Prime's lease deal. The math gets done.

Both some great points. For me it is kinda like purple scamming about lower taxes and limited government. Then turn around and want the government to control something or someone that helps them.

You enter a lease deal with a company because you want to make more money (many of the other reasons I hear are wrong). Yet get upset when others are making money off the risk of leasing to you.

And this explains a large portion ofwhy these programs are not in the best interests of many drivers. They have no business skills. They have no business getting into a lease like this. For me the issue with the company is when they have such a high failure rate with certain demographics of drivers, why do they keep leasing to them?

I don't buy all these people that put it on the company as the reason for failure. They are the ones that refused loads, took too much home time, got into a business they knew little about,ect.

But it is not san ethical business that makes money on the failure of a business partner as part of the plan. Because if they didn't make money on the failure then they would raise the standards for who the entered into business with.

BBB

 

I agree , but they don't raise the standards because it's profitable for them not to ..

It's their business model ...

 

I don't see how a "lease failure" becomes profitable. Yup, they do recover some capital from settling past-due accounts and payment for damage incurred to the equipment - but that's zero-sum. Once the lease is broken, there are no more payments rolling in to cover the cost of the equipment - Prime doesn't hold a contractor to be responsible for future payments on that lease once they've walked away - like many of the BFIs do.

So during the time the truck is being repaired, detailed, made ready for returning to the road, that cost goes back on Prime. They're loosing money in the deal. Also, the FM who was dispatching the failed contractor incurs a fine against his income for "loosing" a lease holder, plus the loss of income - their renumeration is a small base plus commission made on the success of the lease-holder.

I really don't think that loosing income on an idled asset is part of "their business model." Doesn't sound like a winning plan to me.

Prime does provide a really basic business class to their lease-ops - that is completely optional to the contractor - which it probably has to be in order to maintain independence from the company. I will agree that I don't think that enough is done in terms of formal education. Its an informal arrangement based on the trainer (if one is necessary) after orientation and the lease-board FM to get the new contractor up to speed. And a lot of that is going to be due to the "luck of the draw" so-to-speak. So, yeah, I think it would behoove everyone if the new contractor received more formal instruction in trucking business-related topics.

Here's a telling statistic... from what I'm hearing, many lease-ops don't bother going over their weekly settlements. How can you run a business, let alone know where your money is going or whether you're even making money if you don't at least spend some time with your settlement? That's not Prime's responsibility - it the individual responsibility taken on by the contractor when he decides to be a business-owner.

 

Mr. Pony: You have posted enough responses with enough information for a book. Lease Op: A Driver's Point of View. So when's the book coming out? (I kid)

 

Dude... I run way too hard for that. I'd need to retire to find the time, and I don't have the time for that - at least according to Ms Elogs...

"You are out of Hours of Service..."

Dangit!

 

Baby steps, Pony. Hell, a page a month is attainable.

 

First, I apologize for the typo's, doing these on smart phone and doesn't always get the word I intended.

You are wrong about the Prime lease in general. I have reviewed three different leases from different time periods and they all charged back for payments whole truck was reconditioned plus reconditioning costs. And those cost arefour to five times real costs. And with the exception of the past couple of years, those trucks sat no more than a week.

As far as the inside people getting hit for loosing a lease driver, they are not the ones putting these programs together. They have incentives to keep drivers on. I don't think anyone is saying they make more money when someone fails but they are not losing money.

If they lost money, thecompany not the people doing daily tasks, then they world change who they lease to. When 1 out of 7 drivers lasts a year, you can't tell new they are loosing money on the failures.

BBB

 

Well... I have one, read it, signed it - and it says that the payments end when you turn the truck in.

BTW... the costs are based on an accellerated payment schedule, and don't appear out of line to me based on that schedule.

 

Pony , I agree with some points you make but here's where I don't

1. Prime will make money off a broken lease ... The truck escrow is just 1 way there is no way they give it back to a lease driver whom breaks contract

2. Other charges :
Such as recovery , clean up etc they will find a way to keep the drivers last settlement or 2 for sure

3. With the amount of folks prime heards into orientation I'm almost certain unless the recovered or turned in truck had body damage that it will be in another drivers hands outside of 2 weeks 3 tops

Prime will make money by the resale of that unit no matter how u slice it .. If they didn't they would be a
NOT for PROFIT company .. And we all know they are not .

Prime has the cost of this lease rolled into their business model to make it so . I would venture to say there is at least a 20% mark up on the truck if not more ... If I remember correctly you posted your payments or another driver did which stated the truck would cost somewhere around
$ 156,000 - $166,000 for a truck that you can buy off the lot for bout 99-102 tops brand new

Trust me sir ... They make money

 

Lastly ....

Anyone whom thinks one of these lease companies such as Prime ( not only Prime ) there are other companies out there too.

If you think they are in it to see you succeed ..!!!

Well I have some OCEAN FRONT PROPERTY here near Memphis I'd love to sell ... From my front porch you can SEE the SEA ....!!!

If you'd BUY THAT I'd throw the FLEACE ( truck ) in FREE !!!

Trust me when I say .... Get the real numbers on the success rate then see for yourself .

Pony ... You seem like a pretty well rounded LP driver ... But take your numbers from Prime ... As a LP ... Then go buy a truck at 30-40 even 60 k which is allot of truck right now in this market

I promise you .... That you will see a increase of at least 20-30% profits .... Almost guaranteed