Wondering how leasing works

I think they also give you a nice new company hat !


Well worth it !!

Check out prime, they lease big shiny trucks......

 

Might want to read some of the other threads on companies.

 

There are pros and cons for being both.. as a company driver, you have a whole lot less you have to worry about, just sit your butt in the driver's seat and go where they tell you. When you're done, hand the keys back to them and walk away. As a lease driver you have a whole lot more stuff to worry about, keep track of, and take care of... but at least you don't have to drive to New Jersey if you don't want to. Pros and cons like I said. If you've ever owned a business before then you will be ok as a lease driver, just do all the numbers first before you commit.

 

You can make money as a lease operator and it is actually a good step in between company and actually owner operator. However for a new driver it is career suicide! These companies realize as a new driver that you don't know any better and its easy to get you into a lease by giving you a brand new shiny truck with no money down. Once you lease they will not let you go back to company driving! There is a reason they do things this way.

 

Truck and equipment leasing has been going on for decades and has nothing to do with "what is going on with our country." The websites and the nice trucks do look good, I agree. The devil is in the details of the actual leases driver sign. Would you like to see a real lease? I'm thinking of posting two leases.

 

The company point of view: a power unit at little or no cost and tax benefits (as the nominal owner, the leasing company claims depreciation). When all was said and done, the carrier I drove for made at least $2,500 on each lease (that's what I was told when I turned in my second truck; I knew the guy who told me--he was a friend and he was the carrier's leasing guy--he knew where the money went). The leasing company made the same, and the leasing company was the loss payee for all insurance claims. A totaled truck was, simply, another claim.
Translation: the tractor and the driver cost the carrier and the leasing company nothing.

I had excellent credit and resources. I still chose to lease. Ditto many of my friends. I don't know all drivers, so I don't know why they choose to lease. Many drivers I knew saw leasing as a first step to becoming owner operators.

The leasing company/carrier's risk is minimal, compared to the driver's. Any and all maintenance, damages and repairs (and most taxes and permits--depends on the lease) are paid for by the driver. When the tractor is turned in and the truck is prepped for resale, the driver is responsible for, well, everything: tires, paint, glass, body work, leaks, you name it. Guys who trash their trucks pay for it or are made to through lawsuits brought by the leasing company/carrier.

Again, without speaking ill of manufactuers, finance companies, leasing companies, and carriers: the leases offer them advantages. Nothing wrong with that, but they wouldn't do leases if it hadn't worked over the years.

The overall lease arrangements are complex. Manufacturer leases truck to leasing company, which is financed through, say, GE Capital. There may be a guaranteed buy-back by the manufacturer at the end of the lease term. The leasing company leases the truck to the driver, who then leases his work and use of the truck to the carrier and pays for just about everything. Manufacturer, leasing company, financing entity, and carrier all derive tax benefits (big question as to which entity actually owns the truck; on one of my leases, I was listed as the owner!), and they all make something off the deal. Hopefully, the driver comes out okay.

I don't want to get into a leases bad/leases good debate. I'll post a couple of leases later today.

 

There are some companies that do let you return to company driver. I know my carrier has a $500 dollar lease cancellation fee and they will put you back in a company truck.

That said, as I told them when the tried to talk to me about leasing... I have no intention of renting a truck from them.

 

Just look at one aspect.

Parts.

As a company driver you do not care what parts cost the carrier.

As an Owner Operator you get to shop for parts and get a small percentage off list price, just like anyone who walks in off the street.

As a lease purchase the company shop, which gets a larger percentage off list price than an owner operator, charges you list price PLUS their standard markup and you can bet you do not get a discounted labor rate.

Lease Purchasing amounts to a legal license to steal. You get better odds in Vegas!