Need advice on leasing a semi truck.

Leasing is a possibility of making more money. For a trucking company, when a driver/lease-op is paying the bills, you may or may not get enough miles to make more money. For the trucking company trucks they own they have reason to keep them rolling because the company owes payments no matter what. For the leas-op trucks the company has less reason to maximize miles for them. Whether the lease-op trucks roll or not, the company is not paying for that truck. So in a slow period the company has a reason to push miles onto company trucks and take miles off the lease trucks.

You are obligated to the truck leasing company to pay. For you, miles are possible, but not required. You also have all the maintenance costs. You may make more money, or not, but your costs could be a lot more.

 

In my opinion, I don't really think there is more take home money in leasing a truck. It appears that way because you'll get paid 4 thousand per week...that's an example. By the time all your fixed costs come out, you're most likely not coming out any better than a company driver that's working at a company with good freight. If you have capital, then I think you pose a greater chance to last long term in an owner operator mode. I think the bigger advantage of leasing/owner op is the freedom to run where you want, and how you want.

Now all that being said if it were me, I'd probably lease a truck with Ryder or Penske. I worked with company that leased with them in the past. You'll cut out a lot of maintenance cost, because of all they can do at the facilities around the country. You would be golden as long as you don't tear up the truck and they can place blame on you for a damage. Then they'll charge the absolute hell out of you after a repair is done.

 

This is EXACTLY what that (company which shall remain nameless) did while I worked for them. From working in the fleet road service department, I could also see what the repairs and maintenance were for these trucks before fools...er...drivers were suckered into leasing them. It seems they ONLY offered those which were 'maintenance problems', or those which had the most delayed maintenance during the lean times a few years earlier.

Also, they pushed these crappy deals onto the 'problem drivers'; that is those who would likely be let go within the next few months due to, well....a whole number of reasons. Most of these guys lasted maybe 6 months, a few only 2 or 3, and 1 lasted an entire year. Then, the company got the truck back, to entice another sucker....errr.....driver. In the end, the ONLY party to get ahead in this deal was the company.

So, take your chances. I've heard of a few people who managed to make a go of it, but I've never actually met somebody who did.

 

I wonder if leasing a truck is better than buying for taxes sake. Wouldn’t the whole payment be a tax deduction? Don’t mean to derail the thread just curious

 

Here’s an idea. Get a bit more experience and find a good private fleet. Make more money and have more time off and not be married and going broke in a truck fleese.

 

Yes, I'm pretty sure you are correct. For tax purposes the best outcome with a Lease is you spend more on the lease, maintenance, and other expenses than you earn as revenue and get a refund. Of course that's considering only taxes. The purpose of the exercise is net income.

 

I’ve been thinking about leases quite a bit lately and the conclusion I’ve come to is that it’s mostly a bad idea. There are some pros and some cons, but to me the risk to reward is no where near anything that makes sense.

The only thing I could find that would make sense to me is that if you’re a gambler and you want to gamble on having no breakdowns for a year and then walking away from a walk away lease before you have any maintenance payments. Possibly in that situation you could outperform. Otherwise you’ll just be spinning your wheels. Definitely don’t even think about trying to buy the truck. Put 150,000 miles on it as fast as possible, and throw it away. These modern trucks aren’t built to last.

There’s almost no scenario where it makes sense financially to try to earn a truck by paying it through a lease that companies offer today. If you’re running that truck the way it needs to be run for about five years. You’re going to put five or 600,000 miles on the truck. Truck will not be worth much more than 30,000 and that’s if your lucky.

However, The amount of risk you’re taking on day one by leasing a truck is enormous. One accident can easily bankrupt you. It honestly makes no sense. Rates would have to be almost double what they are now for it to make any sort of sense from a strictly financial risk reward perspective.

just my opinion and I’ve never leased but I’m not willing to take that gamble

 

Glad to hear that from you. Many new entrants to this industry get lured in by the lease path as it has a very low barrier to enter. I’ve never drawn a paycheck since 1987 from a company where I wasn’t driving loading or managing trucks. In all that time I’ve looked several times at becoming an owner operator ( never once considered lease purchase) and there are times that the math looked like I could make it work but once I got to that point and factored in the risk part of it, it never made sense. So you nailed it . It is a gamble/risk. Kudos to those that have made it work but it’s definitely not for the faint of heart.

 

2007, was working in northern Alberta, making killer money. My biggest issue with the company was that they would detune the trucks from 455HP to 350HP. You should not detune a truck more than 10 from factory specs. Trucks broke down all the time because of the regen not working properly with the ECM tune. And they removed the splitter of the 13 to convert it to a 9 speed. When I tell you guys not to buy old mega fleet trucks, it’s because the mega beancounters do really stupid things to trucks.

Had an engine go on a brand new truck at 119k. Engine was rebuilt and ECM reset to factory settings. As soon as my company got the truck back to the shop they detune again. Then they want to talk to me about leasing. You want me to pay for that POS???

The big difference between being the company schmuck and a lease operator is when the truck breaks down, they paid me $120/day+motel. The money is the same when you’re running. Lease operators are company schmucks who pay to be company schmucks.