Lease/Purchase Tips

here is a tip, and you said it yourself ... you have heard others say don't do it.... If you are a new driver... Don't fkn do it...... trust me the adventure, and the fun of driving will be very short lived when your driving 10 hours a day...... put in your time... if you last a year then think about doing it.

 

I'll add these two:

1) Wait at least a year after you enter the industry before you even contemplate making the switch from company to lease or O/o. It will take you that long just to get a good idea if you can handle the job going forward for 3-5 years or more as you pay off your truck.

2) When you are a company driver you are someone who's responsibility is to operate a truck. When you lease or own, you are someone who's responsibility it is to operate a business that happens to involve a truck. If you don't understand the difference you have no business being anything but a company driver.

Good luck,

Jim

 

Get some business education before you start.

lf you can run company-side with the carrier you are going to do this with, so much the better. It will allow you to run the numbers for a lease option before you jump in.

Check your settlements every week to ensure that there isn't a mistake.

Even if you use a CPA, do your own book keeping so that YOU know what is going on with your business.

 

One can misinterpret the thread, but it's a good idea. Get experience as trucker before even considering leasing. You have to keep the horse in front of the cart.

The best advice I can give is read the contract inside and out very carefully. Many drivers are rushed to sign and don't even know what they are signing. Many companies will twist words and use legal jargon you don't understand. Make sure you know what you are signing. Let the person that is trying to rush you to sign get mad if they want. It's your money, not theirs.

#3 Dave, a truck is designed to run at maximum weight. The more weight on the drives, the less hop you will have, the more momentum you will have, the better ride you will have. Anything behind the drives is considered pulling weight.

 

Great thread man!

Also Ironpony, very, very good idea! I couldn't stress enough how important it is to get some business background first! Hell you can do this while driving! There are lots of courses that you can take on the internet and also material on cd that you can listen to. OOIDA offers a lot of good training materials and or links on their site.

I personally recommend 2-3 years out there before you jump in. Your first year is going to be learning the ropes and the lifestyle. From there as a company driver you can practice being an owner op while driving. Just do everything you would as an owner op but your a company driver. Keep track of everything you do and see how you would make out. Also, practice refining your driving. A good seasoned, refined driver is going to save a ton in fuel, brakes and tires. Not to mention other mechanical parts. Most of your money though is going to come from your fuel. So the name of the game is the less you burn the more you earn! See those owner ops doing 55mph you think they like to just drive slow? Nope, you would be amazed how much more money you make driving 55 then 65!

Now a major factor of whether you succeed or not is going to be home time. If you are serious about your career then you will have to put time in the office. This requires not going home. Taking home time will always mess up three weeks of pay. Not to mention you still have to make that truck payment every week whether you are home or rollin. I have a lot of respect for solo owner operators! I was an owner operator but was a team with my wife and I have to say that even teaming it was tough! Props to the single guys, you are hardcore! My wife and I had a very successful time out there but we were hustling everyday and seldom came home!

Though I could go on forever about being an owner op the only other thing I would like to throw in that is very important is that you need to have a bank account with some money in there. Even though a lease requires no money down and blah, blah, blah. If you want to make it you need a stash of about $10,000-15,000 in there. Just an example, I leased a brand new t2000, drove from SLC,UT to Nb and the radiator split right down the seams! Did I mention this was a brand new truck? Took 6 weeks to get a part and fix, oh yeah after towing the truck to Denver, which came out of my pocket! Mind you still have to make the lease payment while the truck is broken down. Let's see that's $1000 a week truck payment times 6 weeks (6 weeks of not running freight!) is $6000! Tow truck bill was $2700.00! Now I probably could have just left the truck and terminated my lease but I would have had to pay the bill anyway and would then have bad credit, truck abandonment and lease termination on my record forever! Well truck was finally fixed ran another week and had to have all the injectors replaced due to a recall!

Long story long, make sure you have some back up flow!

Good thread guys!

 

Here is what I see a lease purchase can be summed up with this phrase:

ROPE-A-DOPE!!!

That is what you are getting as a lease purchase driver, you are getting to run a piece of equipment that the company can elbow you out of at any time simply by turning the flow of freight to your truck down to a trickle.

It is their preferred modus operandi because if you are a company driver, you can walk away and quit at any given moment, if you are a lease operator, you have a lot of money invested in that truck, and it is your butt on the line to pay the bills for the truck. Thus they are able to keep you under their iron fisted dispatch, and there is not much you can do about it.

If a guy wants his own truck, he can get there, it just takes time and planning. Good equipment can be had for around 20 grand, that is less than what a new pickup will cost you.

My take is if you can not raise that much cash, then you have no business trying to own and operate your own truck because you wont make it.

As well I am going to throw in my .02 on this, I will not even pull a company trailer. Why? because they charge you for it.

A trailer is a cheap piece of equipment to own, it has 8 tires, 4 sets of brakes, 4 sets of bearings, 4 air bags, some wire lights and air line. No huge cost involved there past the initial purchase. Why pay some one 8-15% to run their trailer?

I do understand there are advantages to being able to drop and hook, but there are just as many disadvantages, like not knowing the mechanical condition of the trailer you are going to pick up, then being stuck dealing with it and being responsible for it.

Personally I do not like being made late because I am sitting at the starting line unable to leave because some one decided to drop a trailer with out telling dispatch that it has a flat, or a brake camed over, or because the lights aren't working.

Also your company is not going to pay you to sit and wait while all of that gets fixed.

When you have your own equipment you get to schedule when you want to shut your equipment down for the most part, you get to keep it in good repair, and if the thing gets run into the ground it is your own fault for not staying on top of it.

Personally id rather be responsible for myself and get paid more.

 

Leasing is a good step between company and O/O. You are an O/O yet still have someone to fall back on. You do need to be careful and make sure you know what you are signing up for! As a single O.O it is going to be very, very tough to make those $1000 a week payments!