Prime, Inc. - Springfield, Mo.

prime says they are locked into these prices. i asked my fm, said nothing prime could do. which i think is bs myself. its a fixed price. they are making out like bandits on this. also. iron pony, leasing works only for prime and its otr trainers. like i said, i have a few friends i made while at prime. all their trucks turned in as well as mine because prime didnt have the freight to cover our fixed costs let alone fuel. you are ok on the co side.

 

Prime leases the tractors on a 3-year basis. The pricing structure on a leased vehicle works the same whether you're talking about a personal car or a CMV. Lease a car for three years and the lease payments are higher than for a 5-year lease; the payments are lower on the longer term, although you end up paying much more in the long run.

Making out like bandits? I don't think so. When you compare what a new tractor costs, financed at current rates (yeah... if you could get that loan,) there's not that much profit margin on a single vehicle. I'm not defending Prime on this, so don't get me wrong - but where does it say that a business has to be a social welfare organization so a person leasing a vehicle gets a heck of a break? While I don't know what kind of money Prime and Robert Low are making off of this, I'd venture to say that if he's putting out the capital to obtain these vehicles so that you might make some money running them, then he's entitled to some return on that capital - bandit or not. I think where most people go wrong with this is not treating it as a business deal, but thinking that leasing a truck to run freight is some kind of "supercharged" employee paycheck. It isn't. They loose, and get "fleeced" by their own shortsightedness.

And yeah, they do get locked into these numbers because they contract for a block of trucks at a time. Just because freight rates are down and the economy sucks, doesn't mean that Freightliner, International, Peterbilt or Kenworth can produce these vehicles for less money or sell a tractor at below what it cost to put them together. That's called deflation, and its something that none of us want - it happened in Germany during the Great Depression. People used to take a wheelbarrel full of cash down to the baker for a loaf of bread.

You're not telling me anything! Why do you think I'm tracking the numbers? I made the decision to stay company for a couple of years when I started this gig - first to learn the business, and second because I didn't believe a word coming out of the Bush administration about how "rosey" the economy was in late '07 and early '08 - looks like I was right about that part. Things just didn't add up to squat. IMO, despite all the negative comments that people make about Prime, the company driver gig here isn't a bad deal at all. I get treated well and paid reasonably - there's always room for improvement there!

As far as whether leasing works or not - in the good economy we had prior to the meltdown, yeah it worked fine. A solo operator watching his costs could make quite a bit more than a company driver. Not so now. Until rates return to what they were - and freight rates have come back some since the worst of it last year - a company driver will be making more, albeit not a lot more, than you could on the lease side. Its a lot more consistant on the company side, and that has made dealing with the financial disaster this country got in prior to late '08 a heck of a lot easier than if I was trying to be a small businessman in a tough industry.

Any way you look at it right now, the fixed costs of a leased vehicle doesn't compare at all to what you can do buying a used vehicle given the cirremt market. So there you have it... if you can possibly afford to buy a tractor and trailer, have enough to cover the rest of the startup costs and put some operating capital away, you're in biz at a much lower cost - of course with the more difficult task of finding your own freight. I think there's time yet though... probably still more underutilized trucks out there than can be served given freight volumes, and the economy is still sputtering but certainly not in free-fall like it was. But that tells you something about these lease deals too - it'll be very difficult to make them work for awhile as well unless you are doing it as some sort of team operation.

 

David, these days in times... you might prove me wrong but you can not get financing with bad credit.... with well over 10 million jobs lost here in the US and the Home foreclosure rates and lets not forget about the 700 billion dollar bailout to the banks and financial instutions and the also the bank that the feds closed and took completly over....
A leasing program ... like prime and others..... you never benifit from this... they do not report you account and payment history to the proper reporting companies.... its designed for those who can not obtain conventional financing.... with a very healthy price tag...

 

Most people go into a lease deal thinking that they cant get credit to buy a truck. There used to be an ad on tv in my area that said "When your bank says no, Champion says yes". The idea is that you get your mortgage through them as apposed to the bank. That ad was not aimed at people who were declined credit by a bank but rather people who were looking to get a mortgage in the first place and figured that maybe because they had bad credit that they should just call Champion Mortgage instead of a bank because they might get declined. It ad gives the impression that banks say no all of the time. The truth of the matter is that banks says yes most of the time concerning mortgages. Thats one of the reasons why the economy in such bad shape.

The economy is so bad now that many truck dealerships will go that extra mile and help get you a truck loan. OOIDA has a service that will get you in touch with several of these companies for loans.

 

David, you're getting confused ... when you buy a piece of property or a site built home that is in fact a Mortgage loan... that piece of property or home is not going anywhere... it cant move period.... unless you jack it up and put it on a truck....
A truck Loan is an Installment Loan... Now david... I out right own 2 trucks and trailers.... OK... i grew up in the trucking bus... with over 1.5 million loged miles under my butt and have never been a company driver...
In the Past 2 years the the trucking industries financial providers have been flooded with repo's and turn-in.... So now that the federal government has gotton involved with all the sub-prime lending company's ... these companies had to tighen up there lending guidelines... So now you have to be almost sqeeky clean to get financed... because the lending companies knows that you have bad credit already and with the cheaper freight rates that we now have across the board ... it may be just a matter of time before they have to repossess it....
As for as OOIDA... good luck ....

 

I will be at orientation on Jan 5.. looking forward to it.

 

YEAH, as far as i can see you never applied for a truck loan...i could see that u have 0-1 year of experience, right? Try to get financed using OOIDA help... i did, they ask to start talk with you a 700+ credit with solid big finance history like house or something like this and nothing less than 3 years as class A driver..., same for insurance...So good lucky getting finance. Lenders out of OOIDA, minimum of 2 yrs...

 

My cousin has been an O/O for over 30 years. The last new truck he went and bought the bank told him they would loan to him, but it was rare for them to do that. Too much risk, but they liked his track record. He told them well; if I don't know what I am doing by now I never will.

 

When was his last truck loan and how is he doing these days Notarp?

 

Last time I seen him was about a year ago.We met in a truck stop. He always had the best of trucks all decked out. Had about a half dozen of them. He had a plain jane old freight shaker and has went to just one truck. Said he was done with the headaches of having drivers. He told me he learned that the plainer trucks make the same as the top shelf trucks do. I think his last one is a 06 or a 07 maybe. Not sure. He also came off the road and runs pretty much local. He does venture a few states out from time to time.

He is doing good. His truck makes money when he is sitting and waiting to load or unload. He wants to get out of trucking, but it is all he knows. He is having a lot of problems with his wrist from holding the wheel all the time. He has always done well and was not a company driver very long before he bought (not leased) his first used truck. Then he started buying new ones.