Lease Purchase with a small company

Didn't you just say you had another 'laundry list' to have the shop fix?

If you aren't prepared to repair a lot of the small stuff after you sign on the dotted line you are going to fail. .95 cpm is really slave wages... what do ya do if the trans blows next week... or next month? Do you have $2500.00 to pay for the repairs? If not they the company will fix it and take it out of your check... one or two of those and you no longer have a check!

The clock keeps ticking at $275/week plus the other stuff... you will never be able to take a week off without going broke. What happens when you get sick...keep running? I'm just getting over two bouts with pneumonia since early January... I've been home almost 3 weeks since the new year... you could never afford that.

If you take home over $800/week as a company driver stay with that.... anything else is wishful thinking... trust me.

 

The IRS says it takes $0.50 / mile to operate a CAR. A 4 WHEELER. So you're telling me that you can operate your big rig on $0.57 / mile?

6mpg average with fuel at $3.50/gal is $0.58 / mile. 8mpg average with fuel at $3.50/gal is $0.4375 / mile. How do you get $0.40 / mile out of that? Fuel prices are going up, by the way.

$550 / week for truck payment = $2231.66 / month. Assuming you can manage 2800 miles / week, all year with no time off and no breakdowns, that's $0.184 / mile. So using very optimistic numbers (perfect world), consistent weekly miles with no hiccups, and not counting insurance, maintenance, breakdown, deadhead miles, downtime for trailer repair, detention time, time off or tire escrow, we're looking at $0.62 / mile. You'll probably have one major breakdown during the year that'll cost you $5000.00 and 10 days off the road minimum (the last guy that owned the truck had the engine go at 500,000, transmission isn't far behind).

You are. If you had a realistic viewpoint, we wouldn't be so hard on you. But arguing with people that have owned their own businesses and insulting their math skills makes us question your grasp of business, finance, and thus your ability to succeed. You came here asking for information. You got honest input from experienced people that have either been there, or are there now, and then you want to argue with them about it. 6 months from now, let us know how England is treating you.

 

Less than 10% of share cropper's make the grade>hardly a glowing statistic. WHY do you think your current employer is wanting to "unload" this lump/truck on you>because he's tired of PAYING for it! He's NOT doing this to be a good guy and to help you succeed. He wants the costs associated with that lump off of his list of payables and you are willing to do it.

 

Just trying to be honest with you because, that's why you came here and asked, right?

On Feb 1st I bought a 2002 peterbilt that just had a complete inframe done last year. I'm still waiting on my authority to go active, till then it's sitting in my yard. My expected maintenance expenses were $500 for PM, oil & filter, fuel filters, spare filters, oil, coolant, parts, etc. SO FAR I've had unexpected expenses of $280 for my passenger mirror that someone smashed and $340 for the starter that died. I'd like to get new batteries $500 and rebuild the 5th wheel $300. If I didn't have the money set aside I would be bankrupt before I started.

Don't take everything personally, there are members here that are very knowledgeable and brutally honest because they don't want to see anyone fail or work their ### off for pennies.

 

I honestly can't answer that myself, this is my first rodeo. Experienced o/o's have suggested anywhere from $10,000-20,000 to plan for a complete overhaul. Of course, it's been done with less and probably even $0. Not with the luck I have, though.

 

My two cents. I'm also getting ready to go on my own after 15 years as company driver. My plan is as follows found a good used truck for 50,000 financed through local friend that has money with a truck payment of 1,300 per month for 48 month.Already have the money set aside for all the things I have to have to get my own authority.I also will start with 10,000 in the maintenance account because #### will brake always does.The company I'm planing on going with does both lease operators and brokering for those who have own authority a friend of mine with them with his own authority is averaging about 1.80 per mile and averages around 2,900 miles per week. I won't bore you with all the numbers but I feel confident that I can do OK. Any comments welcomed and thank you.

 

I would have to go with no less then $5,000 out of the gate for your truck, if the clutch has never been replaced that would be the first major expense on my mind at your trucks milage which could run up to $2,000 depending on were you get it done. Next would be the tranny which could run in excess of $5,000 depending on what you have, keep in mind these are thing that could go without warning and then you will need a tow truck and that is usually a min of $500, usually more.

Any work you can do yourself is a plus and if you have a good shop that does you right for the more major repairs that is also a good deal, but if it happens 1,000 miles from home and your truck is sidelined then your stuck getting it fixed there. I know the engine has been majored but that already has over 300,000 on it and do you know what was reused, such as the head, turbo or injectors, an injector will run at $350 and up and you can't run with a bad one. A turbo will usually get you towed and that's $2,000 for replacement, all things considered that escrow won't come close if these thing really happen.

You have done a good job so far and have certainly done more homework then others have, know you just need to consider anything that you have been informed about by the posters on here when it comes to the reality of running a truck out here.

 

Ideally, you should have sufficient funds set aside to do a major overhaul. Most probably don't have that much set aside. Depending on the engine, it can cost from $10-18,000 to do an inframe. If things go well and you don't have anything major break, then you may get along all right on a shoe string. If things happen then you will be out of business without the necessary funds.

One common trait that I see with most new lease operators is that they under estimate costs and over estimate revenue. I have hired a number of former lease operators and owner operators who get into these programs without sufficient operating capital or experience. None were able to make it with these programs. There are a small percentage who do manage to make the program work for them and they get the truck once all payments have been made. It is a very small percentage. One thing that I can see from your figures is that you are grossly underestimating your operating costs. The numbers you mentioned may not even cover your fuel costs with current prices. Whatever you think your expenses will run, you can add at least 20-30% and that will likely come closer to actual costs.

When you calculate costs, it is common for those who have never owned a truck to leave out some of the costs. For example, you will blow tires. It is a given. It happens to everyone who owns a truck. You can expect to pay from about $350-600 for a single tire plus road service or to have it changed at a truck stop or service facility. Fuel alone is approaching and even over $4/gallon in some areas. At 5 mpg you can easily spend $0.80/mile just to purchase fuel. If you get 6 mpg then you will spend $0.67/mile for fuel. Add lease payment, insurance, maintenance and other expenses and you are at or just over $1/mile. You also need to remember to pay yourself. If you pay yourself $30/mile then your actual costs are likely to be upwards of $1.30/mile. You will pay approximately 15% for self employment taxes in addition to income taxes, providing you show a profit. The most important thing is to take an honest look at your expenses and revenue.

Regardless of how well you plan, things will always happen to gum up the works. Good luck whatever you decide to do.