BEST LEASE PURCHASE??? (to head me towards ownership)

Seems like the best plan is to buy from
a used truck dealer. Smaller monthly payment
and paid off in 3 years. Take your truck to any
company at any time. Down side is down payment
and for some the credit check issue.
Thanks for all the input I have learned alot.

 

Just buy a truck & drive... now that's a plan. Where does the freight come from? When do you see the money for the job? Who is guaranteeing the contracts? Where is the fuel money coming from? Insurance? What about all of the FMCSA requirements like a drug & alcohol monitoring program? Safety program? IFTA Tax tracking, payments & refunds? Verification of the miles & MPG for the IFTA Taxes?

Just buy a truck...eh?

 

Anybody planning on a Lease / Purchase business plan:smt017 should get a copy of this month's [ November, 2012 ] issue of "LANDLINE" magazine. It is put out by the OOIDA, a group supporting truck owner / operators. It has an article about leasing equipment from carriers. Title of article is " CONSIDER THE ODDS", and basically says do not even consider it, bad idea:smt022.

 

While I agree, it does not work for me at all, and I would never do it. For some guys it works out just fine and they seem to do ok. Others fail and loose everything. I look at it as life is very short, and you only have 1 go around at it, so just be happy and who cares what anybody else thinks or does. All you can do is make sure #1 is taken care of, and let the rest fend for themselves and hope it all works out for everyone.

 

Imagine if they outlawed leasing, the number of company drivers would double, making the big boys powerful enough to run most small & independent operator out of the business.

 

Nope, wrong answer. Why do these companies encourage L/P in their business plan ?
They know they can make more $$ on a L / P truck than paying a driver and running it themselves. The more money they make, the cheaper they can haul freight. So, by operating cheaper trucks, they can keep rates lower. Common sense 101.
Read the article.

 

The big carriers need the owner operators and independents to haul their freight. Most of them have their own logistics companies where they book freight to those with authority. They get the freight and book it with an owner. They have no equipment costs, no insurance costs and no driver costs. They take their cut off the top and let others assume the risks. I read an article some time ago that stated that something like 90% of all freight hauled goes through carriers with fewer than 50 trucks. Without the owner operators and small carriers, this country would come to a halt. The big carriers cannot haul the bulk of the freight, contrary to what they would have you believe. They may contract to haul it, but contract it out to independents and smaller carriers. Even if you got rid of all the owner operators, they major carriers still cannot haul all the freight. They could not gear up fast enough to offset the loss of capacity. This country can get along just fine without the mega carriers, but the country cannot get along without the owner operators and smaller carriers. There are thousands of carriers and more applying for authority every day.

 

Where in Business 101 is it Common Sense 101 to deliberatly persue a stratagy to price your product as low as possible ... Yeah mega carriers may use leasing as an option to reduce thier costs, but it's to increase thier margin, not reduce their cash flow.

 

Makes no difference whether you raise the bridge, or lower the water.Mega carriers have thousands of trucks to load every day.They have to operate on the economy of scale. If they can OFFER a lower rate [ which you admit they can do ] by using a lease program, they reduce their cost to operate. By decreasing their cost to operate, they increase their margin of profit.Also, if they put the cheaper stuff on the lease truck,then load the higher paying freight on company equipment, they can always have the cheaper stuff if there is nothing else for the company truck to haul. But you better believe their trucks load the higher paying loads before being offered to the lease trucks .

 

Trying to manage your freight to that level of delination would probably add enough overhead to your back office cost, to more than offset any savings from a lease operation.

I'm with Swift and they have standardized their truck numbering scheme to the point the planners don't even know if a truck is lease or company.