Questions about leasing on with company

[sbatson]

Well been thinking about the idea about buying a truck and leasing on with a company but when I buy the truck do they give me like 30 day plates to drive off with truck? When I buy the truck and since I'm leasing on with a company do I need to buy insurance to drive the truck from the lot to company? I plan on just useing the insurance from the company. And will DOT give me crap without any numbers or name on the side of the truck while in transit to the company?

[mike3fan]

yes,yes,probably not.

[SickRick]

Better do a bit of research before you jump in...

If you HAVE A COMPANY that's committed to leasing you on (which is kinda tough for them to do BEFORE you even have a truck), then your tag and insurance requirements are much less.

You still need a DOT number (which gets issued immediately, unlike an MC which can take a couple of weeks).

If you purchase a truck from a LICENSED DEALER - they should give you a 30 day temp. This isn't authority to haul cargo - it's to get the tractor home so you can get it registered in your home state and get all your paperwork in order. If the company you lease to PROVIDES BASE TAGS, then you only need like a Florida tag - but you still need "Bobtail Insurance" - PIP, Non Trucking Liability & Comp (if you're financing, or if you care about getting the truck FIXED if damaged or PAID FOR/REPLACED if stolen).

So yes - you NEED to have insurance to drive the truck PERIOD. The "company" whose operating authority you're leasing to, covers the TRUCKING LIABILITY and CARGO (and will probably try to sell you "Bobtail"), but you need to cover the TRACTOR (and your ass).

IF you're not dragging a box on the way to the company, you probably won't get too much hassle from DOT while in transit - technically, if it's your truck, you're operating it as a POV (like your car) when you're not under a load, or going to/from the terminal. Off duty personal use of your personal truck won't likely cause problems - but I'd LOG IT ANYWAY while en-route...

Rick

[sbatson]

Ok, can a insurance company give me a quote if I'm not sure on the truck yet?And I need to get my DOT number settled before I go and find a truck?

[mike3fan]

Your insurance will run you about 3-5% of the trucks value. You will need to find a truck first to recieve a quote.

You do not need a MC# or a DOT number if you are planning on leasing onto a company.

[sbatson]

Ok so for the most part, buy a truck ( i get drive out plates when I buy) get insurance at time of purchase, and finish up on phone calls to carriers and drive my truck to who I choose and they will supply me with everything else I'm going to need to haul freight. I knew most of this but its some of the little things I was not sure on.

[GMAN]

Ok so for the most part, buy a truck ( i get drive out plates when I buy) get insurance at time of purchase, and finish up on phone calls to carriers and drive my truck to who I choose and they will supply me with everything else I'm going to need to haul freight. I knew most of this but its some of the little things I was not sure on.

Some carriers offer collision and bobtail insurance for owner operators. A dealer should be able to supply you with a temporary tag until you get to where you will lease on. The carrier will usually not order your tag until you sign the lease and they inspect the truck. Some insurance companies will write you a temporary policy until you get leased on.

[mike3fan]

Do you have any experience? You haven't said. Consider geting an O/O job just as hard as it is to get a company driver job, usually the same requirments apply, experience, clean MVR and such.

Have you talked with any prospects? Some companies have tractor requirements such as year, wheelbase and weight restrictions.

[GMAN]

Well been thinking about the idea about buying a truck and leasing on with a company but when I buy the truck do they give me like 30 day plates to drive off with truck? When I buy the truck and since I'm leasing on with a company do I need to buy insurance to drive the truck from the lot to company? I plan on just useing the insurance from the company. And will DOT give me crap without any numbers or name on the side of the truck while in transit to the company?

There is insurance you can buy to get from the dealer home or to the carrier where you will lease on. You will need to check around for rates. If you finance the truck the lender may require you to have proof of collision insurance before leaving the lot. You won't be covered under the carrier's policy until you sign your lease. Most will not sign a lease with an owner operator until they inspect your truck and they check your background. OOIDA offers various types of insurance for members. I am sure they will have something that can get you from the dealer to the carrier with minimal cost. In any case, they are a good resource.

[sbatson]

Well 18 months experience, but I have been around the business awhile I have'nt talked to any companies I have just been trying to get my ducks in a row before I start calling. I'm thinking of trying to stay with a good size well know company( thinking that would be good for freight) and thanks GMAN for the advice and any other advice that you think I should know. Thanks guys

[mike3fan]

Well 18 months experience, but I have been around the business awhile I have'nt talked to any companies I have just been trying to get my ducks in a row before I start calling. I'm thinking of trying to stay with a good size well know company( thinking that would be good for freight) and thanks GMAN for the advice and any other advice that you think I should know. Thanks guys

That would more than likely a bad move. most well know(large) carriers pay less than a $1 a mile and in my opinion that is far below what you need to make to run a profitable company. First thing to remember is try to work less for more pay, look for trucking companies that specialize in irregular freight.

[BanditsCousin]

If I remember correctly, he was running special products for United. Is this correct?

[GMAN]

Well 18 months experience, but I have been around the business awhile I have'nt talked to any companies I have just been trying to get my ducks in a row before I start calling. I'm thinking of trying to stay with a good size well know company( thinking that would be good for freight) and thanks GMAN for the advice and any other advice that you think I should know. Thanks guys

I am not sure that you will be better off with a large carrier than a mid sized one. Everyone is having difficulty finding decent paying freight. I have spoken with owner operators who are leased to some of the larger carriers and they are doing more sitting and hauling cheaper loads than a year ago, just like the rest of us. Many of the larger carriers are hauling brokered freight, just like many of the smaller carriers. I usually suggest that anyone thinking about becoming an owner operator find one that pays percentage and has decent rates. Those that pay mileage have a rate that makes it difficult to make any money with current fuel prices. Most pay around $0.85/mile. This is about the same rate they were paying 30 years ago. At least with a percentage carrier the potential is there to make much more, depending on the rate. You didn't mention whether you plan on buying your own trailer and the type of freight you want to haul.

[BoyNextDoor]

Well been thinking about the idea about buying a truck and leasing on with a company but when I buy the truck do they give me like 30 day plates to drive off with truck? When I buy the truck and since I'm leasing on with a company do I need to buy insurance to drive the truck from the lot to company? I plan on just useing the insurance from the company. And will DOT give me crap without any numbers or name on the side of the truck while in transit to the company?

I'm going throe the same thing... sort of...


Only differences, are that i had a company lined up to drive for before I even went out to get my truck, and also had financing lined up before I went to look for a truck. It ended up being more of a hassle, but it's worth it... payments are way lower than if I would've bought from a dealer, and financed throe them...

If you live in CT (I do) be ready. For the truck to get plates, you have to go throe the IRP unit, which takes 10 business days to process your application. So you'll need a temporary reg so you can start hauling loads. For the DMV you need a DMV inspoection, which they only do in one location (the Union Scales near mass on I-84), b/c they won't accept your federal DOT. for you to take the truck to the scales you need a regular temp registration. Other than that. IRP needs lease agreement, insurance both company, and your bobtail, the companies MCS forms etc... The file I'm prepaiting for them starts to look like a book of sorts... lol

Anyways, you need to do your homework, b/c it's not pleasant to be told 12738 different things at the window at the DMV. and having to go back over and over again...

My 2 cents... Be prepaired, and have lots and lots of extra money laying around in the bank

Good luck my friend, and cheers!

[GMAN]

You won't be able to get a price on collision insurance until you buy a truck, or at least know the exact amount you will be spending. I would check around for an insurance company before buying a truck. You can do that as you look for a truck. Collision rates are based upon the stated value of the truck. If you tell them that the truck is worth $15,000 then that is what they will use in calculating your cost. Rate factors will vary, but most run from about 3-5%. You will not be allowed to take your truck off the lot before having insurance in place. As a side note, just because your stated value is say $15,000 doesn't necessarily mean that they will pay you that much should you total the truck. They will only pay up to that amount. If they determine that the truck is only worth $10,000 at the time of the accident then that is all they pay. Gap insurance is available which will pay the difference between what is owed and what the other policy pays. I would not recommend this insurance unless you purchase a new truck.

I would line up a company where you want to lease on before buying a truck. If you are going to finance it, the lender may want to see a letter of intent or lease from the carrier before final approval of your loan. Most carriers will usually not sign a lease until you actually have a truck and it has been inspected.

Some out of pocket costs you will incur will be your down payment (if you finance your purchase), bobtail insurance (unless you buy it through your carrier), 2290 (Heavy Highway Use Tax), collision insurance and either workers comp or an occupational accident insurance policy. You will need to pay your 2290 before you will be able to purchase your tags or cab card. They pro rate it but the annual cost is $550/year. Your carrier will need a copy of your title or title application and a copy of your 2290 receipt marked paid. You can get your own base plates and permits through your home state or get them through your carrier if they have a program. Most will have a base plate program. It is usually less expensive for a single truck operation to buy a occupational accident policy. They usually run about $140-150/month. OOIDA has a policy and some carriers also offer them. Some carriers require the new owner operator to pay for their initial truck inspection. If you buy from a dealer they may do a DOT inspection for you at no charge. Some carriers are now requiring that inspections be performed at a truck dealer rather than a truck stop. Others will allow you to get them done at any truck stop or DOT certified shop. You may check with your carrier before spending any money. Inspections usually run about $60-75 for a tractor.

It usually takes about 1-2 weeks to lease on to a carrier. Landstar can take more than a month. If you have not had a lot of driving jobs it will speed the process. Carriers are required to check your background for at least the past 3 years. Some may go further back if something comes up in the initial process. As long as you have a clean MVR, work history and criminal background, there should not be a problem. The fewer jobs you have had the quicker the process.

One other thing I would advise is that you keep your payment low. Those who are having the most difficulty right now are the ones with big equipment payments. With this economy I would not want a payment more than about $500/month. You can get a good truck for that amount of payment and should something happen you could still make your payments as a company driver. I saw some Schneider trucks advertised in The Truck Paper today for as low as $12,000. With a cheap payment you can always pay your truck off earlier. I always try to look at contingencies. By planning for the worst you are prepared for anything that happens.

[sbatson]

I did run for United but I took a local driving job and that turned out to be a bad idea and when I left there United had already filled my truck for that division, so my wife wanted to go home at that point so we moved back to Florida.Now my wife knows we had a better chance in Texas so we will be going back there in June of 09.I dont know it might be a better idea to save some more money and just run my own truck instead of leasing on with a company.

[GMAN]

You will have more options and probably pay less for motor carrier insurance if you have at least 2 years experience. When you run your authority you do have more flexibility. It costs a little more when you run your authority but you can often make more on your freight than if you lease. Should you decide to run your authority you will need to buy a trailer. Power only loads can limit your income when you run your authority. There are carriers who are agent based and pay a percentage of the line haul. Some are close to what it is like running your own authority. Depending on the type of freight you want to haul we could make a few suggestions. By the way, freight into and out of Texas is not doing very well these days, but it might be easier to find a carrier if you base out of there. Texas freight has been soft for the last couple of years. Whether you lease to a carrier or run your authority you will find it difficult to get freight out of Florida. Financially, it will be easier for you to lease to a carrier rather than getting your authority. When you run your authority there are many more expenses than when you lease. For instance, you will need to pay for your base plates and permits up front as a carrier. When you lease they will often finance the cost and take a flat rate out of your weekly settlement. You will need to furnish your own liability and cargo insurance when you run your authority. Leasing on will eliminate that cost, although some carriers are now charging a per load fee to cover cargo insurance.

[Copperhead]

I am not sure that you will be better off with a large carrier than a mid sized one. Everyone is having difficulty finding decent paying freight. I have spoken with owner operators who are leased to some of the larger carriers and they are doing more sitting and hauling cheaper loads than a year ago, just like the rest of us. Many of the larger carriers are hauling brokered freight, just like many of the smaller carriers. I usually suggest that anyone thinking about becoming an owner operator find one that pays percentage and has decent rates. Those that pay mileage have a rate that makes it difficult to make any money with current fuel prices. Most pay around $0.85/mile. This is about the same rate they were paying 30 years ago. At least with a percentage carrier the potential is there to make much more, depending on the rate. You didn't mention whether you plan on buying your own trailer and the type of freight you want to haul.

Agreed. I would add to Gman's comments that you should also research out the carrier as much as they research you. I am with a smaller carrier (300 trucks) that has a real good customer base. Some of that has not been affected as severely with the recession. If a carrier is tied into automotive, may not be a good choice. 3PL freight is a reality no matter the carrier. How is there safety rating with DOT? That will be a big issue in the near future and it can affect which companies they can land accounts with. There are a lot of good companies that will pay a little extra (not a large amount) on rates to insure it is on a quality carrier that will give them the best service. Those accounts are a little rarer these days, but it still happens and will big a bigger factor in the future as the economy picks up. Regarding a mileage rate, Gman is close in what the per mile rate may be ( I would guess closer to $.90 on average), but you also have to look at what fuel surcharge they are also paying and how they are calculating it. That could easily bring the total rate closer to $1.20 average. Also, what are they paying so that you don't have to? What kind of discounts on fuel, parts, tires can you get out of them as opposed to buying on your own? When you add up the incidentals, even though getting a $.90 / mile rate, you might be getting the equivalent of $1.50 a mile. Look at the big picture and ask a lot of questions. Medical insurance? Don't necessarily go with something a carrier might refer you to. I got a Blue Cross/Blue Shield HSA qualified plan for me and the wife, with a $5 million lifetime payout, for around $370 a month (I am 53, smoker.. wife has preexisting thyroid condition). A young person, say 30ish, could get the same deal for under $100 a month. Real insurance with a total out of pocket per year of $5K, and no copay... 100% insurance after the $5K out of pocket. Even if a procedure would cost $100K, I would only be out $5K for the whole year. Along with that, I put in money towards that $5K annual out of pocket each month into the Health Savings Account that the insurance is tied to. Result... 100% deductability of ALL medical expenses, including the out of pocket. And the money I don't use in the Health Savings Account just rolls over and earns interest, and, after age 65, can be withdrawn for any use I want just like a IRA or 401K plan. Of course, this may all end if Obama has his way.

How big the carrier is doesn't mean anything. I have found that I have done better with smaller sized carriers of 200-500 trucks. Maybe just dumb luck. I never made a move without spending a lot of time researching a carrier and making a lot of phone calls checking on each one I have considered. Guess that is why I have spent an average of 8+ years with each carrier. Doesn't mean I have always gotten the absolute best deal each time, but I have done well. At least, in the big picture, I have been treated far better at smaller carriers than most are treated at the big ones. If you put a little effort into checking out a potential carrier, you will reduce your risk of making a bad choice.