Truck Leasing

There are several percentage leases out there right now that can make you 1.60 CPM or more on loaded and empty miles. These are leases with reputable companies that don't nickel and dime you to death.

If you want to run your own authority and you run wisely you can average about 2.00 CPM loaded and empty.

I'm just offering information. If someone wants to run for 1.30 - 1.40 CPM that is his or her business but there is much better out there. If people are more comfortable taking less because they know what the CPM is than tracking it load by load to get more, then so be it.

Sure you can make it at 1.30 CPM. You can just make it and never get ahead. Why do you think so many companies pay that? You can also read, about once a week, about someone that is broke with bald tires and no fuel money because of running like this. You will also run 25% more miles to make the same money as the owner running for 1.60 CPM.

Just because you can do something doesn't make it prudent. I challenge you to find me any other business and any businessman/woman that is willing to operate for cost and wages that are often less than what would be paid if he worked for someone else. And this businessman/woman is willing to stay open more hours than his competition to just break even.

Let me tell you something, you won't find businessmen who think like this. They all expect a return on investment and profit. Trucking is one of the few places you will find so many willing to work so hard for so little. IMHO, this is because they do not fully understand their cost of operation.

I invite you to look around and ask yourself, "Why are some so much more successful than others"? I'm sure everyone has heard the saying in real estate, "money isn't made when selling it is made when buying". Obviously you won't be in trucking long if you don't control your expenses. Still there is little difference in cost of operations. The real money in trucking is made when you select your load. There is no secret formula, it is about setting a profitable rate and sticking to it.

I've said it before and I'll say it again, "I challenge anyone who thinks they can run a truck in a lease operation for less than 1.38 CPM. I challenge anyone who thinks they can run a truck and trailer with their own authority for less than 1.78 CPM." My cost includes all the costs that everyone knows plus replacement, decent wages, benefits, taxes and return on investment and it is 1.78 CPM. I need 1.90 CPM or more average on loaded and empty miles to remain profitable.

When you operate like this everything is covered. You are compensated for your efforts and don't tire of the grind. The taxes are paid and there is money for replacement and repairs. In a bind the 0.12 CPM profit or 0.07 CPM return on investment can be used for something else without taking a cut in pay.

What I am trying to share with you is the difference between being a businessman/woman whose business is trucking and being a truck driver who owns a truck. I am in no way talking down to anybody. I have personally lost everything including my family while being the later. I am now the former and a much happier person.

I understand that it takes a lot of heart to do this because I went broke once not doing it. There is always another option besides hauling for cost. It is often not as obvious and always more frightening and more risky but it will pay off in the long run for you and our industry.

 

Who are these companies? I would like some information on them because that is where I need to be...

I have read just about every advertisement for these companies that offer lease/purchase deals and I want to believe the hype so bad, I want to believe that a large multi-million or billion dollar company really wants to help a driver make his dreams come true by becoming an O/O, giving him that opportunity. However in all actuality I know that is how most of them got to be that big time company by screwing people and praying on peoples dreams. I leased from Prime for 6 months in there Taker division, in 6 months I put $800 in my pocket.

 

They aren't lease purchases. I'm hard pushed to believe you will find many, if any, lease purchases that will support you and/or leave you with a tractor in the end. If this is what you are going to do, look for several things. I would want a $1 buyout at the end of the lease, a percentage pay and a lease that breaks the revenue between the driver and truck. I would need to speak with several successful operators and see their pay statements.

I can’t think of a single business that you can start with no cash and make anything out of it. These lease purchases are the only thing I know of that are around posing as a business you can own with no investment. Unfortunately it is too good to be true. I don’t have exact statistics but have seen some quoted. I believe the overall success rate is around 10 – 15%. This is probably real close to the success rate of bar and restaurant startups. And why do you think this is? It is because most are started without the capital to be successful just like many owner/operators try to do. IMHO, failure is first due to lack of capital and second due to a poor business agreement. The third factor is lack of business skills.

I have been in the job market for 38 years. I have worked many occupations, developed several careers, owned a couple of trucks and started several small businesses. I have always made some money off my businesses but never turned them into something big. They have always been supplemental to my job. I’ve always had the same problem; I started and operated them on a shoestring budget. You can never expand operating like this. Furthermore if you have a big investment in equipment, you will put yourself out of business operating this way. I did make a good living with the trucks but I made down payments and purchased them.

If you can save the money to make a down payment on a truck and have some operating capital, you can do well. Landstar, Sammons and CRST Malone have percentage leases that pay decent. JB Hunt’s Power Only program pays decent too. It requires you to have your own authority though. Many are doing well with the Schneider Choice program. All of these are percentage leases. I'm sure there are others too.

 

She said he started August 1 and the post was August 14 if I read correctly.

You are absolutely correct about the bigger companies having a bigger effect on the rates.

My point was as long as drivers are willing to enter into these one-sided lease/purchases for less than the cost of operation that is what the companies will pay.

My second point was when we quit taking these deals they will have to pay us more. When/if that happens, they will have to raise rates or take less for themselves. Which do you think they will do?

Now in light of this why do you think they thrive on filling their trucks with new uninformed drivers that haven't figured out this is nearly impossible to make work out?

 

You make a very good point from all angles.

When it comes to paying more to anyone you and I both know they do not want to do that and honestly I don't think we will see that day. If it were to come they would have to raise the rates in order to move the freight because you know they aren't going to take a cut in pay.

They prey on people, and flash there dreams in front of them to do nothing more than give them a royal ##@*#$* I was one that was blindsided by the big pretty truck and the hype so I know how bad it can really be. They do it just to make that almighty dollar.

 

Far as im concerned these companies are in bed with the govt. In order to keep freight cost down companies have to unload the debt. no debt banks give you loans. Thats where lease comes in. The cheaper companies get the freight the more govt makes on the inflated cost of buying goods.Companies use to say we cant afford to pay .36mi. They can now because of all the lease programs. And they still dont pay. Because if they gave a company driver .40mi. Drivers on there lease would walk away go back to company. Instead companies are paying less per mile now forcing drivers to starve or consider lease. Now they got you where they want you.Bottom line they want you to assume the risk. This keeps companies in business during the downturn in economy. Govt wins companys win . Driver takes the risk. thats TRUCKING

 

I paid off 2 trucks thru lease purchase then took them elsewhere...Don't believe all the BS about lease purchases being bad...If you are a descent driver you will pay the truck off..You can pay the truck off early & take it with you if you have the cash or stay where U are at & run fewer miles ....You are responsible for maintenance & repairs,your taxes ect ect ect & there are a lot of headaches to being an owner operator but some guys wouldnt have it any other way just depends on the driver....If you cant save for a rainy day & have sh!tty credit then it would be best to be a Company driver...Good luck whatever you decide..