Lease Purchase
 

Now before everybody tells me not to do it(because I am not). ALL that I want to know. Is there a L/P deal in the whole wide world that you guys would sign up for?

Re: Lease Purchase
 

No.


Next question?

Re: Lease Purchase
 

Is this a invite for me to come down and visit you and Bop you in the Head? :P
What's up with Ambrosious(sp)?

It is JUST a question. If you look in any trucking magazine almost everybody offers a L/P. Does this mean that all of them are no good? There isn't one that somebody could succeed with?

Jumbo...they all offer it cuz the company makes money, its a crap shot whether you will, but either way sure the companies are all over the magazine offering it cuz THEY make their money.
You know I can buy gambling casino magazines too (full of casinos who like the trucking companies say I will make $), do some gamblers make big $, am sure they do, IMO same crap shoot either way.

I would but sometimes it seems I just like to argue.

I know of one lease purchase that can do these things for you:

- get you started when you don't already have the money yourself
- provide you with a lot of support. You've get help with:
*to acquire a tractor
*how and where to do routine maintenance on a tractor
*how and where to get repairs done
*registering, permitting, insuring...
*small business paper work- receipts, estimated taxes...
*get freight and or dispatches

You can be a company driver forever and never learn this stuff. If you are exceptional like ol' Steveo (seriously Steve, not everyone can do what you do) you don't need to lease purchase. Personally, I think going this route can get you started as an owner operator. Most guys who lease purchase will never own the truck even though that's supposed to be the big promise. I lease purchased for four months and later bought a truck and signed on with Landstar.

I would recommend my former outfit, Perkins Specialized Transportation. I would also recommend you get out of lease purchase as soon as you know what you are doing and can finance your own truck. Lease purchasing is wwwwaaaaayyyyy too much like being a company driver ( :lol: company drivers aren't allowed to look at this forum, are they?) Your dispatcher tells you when you'll drive, where you'll drive, how long you'll drive... Once you can get your own truck and you know where to get PMs done and you've got your paperwork filing systems going and you can out run your wife, your mechanic, the tax man, the finance company... say 'thank you very much and goodbye' to your lease purchase.

If he's still around, I'll let- who was that character with the pirate avatar who always used to talk about getting your own authority- I'll let one of the others speak about 'real trucking' since I'm still just a leased on Nancy boy 8)

Am sure you forgot 1 Cam....let me see....oh yeah!

* When to $hit n where, and a nice friendly reminder to remember to wipe
your a$$

LOL

Bea-u-ti-ful :lol: And oh yeah, you get to go home for three days every three weeks and after one year, why, you get the whole week off! :cry:

What your saying sounds really crazy. I wonder why anyone would sign a lease purchase like that even if your making money your never home to enjoy....Oh well

What do you think company OTR is like? The ultimate goal is to get his own truck. The issue at hand is how to get there. Now, what is crazy?

There is absolutely no fleece purchase program offered by ANY carrier that I would become involved. If you have poor credit and no money, then you don't need to go out and buy a truck. All you will do is complicate your current financial situation. The best way to buy a truck is to pay cash. If you don't have the funds to do that, then you need to find a lender who will finance it for you. There are leasing companies who may do a lease purchase with you. Some may be all right. At least you can move the truck if things don't work out at your current carrier. What some don't seem to realize is that this is a business. When you lease or buy a truck, you are now in business. You are no longer an employee. Running a successful business requires a certain level of management skills. Not everyone is cut out to run a business. I have probably met more who USED to be OWNER OPERATORS than I have current owner operators who have been doing this for many years. I do have friends who have owned trucks for many years. None of us EVER leased a truck from a carrier. We all managed to buy our equipment the old fashioned way. Some of us paid cash, others used their local bank or other lender to buy their first truck. Unless you have the money to pay cash or at least have a good down payment, you should continue to drive for a carrier until you do have enough money saved up to do it without such a strain.

It's possible the underlying question maybe if there is a L/P he should consider, but this is pure assumption. Let's re-read his original post.

Actual, hypothetical, it doesn't matter.

Bottom line, just about the whole board agrees, 'absolutely not'.

I'm the lone individual who thinks it could be a way to learn a lot of the extra stuff you never learn as a company driver. Again, one should not necessarily expect to own the truck he ostensibly is trying to purchase (L/P). One should get out as soon as he knows what he is doing and believes he can acquire a truck and make a go of it. I want to add one more. DON'T GO FOR THE CHEAPEST TRUCK BECAUSE YOU THINK THAT'S THE QUICKEST WAY TO OUTRIGHT OWNERSHIP. GO INTO IT NEVER EXPECTING TO OWN THAT TRUCK- ONLY THAT YOU'LL MAKE SOME MONEY AND LEARN ABOUT TRUCK OWNERSHIP. GO FOR THE TRUCK THAT IS LEAST LIKELY TO DRAW FROM YOUR MAINTENANCE FUND. YOU'LL WALK AWAY WITH MORE AT THE END IF YOU DO. Sorry Gman...now I've said my peace 8)

BTW- Great avatar, Serbie. These dogs, they have no shame :lol:

Cam, I am not necessarily talking about buying the cheapest truck you can find. What I am saying is that you try to find the least expensive truck you can find that is in good shape. From your post, you seem to look at leasing a truck from a carrier as a means to learn the business. It is a very expensive way to learn your way around trucking. I agree that there is a period of learning. I think that it is good to buy on your own rather than leasing from a carrier. Your maintenance expenses should be about the same either way you go. You will likely pay out less money when you buy. You will also be building equity in something you will one day own. When you lease a truck from a carrier, you are basically throwing money away while you pay for a truck you will never own. You will probably also pay more than if you outright purchase. You can often purchase a truck for about 1/2 to 1/4 of what you will pay to rent a truck from your carrier. In addition, you will likely make more money going with a carrier who doesn't have a lease purchase program. Most of the lease purchase carriers are on the lower end of the compensation scale.

That's all sound Gman. I can best make my points just talking about myself, however. I started this thing with zilch, zippo, nothing, nada. Well, one thing, from my Army days I had great credit with USAA, but you may remember some of that saga. Actually, that's the situation I was in when I started my least purchase, too.

See, I'm interested in a lot of stuff, but I'm really not all that ambitious to get rich. I had a hard time visualizing truck ownership. There was a time many years back when I was digging around in the seats of my car just to find change. Spending $500 for a fill up was an abstraction for me. $3,000 for tires. What happens if someone swipes your truck in the parking lot- you pay 2-5k or whatever out of your own pocket? Accountants? Permits? When I was at Perkins they had us doing 'half PMs'. What's a half PM? Where do you go to get a PM done anyway? If fact, what's a PM, at least in comparison to a DOT, an 'A' service, a 'B' service?

I've got to hand it to Steve, he must be able to work in abstractions very well. You know, to understand something from words without ever actually seeing it or touching it or doing it or at least watching somebody else doing it. What the lease purchase did for me was to allow me to see everything and to walk through it. They had support personnel to take us by the hand with everything. One axle alignment, 3 axle alignment...how much do batteries cost? What kind should you get? Where should you get them, how often should you get them? Am I going to need 10k in the bank at the end of the year for self employment and income taxes?

Gman, so much is second nature to you you can't imagine anyone not understanding it. I've seen you write about good, cheap, used trucks. You do understand a lot of people haven't the foggiest clue about how to pick out a good truck and that whatever they learn, it had better be up to snuff against that salesman who has been selling them for nearly 10 years.

People pay lots of money to go to college and often it has little to nothing to do with how they end up making money. With a lease purchase, you are learning how to be a truck owner and you are earning a wage comparable to a company driver even without any equity in the truck. I think the advice people need is not just 'don't do it.' The advice they need is if you are going to do it, do it 'this way', eg., don't take the truck with the quick payoff, take the one with low miles or especially the one with some warranty if there is any (Perkins was putting guys in new and nearly new trucks) .

Cam, one reason to drive for a company a couple of years before buying a truck is so that you can understand some of the points you make. If you are a company driver and want to become an owner operator, it would be a good idea to track the expenses you see your company spending on the truck you drive. If you check expenses being spent, then you will have an idea of what it costs to run a truck without committing to a lease purchase. And just because a truck has low miles doesn't mean that it is a good truck. I have known of some that have needed an in-frame at 300,000 miles and others that have gone over 1 million before any major work. I spoke to someone a few days ago who had over 3 million miles on a truck without having any major work done on the engine. Just because a truck is under warranty doesn't mean that everything will be covered. You may buy some assurances with a lower mileage truck, but it is no guarantee that your purchase will be problem free. I would opt for the less expensive truck that can be paid for in cash or within a shorter period of time. No one should start out with a big truck payment. Some make it, but there are many who fail due to over extending themselves and not fully understanding what it takes to buy a truck and run a successful business. There will always be some who will make it no matter what the odds.

The original purpose of the post was to simply ask the question and find out everybody thoughts on the subject. Like I said alot of companies offer them. I have been around long enough and read enough to know better than do that. The only ones I usually hear anything bad about are Prime and CRE. It was just a question to find out if anybody ever heard of a good company that didn't hose their L/P operators.

I have never seen a lease purchase deal that was worth it but then I came across TDLP Truck Drivers Lease Purchase. http://www.tdlp.com/ and now I wonder. I've leased cars and I usually don't keep a car more then 3-4 years and I apply the same reasoning....I don't care if I own it. When it's old and used up I'll more on to another new truck. WHat about leasing from say Freightliner? Is it true that you can deduct your lease payment if your not buying?

You can deduct your lease payments. You can also depreciate your equipment as well as the interest payments. There are ways to accelerate depreciation which could be more or less advantageous than leasing. If you lease a truck you will have nothing but a tax deduction at the end of 4 years. If you buy you should have some equity in addition to the depreciation. You will also have more money in your pocket because you pay less in payments, in most cases.

This company is similar to Truck Tech in Pennsylvania. You MUST lease to one of the carriers who will deduct your weekly payments for them. I don't see any difference in this program and one where you go direct to the carrier to lease a truck. I doubt if you could simply leave the carrier until the truck was paid for unless you go to one of the other listed carriers. I am not familiar with some of the carriers on their list. Some I am familiar pay a low mileage rate, such as Landair. Fikes pays percentage and you could probably do fairly well with them.

If you want to lease a truck, you would do better finding a company who leases trucks and equipment and will allow you to send them payments directly. There are some legitimate leasing companies, such as Kennesaw. I can't think of any others off hand. Most charge a higher interest rate than a bank or other lender. I would NEVER commit to leasing a truck through a company who would restrict where I could lease my truck or who would prevent me from moving it should the desire arise. Besides, most owner operators won't stay with any carrier for 4 years.

sammons trucking company, i read about has a program where you dont have a fixed truck payment(so if you take time off you wont fall behind) the more you make the sooner your truck will be paid off, if i eve had to go that route id look for something like that :lol:

I would be wary of any company who didn't have a fixed payment amount and time frame. There has to be some really small fine print which needs to be checked. :shock:

Hey GMAN, I asked earlier in another thread but I don't know if you saw it as you are pretty good at answering questions. I called Crst and I need another month where I am. I asked them If i could use a penske truck and the recruiter didn't know the answer. I could buy a truck for cash without a problem and I have enough for breakdowns, but I figure just starting that that might be the smarter thing to do for the first few months anyway. Besides I never did flatbed and I want to make sure I'll like it. If not, and I don't see why I won't, I don't want to be stuck with a truck and have to lease on to these big companies for 90 cents a mile. Any opinion on whether this is feasible?

I think this is a good question for this thread anyway, cause I never hear this option mentioned. That is renting a truck instead of these lease option ones. I do believe someone on this board, I think it was bandits cousin was renting a truck, but like I said other than that I don't hear it mentioned.

Thanks

By the way Cam, I'm glad things worked out for you. You were smart and did what was good for YOU. Many won't need to do that, but if that's how you work, well like I said, I'm glad it worked out for you. I do do as GMAN said, everytime I have a repair, I'm either standing there while they fix it and asking questions or after I ask a bunch of questions.

None of this really matters to me, I've got a truck. And Jumbo, don't worry, all this talk isn't really about the OP anyway. What this is about is what we're saying to guys everytime they come on this board asking about L/P. I'm no crusader, I'm not trying to change everyone's mind. Right now, there is no information to be gained on this forum about L/P except 'don't'. I can live with that :wink:

I don't know what their policy is concerning taking a rental truck. You may need to get approval for that from operations. I haven't checked the cost of renting a Penske or Ryder truck, but I would think it would be rather expensive. I believe they have a base rate plus mileage. CRST Malone will train you on securement. If you are going into flat bedding, you will also need to either rent or buy a trailer. You can rent one from CRST for about $165/week. You will also need to purchase tarps, binders, etc., You can buy them through CRST Malone for about $2,500 (new). They sometimes have used you can buy for less money. They will do a weekly deduction along with a deduction for your base plates and permits, tarps, etc., If you rent a Penske truck you probably won't need to worry about an additional charge for base plates and permits. All of the deductions add up to a lot of money. CRST Malone pays percentage. I doubt whether you will be offered anything for as little as $0.90/mile.

I think that if you plan on becoming an owner operator you should just jump in and give it your best shot. Whether you pull flats or vans you will need a truck. If you get a good buy in a truck, you can always sell it and get your money back. I would imagine you will pay at least $500/week to rent a Penske truck.

Thanks GMAN,. As for the 90 cents I meant if I didn't like CRST for some reason and went with one of the dry van companies. Seems like that's what most of them pay.

If I do go with them, I will be going over all these deductions with a fine tooth comb. I'm a tight wad and if I can get things done cheaper I will.

You're right, I should just jump right in and buy a truck. I just like the money in the bank earning interest, but I have to pull it out at some point. Nothing ventured nothing gained right? :D

Thanks as always GMAN. When I do get a truck and start going I do plan on putting all my figures out here in the open. I think the feedback here is invaluable. By the way I still say you should set up a consulting business helping new O/O. I saw in one of these trucker magazines lately some guy is doing that with how to choose the right freight lanes and to set rates etc. You could be doing that as well.

Thanks again

I appreciate it, Merrick. CRST Malone has vans running out of Birmingham that pay percentage (or did at one time). I believe CRST in Iowa pays percentage, but I am not as familiar with their operation. There are other carriers who also pay percentage to owner operators. Most require a minimum of 1 year driving experience. Landstar is one of the larger carriers who pay percentage.

I understand your wanting to conserve capital, but it costs a lot more to rent a truck than to buy. I don't think you can make up the interest you will earn in the bank with what it costs to rent a truck. Even if it only costs you $500/week to rent a truck and you keep it for 3 months. That is $6,000 you will spend on a truck that you don't own. You could spend more than $500/week. That $6,000 is about 1/3 of what you could spend to buy a good used truck. I don't think you can offset the cost of renting with the earned interest on the money. I found CRST Malone to be very up front with their charges. Landstar tends to nickel and dime you to death on some of their charges. You could do well with either company. There are also others who pull vans and pay percentage.

I think it could be very helpful to those just starting out, for you to post your figures. I will keep the consulting in mind. Thanks for the vote of confidence.

Thanks again GMAN. By the way about the 90 cents I got that from Melton's website. They are supposed to be a good company and this is what I found:

Melton offers a competitive compensation plan for owner operators. Below you will find the highlights of our contract:


90 cpm loaded and empty
Fuel adjustments that change with the national average fuel price
$40 tarp pay , $40 Stop Pay
PAID toll and scale tickets
PAID fuel tax processing fee
FREE base plates and permits
FREE trailer usage
FREE trip paks
Headache rack available
Group Rates on required insurances available
$1000 sign on bonus to those with their own tractor

This doesn't seem right to me, of course I only go by what I read here. That's why I am nervous buying a truck. I don't want to be hauling for fuel. But at least I am fortunate that I will have the needed financial cushion you always say is needed. Again thanks

You are welcome, Merrick. You don't have to SETTLE for $0.90/mile. These carriers try to make it appear that they are giving you much more than you are really getting. If you only make 75% of the line haul and it is say, $1.50, then you are making $1.125/mile. You should get all of the fuel surcharge. Some carriers pay a percentage of the line-haul, others pay a flat mileage rate in addition to the line haul rate. If the percentage is 17% then you would need to add that to the gross rate of $1.50. At that rate the fsc comes to $0.255. So you are actually getting $1.125+0.255 or $1.38/mile to the truck. I realize Melton says that they pay a fsc, but don't say how it is calculated, from your post. If it is the same percentage rate, then you will make $0.90+ 17% or $1.053/mile. That is a difference of $0.327/mile. If you keep your deadhead to 10% you will still come out with more money. Base plates should run about $0.015-0.022/mile based upon 100M miles. The line haul rate of $1.50 is an arbitrary number. You could make more when you run on percentage. One thing I learned a long time ago. Nothing is FREE. If a company is offering something for FREE, it will cost you something. The main thing in this situation is it will cost you revenue. Some people are more comfortable making money by the mile. I prefer making money on percentage. That way I can have more control over how much money I earn. On percentage, I can turn down the cheap loads and only haul those which will meet my minimum haul rate. When you work by the mile, it really doesn't matter what you haul, where you go, or the rate, since you are paid the same, regardless.

also keep in mind that with the big carriers you are competing with company trucks.....not a good idea in my opinion.

tootie

I spoke with Melton today. They started with the fleece purchase. I thought she said that I would make almost as much as a company driver. I could of sworn she said that but I was thinking I must of misheard her. So I asked her if that's what she said. Yep that's what she said. But in the end I would have my own truck after a balloon payment of course.

I told her that I could buy my own truck, but she started telling me that my payments would be tax deductible. Unbelivable. It's like a mortgage broker telling me that I would be paying 9% on a mortgage but that the payment is deductible.

Leasing ain't for me
 

I really appreciate all of the wisdom and experience you guys bring to this post. You are some pretty incredible, intelligent gentlemen and I thank you for sharing so much here.

I have been driving for US Xpress for a year now. I wanted to make more money and inquired about a lease for the heck of it. What I was told made me certain that a lease was the last thing I wanted to do. It's giving the company $22,000 to use their truck and at the end of the year you have renew the lease or make plans to buy it. I would rather buy my own truck and lease it to the company or find a good broker or try Getloaded.com.

Reading this post helped solidify that notion in my mind. I have a lot more research to do before making the leap and I'm not in a hurry because going into business is more than a notion.

Don't drive angry!

, but she started telling me that my payments would be tax deductible. Unbelivable. It's like a mortgage broker telling me that I would be paying 9% on a mortgage but that the payment is deductible.[/quote]

lease payments are tax deductible

Yep, lease payments are tax deductible. You dont get depriciation (sp?) though.

tootie

lease payments are tax deductible[/quote]

Yes I know that, but my point was she's telling me that I can make just about what a company driver makes without payments. And one of her answers to why shouldn't I just remain a company driver, was that the payments are tax deductible like that's supposed to make it better. She also said it again when I told her that if I wanted a truck I'd pay cash. Again with the tax deductible thing. Obvioulsy it's better to have no payments than a payment that is deductible

When hubby was driving for Arrow, we checked out Melton and when I went over to talk to them I asked for a copy of the lease and they would not let me have one to take home and read....that is a red flag. So we never contacted them for any more info.

Arrows lease, if you survive, will end up with you owning your truck and you can take the lease with you to look at and let an attorney look at. Arrows LP, for what it is worth was not a bad deal. BUT you are still better off to get your own truck.

tootie

Re: Leasing ain't for me
 

U knw if you just want to make $ in trucking, I would train there, I trained there roughly 6 years (started training after only 1 like you would) and made almout 2G a week there (not always of course but enough to widen my eyes at the paychecks), its set-up with the auto-shifts for trainers there to make big $ I believe more then any other company trainer program IMO, or is it just the company structure and discipline you want to get away from? being in their LP program, you would find out, they still OWN you under their LP program driver as much as being their trainers IMO.
Some guys didnt want to be their trainer cuz of the extra company scruitney, you had to kiss up even more then a normal driver, but IMO it WAS worth the extra $.

Re: Leasing ain't for me
 

pepe4158

U knw if you just want to make $ in trucking, I would train there, I trained there roughly 6 years (started training after only 1 like you would) and made almout 2G a week there (not always of course but enough to widen my eyes at the paychecks), its set-up with the auto-shifts for trainers there to make big $ I believe more then any other company trainer program IMO, or is it just the company structure and discipline you want to get away from? being in their LP program, you would find out, they still OWN you under their LP program driver as much as being their trainers IMO.
Some guys didnt want to be their trainer cuz of the extra company scruitney, you had to kiss up even more then a normal driver, but IMO it WAS worth the extra $.[/quote]


It's a good company for a new driver but one would definately have to move into other areas to make money. I don't want to be a trainer because I know I don't have the patience or tolerance for it. So thats out of the question. I need my space and privacy. But I appreciate the info on the subject. I talked to a couple of lease owners and they are too happy. Some are going broke, others are barely making it and so I'm going to stay clear of that. What did you mean by IMO?

IMO means "In MY Opinion"

I would make almost as much as a company driver

LOL-such a deal