consumers get into trouble because of high credit card debt. That tells me that most of these people don't have the discipline to stop spending until they can pay for what they want. They see something they want they whip out the credit card and charge until the card screams in pain. They don't think about how they will pay for their purchase. They just see something they want and they are going to get it no matter what. By not waiting until they can actually afford something they over obligate themselves and mess up their credit.

I see those who get into these leases as being much the same way. They see a nice shiny truck and think they just have to have it right now. They just know they are going to get rich by leasing a truck from a carrier. They don't want to wait until they can afford it. They just want to be an owner operator. They have little or no experience, little or no cash and poor credit. They don't want to wait until they learn this business. They are unwilling to discipline themselves to save enough for a good down payment. They are not willing to work on rebuilding their credit and change their spending habits. It is a formula for disaster.

Sorry. I didn't mean to get up on my soap box. :?

[jeremyh]

Why does Kevin Rutherfurd say that there are some good lease purchase programs? I listen to this guy on XM and I think he seems pretty knowledgable but I was surprised when he said he endorses some lease purchase programs. To me it seems like a bad deal but I make more being a company driver than an O/O around here, plus I don't have to worry about maintaining a truck.

[GMAN]

Jeremyh, I have no idea of why he thinks there are some good lease purchase programs, unless he is talking about a true lease purchase from a leasing company. I have looked at many lease purchase programs at various carriers. I have yet to see a good one. However, I have seen some leasing companies where you can lease purchase a truck for a little higher rate than you could buy one from a major lender. These are two entirely different animals. With most leasing companies you will still need some money to pay down. Most leases will require the first and last month's lease payment. Some will require the first 2 and last or something similar. There could also be some other fees which the lessee could be responsible. The problem with leasing from a leasing company is that you will usually need to have somewhat decent credit. There are a few who specialize in marginal credit, but you will pay a premium for them to underwrite the business.

[yoopr]

but the key to him was, he WOULD own a truck when all was said and done and that was his goal

That may be his Dream but the odds are against him. Most lease trucks are bought and sold many times.

[sidman82]

Most of the guys that are signed on with my carrier are doing lease puchase deals. I would say 95%. I am not one of them. I have been driving for 20 years and have done many diferrent things over the years.
I finally became an independant contractor ( pretend owner operator) as I felt I knew enough about the industry. I chose to lease on to a company. I purchased a decent used truck knowing full well if it did not work out I could go somewhere else or sell truck, or try my own authority. I have learned a lot in the short amount of time being on my own. I will be well prepared to go out completely on my own with my authority, when the time comes.
The guys that lease from my company have a $410 a week truck payment with .10 cents a mile maintenance charge. They have a payment of about $2000 to $2500 after miles. (Low mile runs.) It is a 5 year lease with a 5% buyout, comes to about $10,000 when the time comes. That's about a $20,000 difference compared to buying and financing at 7.99% That's not to bad considering all maintenance is covered on the lease for 5 years.
But,
Anyone can buy a good used truck and run for at least a $1000 or more less a month. You must save your own maintenance money though, keep that in mind.
I will say that there is one guy I know of that has finished his lease and bought the truck. It is that few because so many guys come on and last about six months. Nobody ever sticks around. They realize that they are making less money then a company driver, and without benifits to boot. This is with a fairly cheap lease payment also. Most lease payments are around $700 a week.
Some may do alright. Not many. I am doing ok, because I hooked up with a low mile, dedicated run, and my expenses are much less then the lease guys.
My carrier will not be signing a new contract with the account I am servicing and I will be getting my own authority next year.
I hope some of this info will shed some light on some answers for some of you.

[davemaes]

Thank you everybody! I think I get the point. As far as having bad credit, my credit is fair. As for the person that leased from Arrow I couldn't get home even after 6 weeks, to go to my best friends funeral! That was the last staw. I quit! But thats another story. I've just been run around so much I thought Being my own boss might be a fix all, but thanks to all of you I'll just keep looking for a company that will treat me right. I've asked some of these questians to drivers at different truck stops over the old c/b but all I heard ( as you can imagine) was how much of an %^**^% company driver I was thinking I could do any better than I am now , or, (only drivers with brains like some of us can make a go of it.)
Thanks again!

[knighton5]

half of these people who write on these boards are low mile runners for companies,!!! If you lease or are a owner operator you will make (earn) more money then a company driver!!! Unless your an inexperienced driver that wastes fuel and not thinking as an owner of a company.... Companies wont lease you a truck to fail, because then they fail and lose money, so dont let these wanna be truckers who failed as a trucker talk you out of owning or leasing on with a company! Why run the same amount of miles for 800 dollars a week when you can run those same miles for 1500 dollars a week with a little bit more responsibility with your own truck!!! Be business smart and be succesful.

[GMAN]

half of these people who write on these boards are low mile runners for companies,!!! If you lease or are a owner operator you will make (earn) more money then a company driver!!! Unless your an inexperienced driver that wastes fuel and not thinking as an owner of a company.... Companies wont lease you a truck to fail, because then they fail and lose money, so dont let these wanna be truckers who failed as a trucker talk you out of owning or leasing on with a company! Why run the same amount of miles for 800 dollars a week when you can run those same miles for 1500 dollars a week with a little bit more responsibility with your own truck!!! Be business smart and be succesful.

I take it you are leasing a truck? If you knew anything about running a truck you would NEVER get into one of these fleece programs. The numbers simply don't add up. I have yet to see one that is in the best interest of the driver. They do make money for the carrier. The carrier has someone to pay for their truck, pay no benefits to the driver, and make a tidy profit. In the end, the carrier still owns the truck. The lease operator is responsible for all maintenance. It is a great deal for the carrier. You won't clear $1,500/week if you lease a truck. Their pay is usually low and costs are high. If you think they are such a good deal, perhaps you could enlighten us. Post your numbers. I would gladly go along with one if I looked at one that was a good deal for the lease operator.

I have owned several trucks. Not leased.....OWNED!! I have also been around this business since the early 70's. I have spoken with 3 people during that time who have successfully completed one of these programs. On the other hand, I have met many successful owner operators who have paid for their trucks.

You see, there are no real shorcuts to becoming an owner operator in this business. If you are serious about being an owner operator, you save your money until you have a good down payment or can pay cash for your truck. Yes, you can save enough to pay cash. I see you are new to this forum. I paid CASH for my first truck and trailer. There are others on this board who have done the same. It takes discipline. You don't have to pay cash, but will need a good down payment. Most who become involved in these programs have poor credit, no money and little experience. Carriers won't publish their statistics on these programs. There is a good reason. They have a very high failure rate. I spoke with an individual with one carrier who does a lot of these programs and was told they lease the same truck 3 times, on average, before anyone completes the lease. To me, that is not a good track record.

[sidman82]

I will add that out of my location about 8 of 15 guys have left and been replaced, in just one season. They are leasing the same trucks to the new guys. The company gets the truck paid for many times over. New drivers are taken on when it is busy. Slow season comes and these drivers are making $300-$700 a week after all their expenses. Then they leave because they are going broke and owe to much in back taxes because they didn't figure that into their expenses. Then comes in the happy new drivers. This is with my carrier. I am posting my experience.
What's your's?

[Sonny Pruitt]

knighton5