Thoughts on Prime owner/lease?

Hey now! Them's important decisions!!!

Mayo or ketchup???

Onions???

Do those pickles look dropped on the floor???

Lease??? Sign me right up!!!

 

10 weeks is almost up .......So are you going to lease a new truck , buy yours or go to the company side ? If you don't mind me asking..........

 

Buying it. Just got the darn thing decently broken-in!

 

"Company Loser" ???????

 

There ARE a few good companies to L/p from that are not bad,...but,...

What I am about to say here is NOT fiction or just opinion. I looked, researched very heavily, and studied many L/p contracts for more than a year before jumping into the whole L/p thing. Lets face it, a newer, decent truck is close to, as much, or perhaps even more sometimes, than someone would pay for a house.

There are many companies that are sharks, using L/p as an extension of their revenue. Most are very easy to spot. The dry-van/reefer market for example, lends little room for profit to begin with, and Companies that put rookie drivers into New, or Almost New equipment as L/p oo's running this kind of freight with 700+/week payments already know the profit margin is too thin for it. On top of that, they will ask $139,000 for a truck they bought at a fleet discount for $88,000 or less, and sometimes adding interest on top of that. It sickens me when I see these companies L/p O/o trucks roll down the road, their drivers screeming past me, struggling, behind on payments, not knowing any better, continuing to keep these crooks in buisness. Instead, these drivers should have their focus on lowering their fuel and other costs, beating them at their own game, or perhaps finding a better company to L/p from. Of coarse there is that company that forces their L/p O/o's drivers to run 60-62, that everyone know all too well, that convince their drivers they are a good lease company, when in fact, they still sell their equipment at ABOVE list price and interest to boot, just like the other really bad companies, all the meanwhile trying to force you to start your lease over every time you get close to completing it, keeping you 'In their endless Net of Greed'. This makes their lease only affordable if you do in fact squeeze every last drop of fuel out of your very overpriced truck, making those 700+ a week truck payments. Yes there are a few sucessful drivers with this company, because they figure out how to discipline themselves for such things, but at the end of the day, If they want to continue service with them, they are forced into leasing perpetually under the pretence that 'Your truck is too old'. This in my book is as wrong as the rest of the sharks out there, because you will never have that clear title and wad of cash they claim you will easily get.

I have also seen here lately, more companies that are offering Variable rate leases. Sadly, these are quickly becoming popular among first time L/p candidates, but are among the worst of the L/p's I have seen yet. The average solo O/o can easily rack up 2500 miles a week or more, and any L/p that sucks 0.25c/mile from you, based on miles, is an avg. weekly truck payment of 625/week, and $750/week if you get 3k miles weekly. Thats absolutely, an insainely high payment for anyone in the dry-van or reefer market, and lends itself to you struggling at best. These leases TEAM are more expensive weekly than outright finincing a new super-truck with interest directly from a dealer. 0.25/c per mile at say 6k miles (decent team miles weekly), is a whopping $1500/week payment just for the truck!. Thats $6000.00 a month!!!. Again,...INSAINE!!,...Thats well beyond the margin for profit long term.

There is very good reason so many have a bad taste in their mouths over the whole L/p o/o thing. There are actually more companies that are bad, than good, when comparing them, but NOT ALL ARE BAD. and that Is the whole point to me chiming into this ill-begotten thread to begin with. People who do not know any better,...Ppl trying to research this subject,...ppl new to trucking, need to be able to learn what options are out there for them, including the few L/p programs out there ALONG with all the other avenues like buying outwright, financing, and everything else.

If you are going to L/p, running that thin profit margin they have to offer, then absolutely educate yourself before diving blindly into financial ruin like most do. Here is a FREE resoucre for newer drivers that will absolutely teach you how to beat those L/p companies at their own game, as well as show you how to maximize your profits while your at it. Its written and geared toward newer drivers, and will absolutely help you. It is also written by a driver, who is very sucessful that did the L/p thing, and not some stupid author or show host looking to make a name for himself.

Here is the FREE book.
http://sanity.dontexist.org/pub/The First Time Class-8 Lease-Purchase Owner-Op Guide.pdf

Take it,...Use it,...Learn from it,...THen go lease and be sucessful!.

 

they will ask $139,000 for a truck they bought at a fleet discount for $88,000 That is a bit fair fetched

 

Yes, you are right,...It sounds very much far-fetched, but that is ctually NOT a far-fetched statement. I purchased my truck for exactly $88,000 brand new at its large volume fleet discount. Average List on my truck at the dealer was $129,990-$139,210 at that time. It was not an overstatement, but rathar an acual case. I have even been shown the statements from a mega-carrier where they purchased tractors through GE-Financial, for less than $90,000 each. That carrier leases those same new trucks to thier own drivers for more than $130k each, and gets $90k for trucks with more than 100k miles on them. They are clearly looking at profit when leasing their trucks to their own drivers.

Its also much more than a whispered rumor (one company confirming this to me directly) that KW offered several of the mega-carriers tractors in mid 2010 to mid 2011, 50 at a time, sow low in price, to get their foot into the fleet market, that it made even the volume truck purchasing agents of that compy's knees buckle (way-less then the rediculous $88k I mentioned).

 

..........

 

RAWZE
Having bought quite a few trucks over the years and at a good discount ( including combining my orders with a FLEET ) your $88,000.00 is still in the BS range.

 

Let's not pretend here... you posted your screed on this thread, so we know which carrier you're pretending to know something about.

Let's start with the money. That usurious payment you talk about is what appears on our settlements... +/-, but on the lease side it also bundles the bobtail, general liability and cargo liability insurance payment with it. Rookie drivers? Not here. You have to demonstrate that you have a clue about trucking before they'll put you into a lease/purchase agreement by completing a 3-year straight lease first. And... there's skin in the game. $13,000 down.

Fair enough. That's quite a bit they're going to make. Where does it say that it's illegal to make a profit on invested capital in this country? That's why we call our system CAPITALism. Frankly, I'd rather bet my chips on an outfit that understands that profit must be a positive number, rather than some mis-managed outfit like Arrow Trucking. Remember them? The anti-profit flatbed outfit? The one that left hundreds of drivers up the creek at Christmas... no money, no fuel to get home, and especially- if you were in a lease purchase agreement- no proof that payments had ever been made.

Hey! Anyone!!! Let's hear which reefer outfit has the slowest trucks on the planet!!! LOL!!!

Yup, that's why we're supposed to be running so slow. To focus on lowering "their fuel and other costs."

You understand of course, that any carrier that "forces their L/p O/o's drivers to run 60-62" is in jeopardy of running afoul of the IRS regulations concerning who is an employee and who isn't? I've also never had a junior assistant wannabe dispatcher in my truck holding a gun to my head demanding 60-62 mph!

The purchase price of our tractors is listed in the contract you sign to lease them... with the price listed according to mileage at purchase. Part of my decision was watching the price of used tractors on the Truck Paper website. I'd say I got mine about $15,000 to $20,000 less than comparable tractors listed there.

And there's a problem with running an efficient business? In fact, I've found it makes the difference between doing about as well as our company drivers, versus doing very much better than them.

You should really get ahold of one of our contracts and read it. No one is forced into "leasing perpetually." It is in fact (in the case of the straight lease) a true walk-away lease contract. I know a number of individuals who have turned their trucks in for various reasons- mostly personal life changes- who have done very well. If you take care of the machine and keep the maintenance up, you will walk away with the majority of your unused escrow funds.

Now, the lease/purchase contracts do include a clause that allows you to lease the tractor back on once you've completed the contract. That assumes you've kept the maintenance up, and it will pass a DOT inspection.

Absolutely a bad deal! Good thing my carrier doesn't do anything like that. (PSST!! Don't be giving them bad ideas!!!) BTW, just so you know. We aren't paid by the mile.

Let's be honest here. I'd say that a good majority of the folks who don't do well weren't prepared for what they were getting into in the first place. Newbs, rookies or whatever you want to call them, don't need a lease or a lease/purchase contract. It's a big enough step trying to learn how to drive the truck without piling some serious financial consequences for not doing so well on top. Especially for folks who have serious bills to pay... car, mortgage, feeding kids. Second, most folks just starting don't realize the necessity of having enough cash stashed away to keep the business afloat during the rough patches. Third, most folks look at this as employment on steroids, not running a business- that settlement check is cash flow into a business, not your paycheck; your salary is one of your expenses. Fourth, hardly anyone even looks at their settlement statements, let alone doing the minimal bookkeeping to know if their business is even making a profit.

I'll agree, there are some seriously predatory carriers out there. I was reading some posts just today of one that forces new drivers right out of post-CDL training into lease trucks, or tells them they will be waiting for weeks to get into a company truck. Now that there just plain sucks.

BTW... my carrier really isn't into KWs. They're rather heavy for the kinds of loads we pull. To be fair, at time we do pull KWs into the fleet, but it's usually when there have been problems acquiring sufficient numbers of Freightliners and Peterbilts. We just took delivery of a batch of KWs earlier this year.