Best company for lease purchase

Are you just trying to think up things to argue about? Please reread my original post concerning cost.

"Currently FSC based on 5-6 MPG is around .40/mi. Most people would put other costs around 1.00-1.20 = 1.60/mi total cost. Essentially that is 100% markup."

If it costs you 1.40-1.60 per mile and you charge 3.00, how is that not "essentially" 100% markup. Feel free to sit around waiting on loads that pay great so you can run home empty. If that is what works for you knock yourself out. My point in posting here is that hauling a lower paying load is not always a bad move. Some of my most successful ind cont are the ones that judge whether or not a cheap load is worth their time. If you are running back the same way, and it is not a lot of work, why not put something on the truck to help pay for fuel. You are not just "making the company money," but are helping to cover your variable cost. It is easy to puff out your chest and say no cheap freight for me, but a true businessman evaluates each opportunity for its own merits. Too many people in this business fail too look at decisions as a business person. We could argue this all day, but I am fairly certain that we both have our minds made up?

 

Some advocate a different approach to revenue generation. I have heard a fella on the radio advocating a daily revenue target amount rather than a mileage rate.

As a company driver I shoot for $250.00 per day for each day I am on the road. If I were an owner op that figure would have to be around $700.00 per day to make it worthwhile.

One of the main reasons why I am a company driver today is the difficulty in maintaining profitable rates in the current economic environment. Basically we are in a race to the bottom.

 

I'm inclined to agree. Get experience. Learn the ins and outs of this lifestyle. At the same time educate yourself on the machinations of being self-employed. Run your company truck on a set of "as if I were really in business" accounting books based on what you learn about the lease deal and see where it leads at the end of a year.

I leased a truck from a company in 1997. Completed the lease successfully by way of the open-ended purchase clause of the lease/purchase contract. I sold the truck and parlayed it into a down payment on my own truck. You have to watch the lease wording if you look to do something similar. Many lease programs got wise to this loophole and closed it with a simple limitation only allowing after a specific length of time. A friend of mine got himself caught in that snare at the same company--but HE failed to read and fully UNDERSTAND the terms of the lease (read as bad business acumen). If you're looking to purchase during the lease (as opposed to simply leasing a truck) make absolutely sure that you have the open purchase option.

It's always advisable to buy an hour of a lawyer's time to read over the contract(s) and have them broken down point by point. In the end it's a very good investment. Your contract is the binding word on how you operate. I had instances of the carrier I leased from/to trying to enforce upon me their contractual obligations to customers regarding routing and unloading (both services and fees), not to mention their trying to run my truck without pay to handle their pallets. As a L/O and O/O my contracts both left routing to up to me--and most leases do.

Something else I recommend is an accountant with a knowledge of the transportation industry. Many bookkeepers, accountants, CPAs are trained in accounting in general but have not specialized in transportation. Much like a transportation lawyer, their specialized knowledge is valuable in that they can point you in directions of deductions common in trucking but not so much so in other businesses. Additionally the reports they will generate for you will be your atlas to planning your business moves: ie "do I continue to lease or purchase," etc. Those reports will also tell you if you're swimming, treading water, or if it's time to man the life boats. This is what happened in my case in the fuel price spike of 2000. Fuel suddenly went from around $1.04/gal on my typical routes to more than $2-$3 a gallon with NO fuel surcharge. My reports indicated it was time to move and quick or face a sinking Titanic with a plastic pail full of holes to bail water. I sold my truck off and went back to driving company. While I miss my truck and the independence I didn't lose everything and didn't have to face a repo or bankruptcy.

Something else I didn't see anyone mention in this discussion is the rate most lease operations pay. In '97, '98, '99, i was pulling between $0.90 and $0.93 cpm to the truck. While it varies by carrier I'm gathering that most O/Os under operational lease to most big name carriers are doing about $0.92 + FSC. Interesting how that was 12 years ago or more and the numbers are not much different except for the FSC. Think of those rates this way: I've personally seen a 100 mile load that paid me around $72 for my 20% (and my points do not include the FSC, that all goes to the carrier) which works out to $360 paid on the load or $3.60 per mile. If you're under a mileage contract at $0.92 your carrier just earned $2.68 cpm off your truck for a few phone calls, a fax or two, and you paid the bills.

I'll summate myself this way: It's my understanding that many guys come out here and see these big shiny trucks and dream--which is a great thing to have that freedom. But the bottom line is trucking is a business. There are some who sink and some who swim. It all comes down to taking the time to get to know the industry, getting yourself educated on the ins and outs of trucking, learning some mechanical skills to save dollars and pennies, develop a head for business, establish a plan, and like any small business owner really enjoy your work because as the owner you will be taking it home with you every time you go there. There are lease programs that work and some that are rigged to fail. Do truckloads of homework and don't be afraid to get your hands dirty. You'll need that ability the first time you blow a radiator hose at 3am on a lonely stretch of highway 5 miles from a truckstop in 25 degree weather (and yes I've actually done this and trust me I cursed every step of that 10 mile hike).

First learn to stand... Then learn to fly. Then learn to soar! Most of all good luck!

 

Wrong,I do not like to argue.Your trucks seem to only run certain lanes so what works for them,wouldn't work for us.We never run home empty.If your ind,cont.are doing good I'm happy for them,I like to see everyone in trucking make a good living.They are mostly hard working,and deserve a fair wage.Was not puffing chest out or bragging,just stating that if we're not going to end up with a good paycheck,we're not going to make the company one.

 

Its pretty hard to put a pay per mile on this situation.Years ago I was leasedcto the old MS Carriers.They licensed my truck,paid the insurance,paid for all tolls,and scales,which amounts to quite a bit of money over a years time.If I remember correctly I was paid.80 cents per mile loaded or MT.But that was back in the 90s,So along with the pay per mile look at the otherthings involved

 

Agreed !

 

I had one sweet deal on a lease purchase years ago about 20, with Fleet transport pulling tanker. The deal was no matter if the truck made enough to cover expenses and payments you still got 20% of the gross. If the truck made money after all payments and expenses you got it all. When the truck was paid off it was yours.

 

At Sammons it's 26% to you 74% to the truck after all the expenses come from the 74% and fuels surcharge. What ever is left over goes to the truck payment. When you get to $0 you get the title.

 

sammonsrecruiter,

How long does it take to get a truck paid off?? What are the truck payments and where are they sourced from??

KH

 

The amount of time depends on the cost of the truck when you get in it and you. There are no set truck payments. The way it works is you and the truck get 75% of the line haul and 100% of the fuel surcharge, tarps, stops, detention, etc. Of the money that goes to you and the truck 26% goes to you and 74% and all the fuel surcharge goes to the truck. At the end of the month add up all the expenses ( fuel, maintenance, bobtail insurance, trailer rent, plates, physical damage insurance, occupation accident insurance, fuel taxes, federal highway use tax, anything else you come up with plus 12% interest on the balance owed on the truck) and subtract them from the 74% and fuel and what is left over is what you made for a truck payment. When the balance gets to zero we give you the title.

You choose your loads, you choose where you go and how you run. Home time is up to you. As long as you are making progress paying down the truck running safe and legal you'll do just fine.

We need securement and over the road experience but will look at you as a whole person when reviewing your application.

Give recruiting a call (800-457-2349) and they can get you more info or just post your questions and I'll try
and answer them.