[mndriver]

Originally Posted by merrick4

mndriver, just out of curiosity, why would you never lease from Ryder/Penske?

Thanks

I would rent a truck from them for the purpose of repairing a truck I own.

I would not do a long term lease for the use of equipment.

I would have to know specifics, but it has to do with total cost of ownership.


Your lease payment is $2419.70. and you kept it for 54 months. Since you also say that you have financing with GE Financial, that's likely at 7% or better interest. I figured below for 60 month, 7.5 % interest and $2419.70 payments a month.

http://www.bankrate.com/calculators/savings/simple-savings-calculator.aspx

in 5 years, that would be payments of about $174,000. Figuring you can buy a rather loaded Evolution right now for $152,000 which I looked at on Thursday, that means you are paying at least $22,000 in interest. And if you are purchasing the fleet, likely a dealer will work with for pricing. I also doubt you would be buying a truck this loaded. (Yes, I just looked at an Evolution that had full gage pack, DD15, DT12 3.08, insulation package and Parksmart APU).

Your maintenance expenses are going to be the same. With a fleet of size, it becomes a point where realistically, I would have brought my maintenance in-house and started to perform the routine stuff on my own. Penske and Ryder would set you up for it, but when you consider the costs, you still have to consider they WILL do it at a profit. likely 35-40% mark-up on you. So while it would cost you do $85-88 to do your maintenance, they will charge you $120 to do it per hour.

I see full-service leases as a short term answer, not a long term item.

But, like you said, you are someone that would rather sit back and let others show you how dumb they are than to share with them.

By the way, I have had outside consultants that wanted to act as a middle man between me and Ryder or any lease company but they couldn't help me. They tell you one thing and it turns into another. I am a very plain spoken person. When new drivers walk into the office they assume I am just another driver. When sales people or reps, or adjusters etc walk in they go over to the dispatcher's desk. I had one risk analyst turn his back on me and he was asking the dispatcher certain questions and he wouldn't turn his back and brushed me off. He got on my nerves, and out went the plain talking and in came the $.50 cent words. (I'm self educated and read and read and read and looked up every word I didn't know). I started pointing out things in the CFR's (Code of Federal Regulations); Man how he came in is not how he left. I like to let them think I'm dumb as it shows them for who they are. But I started tearing into those consultants and they move on from me.

[merrick4]

I think you are misquoting me. Of course it's better to let the salespeople or most people in general underestimate you, I stand by that, but the not sharing; well you are mixing the two. I have answered every single question ever asked of me on this board.

Anyway, I am not here to sell the leasing program for Ryder or Penske. They have sales people that can do that. I just put out the facts of what I am doing. What I'm doing may or may not work for someone else.

As for the interest I have been in the 6's. I think the last trailers I bought were at 6.5%. I know of Ryder's mark up, I have all the prices and know my markup. That's why I have them work on certain things and not others.

As for bringing maintenance in-house, well if it's not broken in South Florida there is no in-house. Actually when I owned trucks I use to use as much as possible Painter's Garage in PA. There hourly rate was below $70 an hour and they were unbelievable mechanics.

One final thing, the lease or not to lease, there is always one number that people never add and which is impossible to add; service failures. We almost never have service failures due to mechanical problems. I think the worse we ever had was when a truck broke down in Idaho and they had to tow a sub in from Colorado. We ended up only being a few hours late for our appointment.

Schneider called the office Friday with basically an open checkbook for a load to Florida from Georgia. I got to talking to the guy and asked why they just didn't put it on a Schneider truck. He said they had nothing available in the area. I asked why didn't they just deadhead a truck over and basically he said right now they were more worried about a service failure (it was going to Walmart in Ft. Pierce) then they were about the price it cost. It ended up costing them about $4.00 a mile (loaded) we had to dh so I don't know off the top of my head how much it came out to be.

Now if Schneider, as massive as they are can't cover a load with thousands of trucks, I can assure you that little old us with under 40 trucks, can't provide the level of service we offer if we bought the trucks.

[mndriver]

I see $750+ per month as a bunch of money after a couple years built up. Accrued interest at $22,000 per truck * 35 trucks right now is $770,000.

What is service failure? Is it loosing a load due to weather? Biggest issue I have. As to mechanical failures, I have had ONE that would have caused an issue in 2 years. When my power divider failed. A quick call to a buddy of mine, load was delivered on time and nothing was late.

Service failure to me is break down of communication. We utilize mechanical devices that have mechanical issues at time that no one care truly predict at time. A concerted maintenance effort should alleviate most of those issues in my opinion and is what causes most "failures". Poor maintenance programs. But that's just my view.


You situation does interest me in how you are doing it as I have a couple folks that are wanting to know if I would be interested in expanding. One thought I always had was to have a fleet of 35-40 trucks and then an LBO for my retirement. But do I want the headache of employees. MN wants $17/$100 salary for a driver for a new company for work comp premium. Best I have gotten was down to $15.50 / $100.

So considering a lease vs a purchase vs a truck that gets 7.5 vs 6.5 mpg have all been things I have been beating over the spreadsheets rather hard lately.

And newer equipment with all the emission maintenance issues do not appeal to me much less a new equipment lease.

[merrick4]

I didn't drive that long, but I drove in every state except Vermont. I didn't have problems with service failures much either because I owned the truck and paid attention. You can forget that with employees. That's out the window. By the way, I asked the dispatcher and actually it was $4.00 a mile for that Schneider load, all miles. Loaded it was 319 miles for $2,000.

I ONLY point that out that they obviously only cared about service failure at that point. I am NOT pointing it out to see "look at this money", people neglect to mention the cheap ones. I don't do that.

Also I hear you on the residual value etc, but there is more to it than that for me. We all have personal preferences. For instance I live in Florida because I can't stand the cold. Whereas there are plenty that don't like the heat and like the four seasons. I raked enough leaves growing up.

Anyway, one thing about me personally is I don't want to own ANYTHING. If I wanted to I could just walk away from this whole thing. Between my wife and me, we do very well but we live well below our means. The other day, we went to a very exclusive private school which we are trying to get our daughter into. It looked like a Mercedes car lot there. My wife joked we should be parking in the janitor section with what we drive. I just don't want anything. I don't want to be broke either, so I do what I have to do, but honestly if it weren't for my daughter, I would have cashed out by now and moved on.

At that point you are talking quality of life and that's hard to put on a spreadsheet. But anyway as I said, ask away, I will answer any and all questions. My lead dispatcher actually just read this from the beginning and was stunned at how little I knew (not that I know so much now but obviously I am better informed than when I started). People here helped me, so it's my duty to keep posting.

Keep safe.

[Bonolly]

Originally Posted by BigBankHank

The only thing that separates the men from the boys is the price of their toys....... One day you may able to stroke a check for truck like I can.....

penetrating

[merrick4]

Well that guy BigBank blah blah blah, was just ridiculous. Solo put him in his place. I don't care if someone can write a check for that kind of money. I see ( or hear of REAL wealth). There is a whole class of people that the normal people, even very wealthy people don't even see.

My wife works for a Broker/Dealer and all the clients are from South America. Good lord they money that these people have is beyond belief. They don't deal in stocks, they deal in fixed income bonds and stuff I don't understand. They deal with institutional clients and then people so wealthy that they are considered institutional wealth.

She was telling me of one new account they are opening, and one of the owners is from the U.K though the business they own is in South America. He's like the 4 wealthiest man in the UK. They have millions and tens of millions of dollars. And I'm quite sure they are not on a trucking board bragging like that schmuck was doing.

[Roxie]

You GO merrick4!!!!

As the wife of a new O/O, I have learned a lot from your posts...thank you! Hubby wants me to become his dispatcher/broker when my job is finally finished with Uncle Sam. That scares me a little. But to an extent, your posts have given me encouragement.

As to the "wealth" issue...a very wise man (my father) once demonstrated who the "wealthy" (financially) really are in life. We grew up in a modest ranch home with modest cars "Leave it to Beaver" style. My sister was starting drivers education classes and needed $100 to pay for the class. There were a lot of families living in big houses by the lake, driving expensive cars, kids always dressed in style, etc. The kids had a tendency to look down on others who did not live in "their" neighborhood. My dad wrote the check for $100 and sent my sister off to drivers ed. She returned with a shocked look and told my dad that she was amazed at how many "wealthy" kids had to make payments to pay the fee.

The lesson is that living on credit or in debt is not "wealthy".

I do get that you do not want to "own anything". I also get where mndriver is coming from. In the big picture, you are circulating more money in the economy by paying those huge interest fees for something that you will never own. However, is it really that cost effective if the lease is not 100% headache free?

[mndriver]

Roxie, the beauty of small business, no business model is the perfect model. It's what you can make work for you.

[merrick4]

Thank you Roxie for your kind words. Honestly, I think the math on the lease vs buy needs to worked out a bit. We haul sensitive perishables, and I've already had to replace a couple of units just so we had top of the line. I readily admit that I don't have it worked down to the penny on how much I'm saving or losing by doing it my way. As it stands now, I pay per engine hour on the leased units and I have no surprises. The compressor goes, not my problem (unless I'm hauling ice cream) but then I have the claim, not a repair to boot.

I had a truck down a few weeks ago and they gave him a sub. Well as I believed I mentioned above, he was driving empty and the wind lifted the back end of the trailer and just pushed him over sideways. They gave him another truck and the trailer was still usable. His own truck was done and in Ft Pierce. So I had to pay a rental rate for the truck used down to get his and he got his truck back and is out working. It cost me the deductible on the truck (the sub) and he is generating money.

But like mndriver said, whatever you can make work for you. I have had many people tell me I was crazy to get into this Ryder thing and they all say the same thing now. Namely, "it seems to be working for you". But again I will stress FOR ME. There are hundreds that are doing it their own way and it's working for them. But in short all I can do is write what I'm doing and try and be honest and give the full picture.

As for the financial wealth, well I live next to Boca Raton. It's one big fashion show down here. I remember driving and hardly seeing a Mercedes in a lot of towns. I literally could walk from my home to a Lexus dealer, a Mercedes dealer and a BMW dealer and the Audi is 10 minutes on bike. I don't get caught up in that. But to each their own. There is a saying in Spanish "para los gustos se hicieron los colores" (For the tastes they made all the colors). If people want to spend 40 or 50 thousand on a car, well it's their life. Really if it weren't for all of these people buying and buying we'd have nothing to put in the back of our trailers.

Anyway good luck to you and your husband on your new venture. I wish you all the best.

[merrick4]

Well the final offer for the ticket in Wisconsin is $3500. I am going to paste the last email I got from the lawyer: (by the way the cop apparently wrote the ticket based on the wrong statute.)

I like our dismissal motion but the hard truth is that the DA can amend the charge at any time to steer away from the improperly charged statute. If he does so it opens up an additional defense if the driver were delivering to a location on the specific designated route. I do not think we have those facts there. The facility where he was going is on a different road that is not on the weight limited route. If I were confident that we could make the case on the absolute defense we’d do so. I don’t think we can.

And the email before that was this:

The motion to dismiss is set for next week I have not received any filed/written response from the County. As previously discussed, I anticipate that the response will be a motion to amend the charge since this charge/citation does not appear legally proper. We will of course oppose that but it would probably be granted. If that happens we will discuss an additional motion to address the new charge.
At this point, there has not been any other offer better than what we last talked about ($5,000).

On the off chance that they make an updated offer at the motion hearing, we need to have a “bottom line” figure that you would agree to pay to resolve. I’d recommend $3,000 or so.

If we can’t get the case resolved at the motion hearing, the final pre-trial is set for ....... We did finally receive the deputy’s records and, as we suspected, he wrote a lot of identical citations in the three years preceding this one. That doesn’t do much for the motion to dismiss but we would try to introduce it at trial to show that this “safety law” is really just a big ATM machine

Anyway, I'm sending him a check tomorrow and when I get the receipt back I will post the lawyer's name. As you can see he has been very communicative and by far the best lawyer I've ever dealt with. I still don't know who's paying him but I will post that other company who got the ticket the same day as me or actually he was in court for it the same day.