MAY AND FRIENDS!

[Iceman]

O.K., here is the beginning of the new thread. Everyone jump in and Goin Fer It's Wife can continue their journal. Hope this works! Iceman is looking at a May truck next week to lease-purchase. Their proforma looks pretty good to me. He wants the Pete 379 and they have one. More next week after I finalize the deal. Fun!

Iceman's Wife Suze

[Retirednavysnipe]

Just a bit of advice if you want it. If your Hubby is going to lease purchase he might consider another truck other than the Pete 379. He is going to be paying for fuel and those 379's suck it up like no ones business. If I were to start a lease purchase I would consider either a newer century or a Pete 387. Better fuel mileage equates to more money at home.

Just my 2 cents worth. Take it or Leave it.

Good Luck

[marcel27208]

Im an owner operator.....those volvos are pretty good on fuel...but if they have freightliner centurys i'd get one of those.....379's eat up fuel

[BigAtrukn]

Yea i agree, while I was up in Brooks talking to a couple Lease drivers they were sayin it takes longer to pay them off so you might as well buy a new one plus they eat up fuel like no other. They have the volvo 770's and 780's and they pay off faster with better fuel mileage. Ive only seen 2 Freighliners for sale while i was there. good luck

[mike3fan]

I get 6.3mpg with mine,it only really eats it up if I want it to eat it up.

[hamboner]

Ohh no...."Lease Puchase"??? Fuel is not the only thing you are going to worry about! I have read many posts on this board the short time I have been here, and most everything I have read pertaining to a lease purchase deal says RUN LIKE HELL. I dont know....maybe I missed a few posts where someone actually survived one of these deals??? :idea:

[Rawlco]

Lease Purchase. . . Hmmm.

Lease payments are as low as $400. We have an excellent maintenance program and most trucks come with a warranty.

.88 Loaded or Empty Miles

So, Fuel at $0.50 per mile because fuel costs $3.00 per gallon and you may get 6 miles per gallon. Lead foot wind catcher drivers may only get 5.5 miles per gallon. Now consider that you may only be paid on short miles, or you may want to go out of route once in a while for weather or better roads. Figure that fuel may cost you $0.60 or more per paid mile.

Truck payment at $400 per week is one of the better deals, some companies charge $625 or more. Add $100 for insurance company charges, like qualcomm. $500 over 2500 miles is $0.20 per mile.

Maintenance will cost you minimum of $0.05 per mile for basic tires and oil changes. I like to see you put away $0.10 per mile in addition into a maintenance rainy day fund to be used for larger repairs and catastrophic failures. If you have any left over at the end of the lease you will have a nice down payment for your next truck.

Left for driver wage at this point is $0.03 per mile. Out of that comes any unreimbursed tolls or lumpers, trailer rental/useage, and so on. Better hope that the "aggresive fuel surcharge" is pretty high.

Ooh, I missed the workers comp requirement, better add another $100 to $150 per week for that. :shock:

[Iceman]

Interesting feedback guys! Current Qual mpg indicate he is getting 8mpg on the 379. May doesn't have any new 387's for lease that wouldn't cost an arm and leg, but they do have Volvo's. Iceman drove a Volvo with KKW and it was nice, but lately have been hearing that they have more "fix-it" problems. He keeps his speed at 55-60 so maybe that's why he is getting better mileage. What say you?

Iceman's Wife Suze

[hamboner]

8mpg??? Does he run empty all the time? Never heard of a 379 get anywhere near that fuel mileage. Hardly ever here of any truck get close to that mileage for that matter. You should do a search on some of these lease purchase deals and read what some of these people have experienced. What are u gonna do when dispatch or fleet manager pisses you off? What are u gonna do when u have a MAJOR breakdown? Remember...lease purchases are CONTRACTS there ain't no quiting or switching carriers until that lease is up! Those are just some of the many factors, besides the fact that Leasees often get the unwanted freight, that I would not even attempt to sign on a dotted line for a lease. I believe you are right.......its gonna be FUN!

Lease Purchase from a Carrier = Bankruptcy to Lessee (o/o)

[Iceman]

We were o/o previously, so I know the drill. Ordinarily doing a lease-purchase can be scary, but I downloaded OOIDA's lease-purchase proforma and plugged in the numbers. After ALL the costs, even taxes and child support(which is a killer), we'd have $56000 net. I compared their proforma with England and Werner's and May's is right up there. The lease payment is lower in fact. They pay currently 1.23 cpm including current surcharge, which is about average, and I got all of their insurance costs, etc. Lease payment for a 2004 is $450/wk. For the next 4 years this sounds as good as we can hope for since we don't have another alternative other than remaining a company driver. As far as the mpg is concerned, Qual has the program to track that, and I was actually being conservative saying 8mpg because it hikes up to 8.5 on many days. Yes, he does keep it at 55. Later---

Iceman's Wife Suze

[Longsnowsm]

I think the driver needs to do those fuel calcuations manually... Something is seriously wrong. And it sounds like you might be using those numbers in your calculations for your lease purchase... Not a good idea. Use something like 5.5 or optimistically 6 mpg in your calculations and see what it looks like. Then if what you have been seeing in the 8 to 8.5 is actually right then super, but I wouldn't base your estimates on those optimistic numbers. Secondly summer fuel mixtures perform better than winter fuel. I routinely see a 10% or greater fall off in fuel economy with winter fuel mixes. You will want to be conservative with your calculations so that you don't have a big downside surprise.

Also it sounds like your missing some numbers for the lease purchase if your coming up with that sort of net. As I mentioned above look at the numbers your plugging in for fuel. I have run the numbers with all the big carriers leases, and augmented with info from O/O's here on this site for maintenance and the incidentals and it turns out to be about .10-18 cpm I would get to keep as the driver once I put in all the numbers, factored in bounce(deadhead or bobtail), items that aren't covered by warranties etc. So I would ask some questions, because the calculations your coming up with don't sound right. No reason to put yourself at risk because the numbers you used were too optimistic or you overlooked expenses. BOL

Longsnowsm

[hamboner]

If u used to be an O/O, why are u going lease/purchase? Sounds like you are looking to make these #'s work for you. Ain't no way in hell that truck is getting 8.5 mpg! Face the facts 8.5 mpg is way out of line on a 379. I'm sorry.... I hope u guys do well, but a lot of these companies like to show you the #'s you want to see. Hardly ever though do they come out on your end like they do on theirs. If it was so lucrative to lease the truck and make money why wouldnt they do it? Thats right......they can make more money off you footing the bills than themselves. All of the lease purchases are based on you running a certain amount of miles per week. How do u know you will get those miles? If not, you only have to wait 4 years to get out of the deal and hope to do better! Like I said before....I hope you do well, but I sure would hate to know I have put my income in someones hands for 4 years! Keep us updated and show us the #'s. Hell...if you do alright this will be a good post for someone wanting to compare #'s

[Longsnowsm]

It is just too easy to overlook the details on these leases. Too many drivers don't take to time to think through the details... For example has the driver figured out that they will be responsible for all their own expenses? Medicare/Medicaid, Social Security, Health insurance, retirement plan... Oh, if that truck pukes a motor tomorrow who pays? You say the warranty? Nice catch, but the truck is down for 3 weeks for the repairs who pays the truck payment and all of those bills for that 3 weeks while your sitting? Trucking is seasonal with highs and lows... 3000-3500 miles a week suddenly turns into 2000-2500 miles during the slow periods... Gee, the driver seemed to have done all their calculations based on some rosey numbers they were given from the peaks of the freight season... I wonder who picks up those differences in income... Remember that truck payment doesn't go down or go away just because there isn't any freight, or you truck is broken down for repairs... If your not being honest with yourself about the fuel, what else are you not being honest with yourself about?

I know, we all just make this stuff up just to be negative right? Well chew on this one. Go into the OO forum and ask, What is the minimum you will haul a load for? I bet 99.99% of them will tell you that they wouldn't start the truck for $1.20 a mile without a FSC let alone for say .90 cpm and a $1.20 with a FSC. So why is it such a great deal for someone in a lease to basically have all the same expenses as a OO, but haul for a fraction of the money that a true OO will haul for? Something isn't right. Several of these seasoned OO's own their trucks outright and don't have those massive truck payments and they wouldn't haul a load for the rates you willing to take!

These rookie lease operators are in way over thier heads when they are so overwhelmed with the numbers that they don't do thier own due diligence and figure out the details that they are not being given by the leasing carriers. You've heard of the term "Buyer Beware", the same applies to the leaser "Leaser Beware". I wish you the best Iceman, but your heading for a disaster and are on borrowed time right out of the gate in these leases. BOL

Longsnowsm

[Iceman]

O.K. I dropped miles down to 2500/wk and dropped mpg down to 7.0. Even our Freightliner got that, and the Volvo he drove was at 7.5. I know you guys drive faster, but slower is the only thing that saves us. May's Qual uses every possible tool for shifting and maximizing fuel. They are one tough company in that department. He's never in 25+ years had a speeding ticket! That's just his way. I used OOIDA's lease purchase proforma and even the guy at May asked where we got the spreadsheet because it is so concise. Anyway, even at that the bottom line is net 40K. I spent 25 years doing real estate loans and crunching numbers for buyers and I don't know how to factor in any more "stuff" than I have. I used $3/gal fuel, plus maintenance reserve, Qual, Licenses, Permits, Physical Damage, Non-trucking, Cargo, Workmens' Comp, Road/Fuel Tax, Truck Washing, Tickets, Lease Payment, Medical, IRS taxes, you name it even his child support payments. Deadhead and bobtail pay as if loaded. Did NOT factor in load/unload pay or detention pay to keep it as conservative as I can. Other than miles and mpg I can't see anything that can change. In addition I will put aside $1000/mo for "whatever" out of my own income. Not an easy hill to climb but he sure as heck won't make it as a company driver. We had to sell our auto-transport rig because Iceman got throat cancer, even though he isn't a smoker. For awhile that sucked up everything we had and now we have to rebuild credit and just about everything else. It can happen at any age believe me. I hope this works. My only true concern is that they give him the loads. May doesn't want to lose any O/O contracts so they really have to keep him moving. We are going into the slow months until, what, probably March, and I have to think about that as well. If I forgot anything let me know! Oh, almost left this out. We put 15K down on a 2002 Freightliner auto-transport deal, good credit with Daimler-Chrysler, and the payment was $2400/mo for 4 yrs. This purchase had nothing down and it's 1800/mo for 4 yrs. At the end of both we own. We have never wanted to run under our own authority. Hauling cars we were paid 80% of the load and had to run like a scalded ape. Mileage is much better than by the load for us. There may be lots of O/O's who won't run for $1.24/mile but I compared many companies for leasing on and this is right in line with what others are paying, more in some cases. It wouldn't change even if we came on with our own tractor. I'm not trying to "Make" the numbers work because that would just be pie in the sky. May actually doesn't have this set up as a lease. It is a true purchase for a set period of time, just as the finance was with DCS. Lease refers to leasing on to them. Hope that is clarified. Also, yesterday Iceman and the O/O manager reviewed his stats as far as miles and mpg. In the entire company his mpg is higher than anyone else, simply due to his habits. He's older and not a hot shot driver, doesn't idle much, doesn't haul heavy, and he watches his shifting. Maybe old guys do O.K. in the long run. His miles are right in the niche that they require. This is why I am using a lower mpg figure just to be very conservative, and also May says that O/O's have to run 11,000 miles per month minimum in order to make it, which is why they monitor them so closely. This is exhausting. Will take until end of October to make a decision. Shorter post next time I guarantee you!!

See Ya!
Iceman's Wife Suze

[hamboner]

All I can say is that I wish you luck. I hope you will post how well you are doing with the real #'s each week. This is going to be interesting for everyone to see. Looks like you have everything figured out!

Lease purchases only benefit one party..... The Carrier.

[OverTheRoad]

Any news on your husband?

[nobotox]

Fresh outa cdl school. Scheduled for orientation next Monday(10-9) in Phoenix. Anyone else? Do you get assigned a truck in Phoenix or do they send you to Salem?

[OverTheRoad]

Your trainer will most likely come to you. Sometimes they will have you ride with another driver to get to your trainer but its rare. MTC can get into Phoenix rather easily. They run a ton of freight around the CA - AZ area. Plan on going out for 30 days straight.
This is just what I have learned from being around May for the last 3 weeks. Good luck, keep in touch.