The WORST Lease Purchase Agreement I've Ever Seen

Hi Turbo,

Is this information still valid as of today as far as Swift lease/purchase plan that they are still offering. I had a converstation with a instructor in my CDL school that is pushing the Swift's lease plan big time. I just wanted to get some discussion points to through back at him. I tend to beleive what you say that these plans stink.

Thanks,

Marty

 

Good post Turbotrucker. For your efforts, you are hereby promoted to Executive Administrative Assistant! Thanks for the health.

 

Sorry to bring this back from the dead.

Transam trucking has a similar deal, LEASE
Pay $ 585 a week for 2007 Kenworth T-600 automatic 10 speed.


Only make $.81 cents a mile. EZ pass are paid by transam. All other permits/taxes/fuel/Insurance/health insurance are paid by you. Lumpers are paid by transam.

 

Yeah I do the older truck bought with cash thing myself. $5,000 can buy you a pretty decent truck if you are smart and shop around. Then you can fix it as you make money. I like the one easy payment. I think altogether I have about $6,500 maybe $7,000 into mine and that is including a new fifthwheel 2 new slack adjusters rear brake shoes and 1 new drum, and what it cost me in changing fluids, grease, etc. It's a little older but I bought it from the first owner (who was a heating oil company) It only had 255,000 miles on it. It was only apportioned in 2 states. And I know the guys that work at the shop it went to for service since it was new.

The thing is when you own the truck with a free and clear title you can be picky about choosing your loads. The whole point of being in the trucking business is to make money. Running hard is not always the way to make more. Lots of times the way to the biggest bottom line is to keep expenses low and pick and choose your freight.

 

Boy you guy's are going to get me stirred up, Lease Purchase is the absolute worst thing in trucking. Well for the driver the companies love them.
Understand why they exsist in the first place,and you will understand why you as a driver will NEVER make it as a lease operator.
The Carrier's are in business to make a profit obiviously a no brainer.So to compete with Broker's that cut rate's to steal frieght, because there overhead is alot less then a Carrrier's, they came up with a solution
The Lease purchase.
You have to look at it from a business standpoint, a truck is a big hole in the ground you throw money into. the varible cost of operating a truck is what will make you or break you. If you can elimanate them you have got it made. that's why most lease opportunity's are based on the Fixed Rate Basis.
Look at it this way;

Carrier has a customer that will pay a average of $2.00 per mile plus a FSC.We wiil assume that you get that at 100%.
The Carrier then leases a truck to you for $.95CPM loaded and MT,
Say average deadhead is 100 miles.
if the load is say 1000 miles this would be the outcome.

Carrier gets $2000.00 for the load pay's you the operator $950.00 loaded and $95.00 for MT miles and you would get the FSC based on 1000 loaded miles, it won't include the MT miles
So you haul this load your truck get's the industry standard average fuel mileage of 5.5 MPG. it wil cost you 200 gallons in fuel to haul this load.If
the fuel cost $2.599 per gallon you will spend $519.18 just in fuel!
You only earned $1045.00 plus a FSC maybe $.25 a mile to include another $250.00. So you total out at $1295.00 less fuel of $519.18 to give you a net of $775.82 for the trip. You say that's great I can live with that. But you got to pay for all your other exspense's,this trip burned up a third of your week based on a 3000 mile week, so it will cost a third of your exspense's for the week to run it. And how much is that? well it depends on your truck payment,insuance,taxes,maintence cost,escrow, QualCom fee's, fuel card fee's,and any other charges the Carrier want's to impose on you. It could consume another 30% to 40% of your trip,which is $232.75 to $310.33. And God forbid you blow a tire or break down on this trip. See all the risk is on you, if it cost money to haul this load and it does, YOU are paying.
So what about the Carrier they got $955.00 plus what they will sconder at the end of the week,you know that 30% to 40% of the exspenses.
The carrier know's whatever your truck haul's it is a Fixed cost to them
They pay you $95cpm and charge $2.00 per mile not a bad deal if your the carrier,but real bad if your the lease opporater.

My advice to those of you considering a lease opportunity, please don't sign on with any company that pay's a fixed rate,and if possible don't lease their truck. Even with poor credit you can get a truck outside of a company. And control your exspense's Buy your own base plate, insuance,etc. It is very important for you to do this it's your truck make sure your name is on the registration! not the companies.
You are the business owner will then own the the business, you must control what you can. Do the reseach,save some money,perferrably about $10,000 in the bank. if this too much for you stay a company driver a couple more years untill your ready. Don't jump into something you are just going to fail at. Trust me I know I have been there done that and have the T-Shirt.

 

Great Thread!

A couple of questions -- Swift and Prime and whoever else got sued by their O/O because the earlier leases said they would be paid for their miles, interpreted to mean if they drove 100 miles they were to be paid 100 (real) miles not in Swift miles (110+). Did those lawsuits ever settle and if so, what was the outcome. My mentor stood to make about 60k if it got settled to the benefit of the O/O.

Secondly, I started a thread with this question but nobody responded to it yet. I see ads for O/O's that say they have a choice of a defined rate of cpm, or the can get % of the load. Which scenario is the best?

 

If any of you drivers insist on lease purchasing,check into fedex custom criticle straight trucking,air ride,big cabs and sleepers,alot cheaper to buy,run and fuel costs,good money per mile,automatics if you want to team with your wife,class 2 cdl,The folks I have talked to doing this deal say its not a bad deal. I don't know of all the details on it but I believe it is worth cheaking it out.

 

a friend of mine pulls for Quality Carriers. One of their o/o was in poor health and wanted to sell the truck he was buying on a lease. He had paid the truck down to $26,000 and said he would sell it for that or allow my friend to take over the lease. Not so quick. The company would not allow anyone to take over the lease but would do a new lease for my friend at fair market value. ok so now a truck that was paid down to $26, they now want $43,000. at least the could give you a freejar of vasoline.

 

I know more lease/owners more successful then not (West Coast) bringing home more then company drivers, running the same lanes and freight... 2 drivers, 1 company truck and 1 lease truck, pickup the same place and deliver same place, and run the same amount of miles a week... I noticed some posts here stating 81 cents per mile, thats crazy for an O/O. Also someone calculated 150 dollars for groceries a week, thats crazy. That tells me that he wouldnt make good business sense spending money like that a week for food. That explains why his lease deal would never work. I guess if you have a family with children and need medical insurance plus the need to take time off for any unexpected illness, then company driver would be best, otherwise why not earn more money for yourself? Who cares how much the company makes off the truck, what matters is what you earn at the end of the week! We have some drivers on there last year of lease and that truck is theres!!! No balloon payment, they can run the same truck and not have a truck payment no more. Or they can use the truck as a trade in at any truck dealer they want. ALL LEASES arent bad, I'm driving with these guys daily and its the opposite of what I read on this board. Have a good week and drive safe

 

Thanks Turbo Trucker as a new driver I will allways remebr this post