Lease Purchase with a small company

You may be having great weeks but you are driving a company truck... do you think the company owner will let his trucks sit and keep his L/O's running? Not on your life. So the L/O's will be the first to feel the pinch when things slow down. The company owner won't care because he'll get the truck back when the L/O goes belly up.

Fuel prices may hit $5/gallon this summer if the Middle East blows up again... one well placed missile from Israel to Iran will have us all up the creek.

Just a note... I spent $80,000 on fuel last year... I run hard and heavy so I spend a little more than some guys on fuel but my son spent $65,000 on fuel in '11 and he has a 7 mpg Detroit...

I'm NOT saying don't become an O/O... but do it the right way. Buy an older truck with YOUR name on the title...not someone else's.

 

Are you local to Knoxville, Tn? If so private message me i can give you some local info

 

But you are in Indiana, and have to immediately add the 0.11 cent fuel tax back on and there is the road tax as well. Oregon has low fuel price on pumps as well, they nail you with tax on the back end of the month

 

3 year's time you can save enough to put 100% down and have a fund. What's the big hurry? Set yourself up to where you at least have half a chance. I'll say it again, at the rate they're paying you will never turn a profit. Been there and done that with the same rate in a paid for truck, never made a profit..

 

There is an old saying about planning for the worst and expecting the best. It seems to me that you would be much better off if you worked on getting your credit straightened out and saving money rather than leasing a truck with the costs you have posted. When you get in too much of a hurry, you make mistakes. There is no reason to spend a lot of money on your first truck. The economy is still soft and is not likely to do much better for the next several years. I would not even consider leasing to a carrier with rates you posted. If you step back and take a realistic look at the deal you are being offered, you will see that you should do as well or better being a company driver. If you stay a company driver and save $200/week out of each check, you can pay cash for a decent truck in a year or two. It is a great feeling to know that you don't have truck payments.

I had to put in a transmission a couple of weeks ago. I was fortunate that I could almost make it back home before it died completely. I got about 5 miles from the shop when it stopped working. I have a local mechanic who saved me several thousand dollars over having it done on the road. I had a transmission go out on a different truck about 3 years ago and spent about $8,500 to get everything done. The tow bill alone was almost $1,000. The driver sat in a motel for almost a week waiting on parts. By having the work done locally, I spent about half that amount with a local shop this time. You can never predict when a truck will break. Unless you have the funds or available credit, you will be out of business when something happens. And don't forget the rears. A few years ago I had a power divider go out and spend almost $1,000 just for parts. Fortunately, it went out near the house so that I could get it repaired for a fraction of doing it on the road. A year or so later the other rear went out iin Nevada. As I recall, I spent over $5,000 to get it repaired, but I had a couple of other things done while it was in the shop. I believe the rear alone was over $2,500.

When a truck breaks down on the road, you have no control over the costs. You spend whatever they decide to charge. You don't get your truck back until you pay the shop with guaranteed funds. That means that you pay them with cash or a credit card. No truck, no income. At the rate of compensation you are being offered, I doubt that you will net any more than if you stay a company driver, if that much. I would never lease to a carrier who paid such a low mileage rate, even with a fuel surcharge. I have leased to a couple of carriers in the past, but they paid percentage. With percentage you should make more than if you are only paid mileage. I would only consider leasing to a carrier that paid percentage.

 

Last January I was headed home empty on an icy Indiana road... had the power divider locked in. A strong crosswind blew me into the fast lane which had a bare patch of pavement...BANG! the power divider broke and i was stuck 50' from the entrance to a repair shop... had to call a wrecker to move the truck.

I spent two days and $2500.00 getting the front diff replaced with a "good" used one... one week later, to the day, the "good" used on exploded. I had it towed back to the shop that fixed it the previous week and had the now broken diff rebuilt.... another $2300.00.

So $4800.00 spent on one part one week apart... on the L/P YOU would be responsible for the repairs... take another look. .95 cpm is way to cheap to work for (my outbound stuff pays over $3/mile and that ain't enough)... save some money and pay cash. Find a good paying carrier to lease to or get your own authority... keep you eyes and ears open and learn from those of us who have made these mistakes..

When I was in auto sales (quit full time driving for a few years) we used to LOVE to the 20's crowd come into our showroom armed with a down payment (usually from Grandma) and wanting to buy a new car. You could sell them just about anything... they just HAD to have it! (I was the same way...(GTO, Cyclone GT, SS396 among others). Evrybody wants it now... don't want to wait. A few months later almost every buyer came back wanting to trade down since they couldn't make the payments... don't be that person.

Believe me... wait! You are an adult... trying to make a business decision. Make a smart one....

 

If you already have your mind made up no one will change it, Here is something to try, think on this for say another 60 to 90 days, Get yourself a ledger and you act as the owner only working and living on the numbers you have already figgured out, if it works and you can pay for all expenses go for it.

 

I didn't like it either. I didn't have a pot to piss in when I was 23 and first started driving a truck "verifiably". I banked $500 a week and made huge sacrifices as a company driver, volunteering to work weekends on freight no-one else wanted to run etc, in the early years. I was on a mission. Nothing came easy or without sacrifice. It never does. I had the cash to buy a truck and trailer outright with operating capital by the age of 28 if I had wanted to, but I knew I wasn't ready for it. It's very difficult out here even with paid for equipment. Nobody is pissing on your dreams and telling you it can't be done. You just need a reality check here. You have to know what the failure rate is with LP. You obviously don't have money to put on a downpayment of any sort not to mention the operating capital necessary above and beyond that. If you're bullheaded and go through with it based on some dreamworld notions of owning a big truck, good luck with it...