Lease purchase

In regards to lease purchase remember these three words DONT DO IT.

 

just remember its all about the money, on both ends!

 

I'm in the third L/P truck with the same company. It wasn't easy- and out of all the guys I started with in '94 I'm the only one left.

Things have changed a lot in the last couple of years, it's NOT the same game. Over regulation has made our industry desperate and scared. Never trust anyone or any business that's desperate and scared, they will do surprising things. Bad things.

A Lease-Purchase used to benefit both parties. Let's be honest here, the truck companies have the larger resources, so it has always benefited them more than us. Lately those companies are making the bulk of profits on the equipment and services they sell back to contractors. They sell a license and reg package every time a tractor gets turned in, with some power units that's three times a year. 3 X about $1,800.00 for one set of permits and one license plate. ($3,600.00 profit on this one item)

Then there's the maintenance accounts- you WILL lose it if there's a surplus when turning your tractor in. If they have to they will charge you to steam and shampoo the interior to use that leftover money.

Don't forget the insurance (they're usually an agent for the insurance company so they get to pad the insurance bill).

Oh- and the biggest deal going- fuel futures. You get a token fuel discount for using a fuelcard but the truck company bought and paid for that fuel on a futures contract. You pay the end user taxes (State and Federal Taxes), not them- and they keep the deep discount. You know, the difference between what you paid per gallon and what they paid per gallon in the futures contract.

You CAN be successful as a leased O/O in a Lease- Purchase truck. Seriously, if you REFUSE to FAIL you could do it- but it could take that level of commitment.. or more.

If you can sleep in freezing cold and damp, suffocating heat- if you can drive 52 mph to save fuel, if you own a tire regrooving tool and can do your own light repairs, you could make it- if you almost never go home. If you can ignore the distraction of having a truck maintenance account peak out at $5,000.00 in the negative and slowly come down to zero at .15 cpm, you might make it..

Seriously- if you're built like this, come on in and get some. If you don't want to sacrifice and work this hard stay in your new company truck. After taxes and meals, after repairs (.15cpm) I usually take home from $1,100.00 to a little more than $2,000.00 a month.

Here's my situation and the reason I'm working this hard. Dec 8th this truck will be PAID OFF. Twenty two years of hard work and I've got a nice equity built up in life. Soon I'll be debt free. In ten years I'll be watching Ice Road Truckers from my living room in Singapore. Or Santiago. Or any other place I choose. And, this will be the third time I've driven a paid off truck. A paid off L/P truck brings home almost a dollar a mile once there's no truck payment left. Burning up 41% of gross for fuel and twenty cents a mile for maintenance- and the lower insurance costs of an older power unit, that leaves a nice profit to save for a house in the Philippines. Or Malaysia. Or Uruguay. I hear Truckers in the Congo make good money...

So, it's your choice. No pain, no gain. Personally this hurts less than flipping burgers and mopping floors. The difference is that you can complain about how hard you work.... or about how little money you make... or you can do something about it. That might mean staying where you are and NOT leasing a truck.

If you want to climb through all that to get here, come get some. There aren't a lot of us- but I'm not entirely alone here.

The point is, I DID IT, I'm DOING IT, and if I had to I could do it again. It hurts, but "No Pain, No Gain".

So don't do a L/P unless you have a high level of commitment. Don't do it if you have a family to support and bills to pay. Don't do it unless you don't care if your credit gets ruined and don't do it if you can't stand the shame and embarrassment of bankruptcy or a divorce. Don't do it if you want to keep a clean credit rating.

And don't even consider it if any of this scares you- you're not ready to play the Lease Purchase Game yet.

 

Okay I understand everyone on here almost hates l/p programs and for the most part with good reason and I'm sure most of you are right especially with a millage based lease and maunder because I've seen more than one percentage based lease work and ink sure its mostly because I work for a small company who doesn't play favorites first come first serve with loads to bad he's already sold all of his old trucks and he doesn't want to do any more leases

I guess what I'm saying you all give the reasons why millage doesn't work how bout why percentage doesn't work just curious on your at all cost don't do it attitudes last time I checked any business venture is a gamble if you loose dusty yourself off and figure out what you didn't do when miles slowed down did you whine on here or go thru the proper channels most companies will let you fall don't mean you have to just give in

 

Percentage based leases have the benefit of "possibly" earning more per mile IF the contract rate goes higher in the future.

The problem has to do with transparency. Unless you have seen the actual Freight Bill then you will never know if you are in fact getting the correct rate or not.

Carriers have a tendency to play fast and loose with this information and will get agitated if you dare ask to see the freight bill. While you are legally entitled to see this document good luck actually seeing it or keeping your job very long if you insist on seeing those freight bills on a regular basis.

These carriers expect you to "trust" them. I say Horse Puckey to that. Show me the rate sheet, the confirmation sheet, and the freight bill each and every time and MAYBE after they have proved they are being 100% open and honest I might start to trust them.

To trust blindly is for suckers.

 

Hit the Nail on the Head.... Great post

 

Good post. I often wonder why other carriers do not give the info to their drivers, I for one do. My signed rate con gets scanned and emailed to my drivers. I am obligated to provide it to the driver if they ask, and this is only to a lease or contract driver BUT I send it to all. company and lease. Why? Well, its pretty simple. I dont feel hiding anything like this serves a purpose. Second, these rate cons usually depict specific criteria such as check calls or specified duciments to be returned, rather than transpose to my own dispatch form, my drivers get all of the required info up front, no chance of screwing it up in translation. Since I hold my drivers accountable for the calls and getting the correct data to me, I make certain they have all the info and requirements as provided to me. To hide this info to cover what we are making on the load is proposterous. I could see it if I was making thousands of dollars on a load and was only paying a driver in peanuts but I make sure my drivers see what these loads are paying, when they also see how much the fuel pump says on it when they get the fuel for that run as well as what they make on it, they know all too well there is not much to be made out there right now. Sure you can survive, it is a hell of a struggle this time of year as it always is for our industry so if they partake in making sure they only spend what is needed, they insure their own job security at the same time. I think it is a simple idea so I use it well.

 

Didn't think most big carriers had a problem showing the freight bill if they wanna #### you they just use there brokerage to make the initial contract then sell it to the company and the deal between the company got is all they have to show the contractor

 

No need to do that. Computer programs generate Invoices, Freight Bills, Bills of Lading, and contracts every day. Doesn't take much skill to make out a dummy freight bill just like truckers make out dummy Bills of Lading for blind shipments.

Your'e thinking too deep into this.

 

Probably so but that's what makes me me I look past the simple answer and look into how and why with that being said I believe in alot of cases drivers fail themselves on these l/p programs you can't drive your own truck making payments on or paid for like you do a company truck or act like one would when there a company driver but that nds just my two cents