:roll:

The short and simple answer is that they do so because they can. The "driver shortage" is a myth. There is always a fresh supply of suckers who are willing to hold the steering wheel for these companies. In fact, it is in their best interest to have the lease purchase driver fail, as they can then turn that vehicle over and put yet another sucker into it, and continue to do so over and over and over again. The lease purchase is a HUGE revenue generator for these companies.

That still makes no since. It would seem less expensive to keep a driver than train a new one to replace one thats generating revenue. What your saying might be true but on the face of it there is no reason for the action you imply.

While it may be less expensive to keep a driver than to train a new one, these companies are unable to do so because the working conditions they provide generate high turnover. All these carriers that are offering lease purchases are sitting at turnover rates around 130%, sometimes more.

Plus, a driver who has been there for any period of time will likely want additional revenue when they realize that they cannot survive on what these companies are paying. Since the carrier is obviously not going to provide it, they simply turn the truck over to a new sucker who will rent a job from them.

Let me give you a scenario: Lease purchase company A gets a driver into a L/P truck that has a payoff period of 36 months. At the end of 36 months of payments of $600 per week, they would have the truck paid for, and the carrier would stop gaining revenue from the truck. BUT, if that driver fails at the L/P at 12 months, the carrier can then put another sucker in to the same truck, and start that 36 month cycle all over again. SO, the carrier could keep doing this until the truck is completely used up, or someone manages to get lucky and finish the lease.

Well I can see that point there, Making money out of a truck like that. Thats the same way a tote the note lot makes money on repo cars over and over.
At $600.00 for 36 months or 156 weeks thats like $90,000 for the truck if you do make it. if those figures are accurate.....Hell you can buy a used truck for a lot less than that. And that sure don't leave much room to make money for the driver.
Thanks for the lesson.

Miloh.

I think the large rate of failure also has to do with the fact that 99% of these lease ops have no business running a cash register at Burger King, let alone running their own small business. As much as I hate to say it, I know several L/O from CRE personally. They are doing quite well and two of them are on the Master Premier Jedi Knight level, or something like that.

But, they've been leasing more than the "36 months" that a lot of people alledge the company is pre-determined to fail you at. Leasing a truck is no different than owning one in that you have many of the very same expenses, ie fuel, maintenance, tires, etc. There are a lot of O/O who fail just as miserably as some L/O. But you're not as likely to hear them bitch and moan because the only person to blame is themselves. It's much easier to pass the blame onto CRE, Swift, JB Hunt, etc. Hell, even the much respected Schneider is now offering a lease. Go figure.

Is CRE a terrible company who's out to get you? I don't know because I've never worked for them.

The difference between buying and leasing are:
Truck payment of 700-1,000.00 per month:Lease payments are around 2,400.00 a month.
Buying gives you MORE control as to what to do with your equipment such as leasing on to a different company or getting your authority altogether,as a lease op you are stuck with the same carrier and THEY control how many miles you get each week. HUGE difference between the two.

Yesy there is a huge difference between an owner and a leasor. The payment is one. But most O/O aren't leasing on to a bunch of different companies. They typically lease on to a carrier, while some go with brokers to haul freight. If they lease onto a carrier, then your point about how they control your miles is still very much true. You still are at their mercy to dispatch you miles.

The payments can vary for O/O.

New truck- $100,000 - 20%(20,000) = $80,000

$80,000 financed at 7% over 36 months is $2,506.90

Now that's for a new truck and that was a good rate.

CRE's current lease payment for a NEW truck is $443 a week x 4=$1772

Again there are a lot of variables, buy new or used, credit score, money down, etc that will affect the O/O payment.

Seems your calculator is missing a few numbers.

$443 a week X 52 weeks a year = $23036 per year / 12 months = $1919.67 per month.

And when did CRE drop their lease payments from over $600 to $443?

I think the payments went down a few months ago.