Starport is hooked up with four companies and if you do a lease with them, you have to pull freight for one of those four for the term of the lease. There are a couple of reasons for this. Those four companies are willing to payroll deduct your lease payments so Starport is assured to get your payment. Two is that they always know where the truck is, so if you're not getting any miles and there's no money to make your lease payment, they don't have to go to alot of trouble to yank the truck back. They have a nice little niche business. Where else can you lease purchase a 379 or a 900L with a $1 buyout? I'm not saying it's a good deal but they do provide a service. Of course it's set up to benefit them. They're not in business to give charity to drivers that want a long nose truck. And I've heard that they'll yank that truck for the smallest of reasons. Sorta like a "buy here, pay here" used car lot. They buy $1000 cars at auction, and finance them for $1000 down, $100 per week with poor credit. The first week you miss, they come and get it. And sell it again. They may make $10,000 on that $1000 car before someone finally pays it off and they can't go get it again.
I've read plenty of posts from so-called "experts" who bash every driver entertaining the idea of a lease purchase. "Why would you make those high payments weekly when you can go buy a truck yourself for a third of that amount?" DUH! No one would enter in to a lease purchase if they could buy a truck themselves. That's sort of the point. Nothing ventured, nothing gained, I say. And I speak from experience. I owned three OTR flatbed tractors for ten years and went bankrupt. I was too young and too inexperienced. After a few years of driving local I wanted to get back in to ownership but my credit was still jacked up from the BR. A lease purchase was my only option. I went to Prime and entered into a three year lease purchase. Beware, because Prime has no "lease purchase", they only have a "lease". They don't even talk about the buyout at end of term. You do get a "lease completion bonus", but they attack that bonus fervently. You may get $7500 where it should have been $15000 but they eat it away in "mileage overages" and such. That said, it was one of few options available to me if I wanted to get back to ownership of my own truck. I was with Prime for 6 1/2 years and two complete leases. I pulled two "end of lease bonus'", banked the first one and once I completed the second lease, I took my money and was able to make a down payment and get financed on my own truck. I pull flatbeds so I lease the trailer, which isn't too bad of a deal. I'm making plenty of money now but I had to work my self into the ground to make it happen.
A note on lease purchases. At Prime, as with most other companies that offer lease purchase, there IS money to be made. BUT, only if you're willing to run run run. The loads were always there for flatbeds but whenever I took a couple of days off at home, which was about once a month, it took me two weeks to recover financially. My "lease payment", insurance, heavy tax, etc, was $1069 per week. Yes, it is astronomical, but I grossed $4500 to $6000 every week of which I got 72%, minus the payment, fuel and any advances. As long as I ran 600 miles a day for 7 days each week, I made $1400 to $1700 per week. I had great weeks where I made $2500 but I had just as many where I made $300. It makes a difference when you make the Tuesday paperwork cut off or not. A lease purchase can work but you can't let up. Not for a minute. I have a couple of friends who still do lease purchases with different companies. All companies programs are similar. One of my friends runs all the time and only goes home for holidays. He makes a good living but he's never home. My other friend runs hard for four weeks and then takes a week off at home. He has his company hold back $250 per week into his company "emergency fund" so that when he takes his week off, his lease payment is covered. He averages about $800 per week, taking in to account his off week, but it works for him. Most people who couldn't make a lease purchase work, just weren't willing to work work work and be smart smart smart with expenses, fuel, etc. So many people complain that ALL lease purchases are bad. Not true. Yes, you're paying for the truck for the company but you're getting the benefits of an owner operator. If you're in business for yourself you can't be lazy and you can't be stupid. Trucking companies don't have lease programs to take advantage of drivers. The program would never last. And the company would never last. It is NOT in a company's best interest to have high driver turn over. If you're just a steering wheel holder, a lease may not be right for you. But for every person that says they were "fleeced" I can show you a person that makes a great living doing a lease because they run. You can't be a truck stop junkie and make a lease work for you.
A lease purchase has one other HUGE benefit. There is no such thing as forced dispatch (supposedly), IF you get the right dispatcher/traffic manager. My friend that takes off one week out of every five has a great dispatcher. But beware! Just because a lease driver knows there's no forced dispatch, that doesn't mean you're getting your pick of loads. Dispatchers/traffic managers know how to work drivers. Example: I was outside LA unloading and wanted to get back home to west TN. When I was empty, I sent my Qualcomm "empty" macro. I followed that with a phone call to dispatch and told them to find me something going by the house. 30 minutes later I got a load offer across the QC going from LA to Virginia Beach. I-40 almost the whole way and within 5 miles of my house. Perfect, right? Not so much. I checked the delivery time and date and it was four days and 16 hours from then. In a 62 MPH truck, aggressive planning means 600 miles per day. The run was 2800 miles. I had my wife meet me for dinner when I went thru TN. That was painful. But I had no choice because, according to dispatch, "that's all they had for a load going east." So, be advised if you are looking to lease. There is ALWAYS forced dispatch. The only difference is that if you're a lease driver, they can't fire you for refusing the load. But they'll punish you and let you sit for a day or two.
Just my thoughts and experience. I have many more but I digress...
Starport Transportation (leaseing)
Discussion in 'Ask An Owner Operator' started by crosswind, Feb 17, 2009.
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