to lease and not to lease...

So what?

















Let's look at it from another perspective. Let's take the guy who leases a 1 ton pickup, finances or leases a welding machine to mount on the back along with oxygen and acetylene bottles, welding leads, torch and hoses, and goes out to hustle up work. So he finds this dairy farmer who needs some pipe fencing put up. Welder goes out and buys the pipe and welds it all together and charges 10% over his expenses-- fuel for the welding machine and truck- gases for the oxy/acetylene, pipe and steel. You guys are saying 16% is a bad deal??

What about the sandwich shop owner? Has to buy the bread, meats and cheese etc, pay the lights and ovens, workers, and hopes to sell enough to cover the overhead.

To those who don't like the lease op deal-- thank you for your input, now go MYOB.

 

personally i don't like the Lease option... but



i also think it can work for some people in the right situation...

bad credit and cant get a truck on their own... not sure if this is the right move for them take the chance and at the end of the lease you can walk away so

they can be evil but that also have a purpose

 

Let's talk about a large construction company I worked for in comparison to the lease operator model.

There was bridge that needed to be repaired. Caltrans asked for bids to do the work. Estimators figured about a $20 million dollar job. Caltrans offered incentives of $6 million dollars at a rate of $1 million per month after 18 months and before 24 months. In other words, if the job was completed in 18 months, the company gets the full $6 million, 19 months, $5 million and so on.
So the company bid $19.5 million and won the bid, banking on cracking the whip and getting that incentive at the end. They tracked their expenses all along and realized about 14 months into it that even if they finished the job in 4 more months they would get only $1 million in profit. Then we drove some pilings through a fibre optic line and the fix was $10,000 per hour for 3 days straight. Another snafu was our 300 ton crane sitting in the middle of the freeway all night setting beams between two columns was supposed to be picked up and out of the lanes by 5AM. Well the crane was still sitting there at 10AM-- cost? Again $10,000 an hour.

What I'm trying to get across is that any business venture comes with huge risks compared to the potential rewards.

There's no way to make money with the lease deal? Agreed, but that is not the point of the exercise. The point is to get to that shangri la of owning the truck on an accelerated schedule compared to the traditional route of working hard and saving for years and years.

 

Hey look - I wasn't talking crap and really don't care what lease op's make; I also understand the point your trying to convey with your examples (overhead, profit, etc.)...

The figure is just surprising, thats all. Grossing $250K yet walking away with $40K is huge - over 3/4 of the gross going back into the truck, fuel, maintenance, etc; makes you question whether it is worth it or not.

If it worked out for you - Yay! This is an online forum; your going to get opinions from all ends of the spectrums.

 

And the company driver grossing $50k a year would take 20 years to get to $1 million compared to 4 years for the lease operator. But it's all about how much each driver can keep.

After 4 to 5 years the savvy lease operator perhaps owns their truck outright and quickly outpaces the company driver in earnings by half again in 15 years in today's dollars.

In other words, $1.5 million over 20 years for the L/O compared to $1 million for the company driver.

 

Yup good point.

You'll never get rich working for someone else (most of the time), and I'm sure some small fleet millionaire owners started out as lease op's.

 

Where is the imaginary welder who only charges 10% over his expenses I could keep him swamped with work until he went BUST.

Min markup to survive in any business is 26.5% and still be around next year , some try the old 10 & 10 but its tough to survive.

 

i can see both points really--its not that hard to pocket 40 k a year as a company driver-and no expenses
but then the lease op pockets 40--but has put money into his business venture--not sure if it is good tho--cause at the end you are paying the going price on that worn out truck and all your lease payments are up in smoke--i realize they all arnt like this

but if you could just buy a decent older truck to start with--you would be way ahead of the game--hopefully
now that part about the lop grossing 250 000 --i really take that with a grain of salt--especially if he only brought home 40 k--he just beat the truck and himself to death for really nothing---if you cant keep at minimum a third of your gross---you are in the wrong game

but now having said that --there is a really nice 01 star on ebay--looks in beautiful shape---anybody want to lend me the money for it--mine is tied up till next december -or else i take 50 % loss

 

Taxable is $40K. He paid taxes on that. His last year as a company driver he did $42K solo.


BTW Scotty you really haven't done the lease long enough yet. Just a week ago you were talking about a $46 check? I hope your wife works.

 

So are you saying that if you make 50,000 as a company driver and take home 40,000 then you go and change the oil in your pick up you shouln't count that money? Im not saying all leases work but there are some that do . If you work three years to save up a down payment then go finance a truck then you still have five to six years start to finish to pay it off and its going to have somewhere in the 650,000 mile area. Or you lease a truck for two years then finance the ballon payment your still about the same time to ownership, and you can write off the lease part if done right. And as a lease driver you could have the chance to make a little more than a company driver. I know i just bought my truck from schneider leased it for four years then paid a 15,000 ballon payment.