For all of you that have read my very few previous threads(like 3 now I think), you can see that I just started with prime inc back in october. I am a newbie looking to get out from the restrictions of being a company driver and to make more money. I like to run hard and willing to do what it takes to make my own business successful. Here is what I am looking at: I have been concidering a lease purchase through prime, the only thing that bothers me is the price of leasing one of their trucks(from $650-$750 per week) That is over $2300 a month!! The funny thing is there are people out there that have never even made that kind of money a month, myself included. I firmly believe this is what scares most people away form it. My question is to all the drivers that own their own trucks, besides purchasing and making the monthly payments on a new or used rig, what are all the other fees and expenses?? license ...registration.... what all is needed and what is the average cost??.... Does anyone see any benefits by letting prime take care of all the legal jargan and paying that much for a lease. what do you guys on average spend every month to operate your trucks(minus fuel and mechanical issues) Thanks in advance to all that respond to this post....
lease vs. buying outright... what does it cost??
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It has been said here time and time again, DO NOT LEASE for any reason. You said the payments are 2,300.00 a month and yet you know of nobody yourself included that makes that kinda money, well what makes ya think you will make that if you sign a lease?
I think there is a huge post on here from TurboTrucker about the facts and figures of a lease and why not to do it, I try to look it up here shortly and post a link to it for you. His explaination is VERY good.
Well thats interesting because I have a friend that is leasing a Stevens Kenworth T2000 for $615 a week and he is making a killing. So far him and his girl friend are bringing in $2600 a week clean money after all costs on the truck, fuel, maintanence and insurance. That is running 5000 miles a week. Also, after 125,000 miles he will get a new truck and continue the same lease payment. To me, it seems to be great. He has been doing this for 4 months now and he has to turn down jobs because they want his team to run more then 6500 miles a week. Anyways, this is why I want to get into the leasing deal.
well you are talking about a team here which really is the only way to make one of those leases work good. Plus it's a team of bf/gf which keeps all the money in the same house which helps even more so you have to compare apples to apples. Plus that kenworth is one of the most fuel efficient trucks out which also helps. I'm actually looking at them right now myself trying to decide if I want to get back intoowner operator status or stay a company driver
Lease/puchase is nothing more than being a slave to the company. What happens if you aren't getting the miles they promised? You can owe the company money if you don't get enough money to cover the truck payment, insurance, taxes, tolls, fuel, accounting fee, maintance fee, and on and on and on. I've read several post about drivers not being able to eat, because they aren't getting enough money to make all of their payments. Instead of a pay check, you get a statement with a negative balance. The next week you start in the hole and can't make money until you run enough miles to catch it all up. The company takes their money first. You are second. You can't up and quit. You have to make that truck payment and you can't take it with you to a new company, because its the property of the company you leased it from.
Just be a company driver and don't lose your shirt. If the company screws you, than you quit and move on without a truck to worry about.
Talk to Penske or Ryder.
They will lease you a new tractor for 1250/month (+-) and for 6 CPM do all the maintenance. All.
In addition - at least with Ryder - you get fuel at a discount and use of their shower and parking facilities.
I'm a company driver, with no plans to be an O/O. But I drive a Penske maintained truck and really like what they do. I am close to retirement age and have lots of experience in business.
If you lease, do real leasing, not company offered leasing. Rely on your own credit, and do it between you and the bank. Leasing is good for many reasons, Unlike buying, you just need the payment to get your vehicle, if you buy, you need the vehicles entire amount or a large down payment,your first payment can imediately be used as a tax right off and every payment after, if you buy you have to allow it to depriciate over 7 years, and after your contract, you can lease another tractor, if you outright buy, you are stuck with it and its problems even after the warranty expires. If you do buy a tractor, have some mechanical knowledge and make sure you have a 1yr. or 2 to be sure you enjoy trucking and also just to get more experience. Then when you own your truck/business, you can pick the loads from which ever company, and find the loads that pay 1.10+ per mile, company leasing sounds good, cuz of the shiny truck and its all yours, but when you get not so good pay, with no miles, and the bills start stacking up, its just not worth it.
Also we are relatively close in age, if your like me and single not married...then expect the government to automatically take out 28% of your paycheck so you can feed the welfare types, then you take out your payments/ insurance/ maintenance cost/ fuel/ oil/ ....whatever else. 650/wk in payments = 31,200/yr. so let say you make that 100k, take out tax first; -28% = 72k- 31,200= $40,800; now take away your additional cost, fuel, oil, maintenance, insurance if not included on payment.scatruck Thanks this.
Let me add something here that might shed a little bit of light on the potential differences between leasing and outright purchase. I'm a long time reader of the "truck paper" swap sheet with trucks for sale, getting a fresh copy each week and marking it up with my highlighter. Since there are no blue books that cover trucks because of the myriad ways they can be equipped, studying the Truck Trader is the next best way to acquanit yourself with what the values of a truck are and figure out which dealers are on the level and who is a crook.
There are some ads that run frequently for used Schneider equipment in the paper. And while they don't fit my needs as a driver, I have been to Green Bay and stopped in to take a look at what condition their used equipment is in. And I found it to be a little bit on the plain jane side, but nice enough trucks to be a decent machine for someone who wants to pull a van. They frequently offer some late model IH's 9400's in their ads, and they run two separate ads featuring the same trucks. In one ad, they offer to sell the truck outright for cash, and the asking price is 25,900 to 29,900 depending on specific mileage. And that is a fairly decent price on a decent machine, with plenty of miles left on it and one that has been given pretty reasonable care.
In the other ad, they show the exact same trucks for sale, but in this case they offer a lease on the truck instead of an outright buy. And the asking price for the truck in the lease purchase deal is 20,000 dollars higher! $45,900 to 49,900 depending on the miles on the truck.
So, just to get into a truck under a lease purchase, in addition to whatever the monthly payments are going to be, the basic truck is being valued at about 180% of the current market value of the truck. Of course, since in this case they are acting as a financial holder for your "loan" and the guarantor of the financial aspects of the deal, they have a right to set a higher financial price on their machine to recover those costs. But in this case, if you can come up with the 25k of cash, or set up normal financing, you can buy the same machine for around 20,000 dollars less.
And I am not knocking Schneider here in any way. They are applying the rules of the game and probably putting someone in a truck who is a higher financial risk and couldn't come up with the 25k, much less the operating money to run his business. But this is a grand example of how much of a difference there is in a lease truck and an outright purchase. Pick up a copy of the paper and look for the two ads. They run every week.
Burky there is a "black book" for trucks. Do a google search, if you can't find it I'll see if I can dig thru my stack of saved links and find it for you.
As for leasing or buying I would buy outright so you own the truck so you can go to another company if things don't work out. Once you have your own truck then lease to some body like Landstar or similar.
Just keep in mind that freight is really slow right now, but it might pick up more later this year.
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