Input on this Potential O/O Deal

Steve, you are right in that he has talked about staying away from such deals in the past, but he also mentioned how he has watched this company grow.

Whether or not its a good deal I dont know...Im not in that situation. He did mention that that truck is in their name so, I figure that if he cant make payments on it...they get the truck back.

there is a compnay out here that works in the oilfields and they have a lease program. Id just like to ask them how many of their drivers actually have completed the lease and own the trucks. Every truck I see says lease on them instead of a private o/o truck.

 

In my next statements please understand I'm not trying to poopoo your deal..just add some possibly important details.

First, you should read the Federal Truth in Leasing regs.
Most lease deals fall short of this.

Next, because the loan(s) are not in your name, you may not be able to use the typical equipment deductions at tax time. I think it would be a different story if you had an actual lease/purchase contract thru them.

Also, regardless of the presence of a true lease/purchase contract, the IRS may still view you as a company driver. Naturally this affects everything to do with income tax, soc sec, medicare etc payments & reporting. Don't forget Workmans comp as well.

This is one place where reading the truth in leasing regs will help you.

Who pays the IFTA, the repairs, the tolls, health ins etc?

I would run this all by two people. A trucking attorney & a trucking CPA.
The info you've presented leave me with more questions than answers.

Sorry if you see this as a downer Bro'.

 

Well I guess he could explain the difference between a regular fleece and the lease he is considering. That might shed some light on the issue.

 

As with any deal check every possible angle and i would want to see the money this driver says he makes in black and white 200,000 after expenses is a pipe dream type figure for most truck drivers. So until i saw it in black and white and IRS return i would beware something that sounds to good to be true probably is to good to be true so do your homework well and i wish you luck.

 

Try and look and the deal from a different angle: that of the lessor. What is their business plan? How does the deal work for them? How do they make their money? Someone is always going to get the short end of the stick; do you think it is them?
An observation: you've watched them grow for 5 years, and they only have 5 trucks?.. Did I read that right? To what purpose would it serve to add trucks and new drivers? Is their customer base expanding? If so, then who business are they cutting into?
I've been with Prime for 2 years now, and completed one lease. Their deal is making profit from freight (28%) AND selling the lease trucks back to Freightliner after we made the payments (it's a lease, not a lease purchase). Once I figured out EXACTLY how the game was played, I bought my own truck, but run Prime frieght. 72% pulling their trailers with no rental...a good deal. You don't see Prime advertising that anywhere, so you know it's a good deal. They will only advertise what they want you to do...
Being that your prospective company is small, figuring out what their game plan is should be simple; just rembember, they are not in business of giving money away.

 

Good Luck Brickman.

I know how you have been talking about the Pete you were looking at.

As far as the comments on the IRS issues and such, I know you have a good tax advisor. I personally and professionally don't see a problem.

Now as to being a company driver after being an owner operator, I did it and did it ever suck.