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Whammo · Joined: 02 Apr 2008 Posts: 140

Could a few of you fellas elaborate on the lease scams and why they are considered scams?

Is it simply the lack of freight? Or is now just a bad time to do it?

Please explain in terms a newbie would understand.

all18wheels · Joined: 10 Apr 2007 Posts: 213 Location: sacramento

lease=this place sucks, freight is slow, i quit!! aawwww you cant you leased the truck and payments are due.

company driver=this place sucks, freight is slow, i quit!! SEEYA

Double R · Joined: 11 Sep 2005 Posts: 967 Location: Pittsburgh, PA

Whammo wrote: Could a few of you fellas elaborate on the lease scams and why they are considered scams?

Is it simply the lack of freight? Or is now just a bad time to do it?

Please explain in terms a newbie would understand.
Rent-A-Truck

carlos64030 · Joined: 06 Jun 2007 Posts: 102 Location: MO.

all18wheels wrote: lease=this place sucks, freight is slow, i quit!! aawwww you cant you leased the truck and payments are due.

company driver=this place sucks, freight is slow, i quit!! SEEYA

I laughed.

Uturn2001 · Posted: Fri May 09, 2008 8:34 pm Post subject:

Here are the problems with most lease purchase deals:

1. Many are actually just leases. You do not own the truck after the last payment is due.

2. You often end up paying 50-100% more for the truck than you could have bought it for through regular financing methods, even with bad credit.

3. If you do not make enough to live on you usually can not take the truck with you to a better company.

4. If you terminate the lease early you are often hit with all types of extra fees that at the least will eat up your maintenance fund and last pay settlement.

5. Many times you have to have your truck serviced at the company's specified location(s).

6. The company who you are buying the truck from is the same company who really controls your paycheck. They can all too easily have you only run enough miles to pay for the truck, fuel, insurance etc and nothing more, or even have you run fewer miles than that to quickly force you to turn the truck in so they can lease it to someone else. In a company lease or lease purchase the truck ALWAYS gets paid first.

7. With many L./P's all you really end up being is a company driver who is paying the company for the privileged of driving their truck. With many of the rules they place into the L/P agreement you just end up with all of the headaches of being an O/O with few or none of the potential rewards.

Whammo · Joined: 02 Apr 2008 Posts: 140

Uturn2001 wrote: Here are the problems with most lease purchase deals:

1. Many are actually just leases. You do not own the truck after the last payment is due.

2. You often end up paying 50-100% more for the truck than you could have bought it for through regular financing methods, even with bad credit.

3. If you do not make enough to live on you usually can not take the truck with you to a better company.

4. If you terminate the lease early you are often hit with all types of extra fees that at the least will eat up your maintenance fund and last pay settlement.

5. Many times you have to have your truck serviced at the company's specified location(s).

6. The company who you are buying the truck from is the same company who really controls your paycheck. They can all too easily have you only run enough miles to pay for the truck, fuel, insurance etc and nothing more, or even have you run fewer miles than that to quickly force you to turn the truck in so they can lease it to someone else. In a company lease or lease purchase the truck ALWAYS gets paid first.

7. With many L./P's all you really end up being is a company driver who is paying the company for the privileged of driving their truck. With many of the rules they place into the L/P agreement you just end up with all of the headaches of being an O/O with few or none of the potential rewards.

I see. That makes a lot of sense. Thanks for taking the time to answer in so much detail :)

How about o/o in general? Would I be correct in surmising that now is a bad time to take out a loan on a truck?

BigDiesel · Posted: Fri May 09, 2008 10:33 pm Post subject:

Whammo wrote:

I see. That makes a lot of sense. Thanks for taking the time to answer in so much detail :)

How about o/o in general? Would I be correct in surmising that now is a bad time to take out a loan on a truck?

Take a look at CR England's lease purchase program, with your abilities you should prosper.... But you should learn how to use a logbook first.... :lol:

Jimbpard · Joined: 09 Aug 2005 Posts: 562 Location: Irwin. PA

Lease purchase = Company driver with all the costs of an Owner Operator.

Good Deal huh!!

Jimbpard · Joined: 09 Aug 2005 Posts: 562 Location: Irwin. PA

Lease purchase = Company driver with all the costs of an Owner Operator.

Good Deal huh!!

Uturn2001 · Posted: Sat May 10, 2008 12:25 am Post subject:

Quote: How about o/o in general? Would I be correct in surmising that now is a bad time to take out a loan on a truck?

That depends on if you can get the freight at the pay needed to be successful. If it were me however I would wait for at least a year and see if things settle down before even considering buying a truck.

Evinrude · Joined: 10 May 2007 Posts: 400

Uturn2001 wrote: Here are the problems with most lease purchase deals:

1. Many are actually just leases. You do not own the truck after the last payment is due.

2. You often end up paying 50-100% more for the truck than you could have bought it for through regular financing methods, even with bad credit.

3. If you do not make enough to live on you usually can not take the truck with you to a better company.

4. If you terminate the lease early you are often hit with all types of extra fees that at the least will eat up your maintenance fund and last pay settlement.

5. Many times you have to have your truck serviced at the company's specified location(s).

6. The company who you are buying the truck from is the same company who really controls your paycheck. They can all too easily have you only run enough miles to pay for the truck, fuel, insurance etc and nothing more, or even have you run fewer miles than that to quickly force you to turn the truck in so they can lease it to someone else. In a company lease or lease purchase the truck ALWAYS gets paid first.

7. With many L./P's all you really end up being is a company driver who is paying the company for the privileged of driving their truck. With many of the rules they place into the L/P agreement you just end up with all of the headaches of being an O/O with few or none of the potential rewards.

8. when you get sick and your off work for a period of time the lease payments keep on coming in.

Copperhead · Joined: 27 Oct 2007 Posts: 105 Location: Kellogg, IA

It is not a bad time to do the O/O thing, in fact, some in the industry (like myself) would say it is a good time to consider the possibilities. There are a lot of indicators that late 2008 and then 2009 will prove to be money makers. Just as in farming, it is a gamble.

I just looked over my spreadsheets since the first of the year. After ALL expenses including putting $1000 per month in my maintenance "kitty" and health insurance and setting aside my self employment tax, SS, and Medicare taxes, and $1600/mo truck payment...... I netted about $5000 a month on average. That is running Midwest Regional, by the house a couple of times a week, and off on the weekends. And that even takes into account the high fuel prices (which means nothing if you are getting good fuel surcharge).

It takes a lot of effort to make the numbers work. If you are considering doing the O/O route, then study, study, study! Learn all you can about running a business. There are a lot of good resources available. Leasing on with a company also requires you "study" everything about the company you can. What are there primary customers, is there a flexible mileage compensation based on length of haul, what is the fuel surcharge rate and how is calculated, what is their SAFER rating with the FMCSA, etc. And then you need to talk with a LOT of O/O with them.

Personally, I would not recommend the lease purchase route. Buying on your own is always a better solution. I realize it is not practical for everyone, but then you need to take a serious look at you financial condition and reevaluate if getting a truck of you own is really a good move. A good way for a company driver to do this is to buy the truck they are in direct from the company. After all, since driving it, you will know what condition it is in, how much repairs have been done, what type of fuel mileage it is getting, etc. With a lot of carriers, especially the smaller ones, you can usually buy the truck you are in and negotiate a better deal than if you went with a dealer or the dreaded lease/purchase. It is not unrealistic to get a tractor direct from the company and save literally thousands of dollars over buying the same spec'd truck from a dealer. Besides, you have access to all the maintenance history records as a plus.

If is very possible to make decent money getting a truck, even in today's economy. But you have to operate it like a business and not just do it so you can strut around proclaiming to the world you are an O/O. If you manage it right and watch the finances like hawk and spend as little as possible on frivolous junk (especially watching the home/personal spending), you will have enough to cover a major repair and take time off when you need or want to.

CrazyTulip · Joined: 08 Sep 2007 Posts: 184 Location: Central Florida

Leasing: NO. O/O? Yes, if you know what you're doing. You're a newbie so I would suggest driving company for 1-2 years and get to know the industry a little bit, ask questions etc. It's not something you want to jump into without the know-how. You wouldn't open a restaurant without knowing the ins and outs would you? BOL to ya.

Whammo · Joined: 02 Apr 2008 Posts: 140

CrazyTulip wrote: Leasing: NO. O/O? Yes, if you know what you're doing. You're a newbie so I would suggest driving company for 1-2 years and get to know the industry a little bit, ask questions etc. It's not something you want to jump into without the know-how. You wouldn't open a restaurant without knowing the ins and outs would you? BOL to ya.

I have no intention of leasimg or becoming an owner, I just wanted to know why everyone thinks it is a bad move.

Thanks for the advice anyway though :)

CrazyTulip · Joined: 08 Sep 2007 Posts: 184 Location: Central Florida

Whammo wrote: CrazyTulip wrote: Leasing: NO. O/O? Yes, if you know what you're doing. You're a newbie so I would suggest driving company for 1-2 years and get to know the industry a little bit, ask questions etc. It's not something you want to jump into without the know-how. You wouldn't open a restaurant without knowing the ins and outs would you? BOL to ya.

I have no intention of leasimg or becoming an owner, I just wanted to know why everyone thinks it is a bad move.

Thanks for the advice anyway though :)
Oh ok, well no problem that's why we're all here. In that case I just think leasing is a dead end street and usually will get you in trouble. There are a few examples out there who are doing ok, but for the most part they don't so I'd stay away from it. We were in it in 2005 and it was the worst thing ever so now I try to warn others away from it.

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