Lease Purchase with a small company

Your business acumen is flawed.

You have ZERO set aside for
repairs
truck replacement
taxes
retirement
savings
etc
etc
etc

 

Alright the first thing is that you need to know exactly how the fuel dicount works, i'm thinking your going to get a fuel card and the discount is going to be that you pay the cash price instead of the credit price because there is no way your company is buying enough fuel to qualify for big discounts, you don't hve enough trucks. If they are getting fuel at a bigger discount then the cash price then that means you are buying the fuel from them and their will be un upcharge back to the cash price for it, either way i would bet money your always going to pay the current cash price. At a current average ao around $3.899 if you get 7mpg your going to pay $.557 a mile in fuel alone.

You know have to pay a total cost of $515 a week for the truck and all of the insurance, $100 for the first 12 weeks and i bet your going to dip into that in that timeframe for just standard maint. so always figure on contributing to that fund and if you actually run 3000 mi a week your at $.18 a mile for that.

A previous poster mentioned taxes which is an important thing, do you have to pay the $550 heavy road use tax, what about ifta and reg. and permits, are these thing provided and if so do they deduct it from your settlements.

Please don't think we are wanting to dicourage you from this because alot of us dream big the same as you do but also undrestand that we have seen many drivers use lease purchase to try and become o/o's and get completely taken to the cleaners by it. These deals rarely benefit you, just the company. Do all of your homework!

 

Off topic, but why would you say his company doesn't qualify for big discounts on fuel? I worked for a company smaller than what he is talking about and routinely saw 14 to 40 cents below cash price every time I fueled. Is that not a good discount? Back to the topic, OP will never turn a profit at the "rate" this LP "deal" is offering.

 

I was leased on with a carrier that had 2,000 trucks and i always paid the cash price. The company got a better deal but i did not, in other words they were making money on my fuel purchases. He needs to know if that's what they are doing and they just told him what they get fuel for but are not going to cut him the same deal. Maybe i'm wrong but i don't see companies making deals that good on fuel anymore, even swift isn't getting $.40 a gallon discounts anymore.

His fuel surcharge is what threw me, with a surcharge at that rate he is not going to see a discount like that, if that were true the surcharge would be less because whatever they give you up front rest assured they taking something out the back.

 

My surcharge the first week of Sept '11, which was my last week at that company, was 45 cpm. That was only paid on the loaded miles (practical miles) base rate of 95 cpm, empty rate was a flat 90cpm. I did see discounts like that. They were passing it on to the o/o's there were no fuel card fees or anything like that. If not for the lousy rate they were actually a good company as a company driver, a very good company to work for.

 

Consider a third party lease.

 

You are looking at it all wrong, your operating cost isn't just fuel... Add in that $515/week, your salary, office expenses, phone expenses, maintenance and repair costs in addition to your escrow, etc.

Poor business management? That's what all the other fleece operators believed too right before they went bankrupt.

 

Glad you've got it all figgered out!

Go get 'em Tiger.