[Evinrude]

Originally Posted by Uturn2001

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]

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]

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]

Originally Posted by CrazyTulip

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]

Originally Posted by Whammo

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.

[Whammo]

Originally Posted by CrazyTulip

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.

It seems to me that owning your own rig sounds better than it really is. Even under the best conditions it is a lot of responsibility and pressure. I have nothing against making money, but I rather have the least amount of stress in my life as possible.

[Copperhead]

Well..... Duh! Owning any business is more pressure than just being an employee. But then as an owner, you have more control in how it is set up and run. And, if you do it right, you get more of the rewards.

I never heard of ANY business owner that only worked a '40' hour workweek, even non trucking. Not everyone should own a business and that is ok. Nothing wrong with that. Everyone should live within their own comfort level. Some people are risk takers and some not. But, you can't get the reward without taking some level of risk.

Is there a chance in owning a truck you could go broke? You bet. But then a lot of current millionaires have filed bankruptcy once or more times before they hit on the right recipe for making things work. Some of us just like hanging out over the edge a little. 8)