LEASE vs OWNER operator?

So o/o don't have to pay for all them deductions you listed??? Lol just because lease operator pays weekly doesn't mean anything.. I rather pay weekly than monthly but either way at the end of the month it's about the same.. Lease purchase are around 10 percent interest not all that bad., what are you getting on your truck?

 

As I stated; "The other charges will be identical if they both use the same services." The difference has to do with the truck payments and the length of the loans. Then there is the issue of a lease as compared to a "lease purchase." A lease you NEVER own the truck at all. A lease purchase will normally have a buy out or BALLOON payment at the end of the deal. It all depends on how the lease was structured.

Look into these lease programs and you will see truck payments ranging from $600.00 per week to as high as $850.00 per week. You are locked into that specific carrier. Much like an indentured servant. Dont like the loads available? You can refuse but then you go to the bottom of the list and hope the company comes up with an alternate load or wait until the next day for a different offer. Want to leave the company and take the truck with you??? Only if you have enough money to pay the truck off completely! Otherwise you give the truck back and the company leases it out to the next aspiring owner operator and the cycel starts all over again. It is common knowledge these trucks are recycled several times through several drivers before the truck is ever bought. More often the truck is traded in by the carrier on a new truck after the truck has 400 or 500k miles.

When you finance a used truck through a 3rd party or dealership the monthly payments will be a fraction of what these lease drivers are paying and you have more control of where you lease that truck. Lease to a carrier and you don;t like it after a few months? Give them back their plates and lease on with a different carrier.

When I did a lease program the pay was .83 cpm loaded/empty plus a .09 cpm fuel surcharge. The truck had a bumper to bumper warranty for the first year and the truck payments were $400.00 per week. At the end of the year the truck made over 120k. After all expenses and taxes were deducted I was down around 30K in "wages." I had no benefits and at the end of the year the company was supposed to help me purchase a brand new truck. They were to be the co-signer on the loan but the company was sold twice. First to a group of managers that were running the place and secondly to Burlington Motor carriers who went out of business a couple years later.

I have seen the same story repeated with other drivers many times over in the 2 decades plus I have been in this industry. The drivers names change and the company names change but the games is the same; The carriers make the money off the backs of these poor lease operators who (many times) lose their homes, their cars, and in some cases their families in a futile attempt to succeed where others have failed.

Now I work as a company driver with full benefits, have less stress in my life, and earn a decent living. Wages average around 70k a year and I am home each weekend and sometimes during the week as well.


Lease plans, just like the casinos with all the glitz and glamour, have some people win from time to time. The majority of the time the Casino or "house" wins. How else do you think they can afford those huge complexes, lights and property tax bills? Off of the backs of all the suckers.

Lease plans are stacked AGAINST the driver. The company stacks the deck in their favor every time. The only way to win? DON'T PLAY.

 

now that's well put.. Now I can't disagree with you.. Lol

 

I'm a lease operator for schneider, mine is a positive experience, I'm on the IC ( independent Contractor ) choice program. Paid a percentage of gross . I get full access to the company LOAD board and book all my own loads. So I choose when and where I go, and only book freight that pays a good rate. I've never had a negative check or settlement, on a bad week I expect to clear about $1000 bucks, better weeks up to $2500 after expenses. It was working out so well that my wife decided to also lease a truck with them, we both have 2018/19 freightliners. And now both clear upwards of $1000 bucks every single week. With the added advantage of booking our own freight, we run the same lanes, often picking up at same customer at the same time and running together to the delivery. Over all we are both very happy with the situation. Leasing is not all doom and gloom. Do your home work and choose a company where you are in control of your business. It does not make sense to pin the success of your business on the ability of a dispatcher who is not employed by you. Taking control of booking your freight eliminates that risk. And the success or failure is on you and you alone.

 

So you bought a truck and leased it on with the pumpkins.

If you are a lease purchase to a company, you are in effect still an employee buying a truck.

If you are leased to a company you are operating under their authority with your own truck and are a legal I dependent operator.

 

Lease to who? A trucking company? I've only heard of one driver who said he owned his truck and leased it back to the company he drove for. I'd like to know more about the advantages of doing that, for both the driver and the company, but can't find anything on it. Whenever someone talks about a lease, it's always about the driver leasing a company owned truck.

 

This is what I don't understand because it's never talked about. So the o/o MUST lease the truck they bought to the carrier(s) they've contracted with for the purpose of getting someone's plates put on their truck? Plates are synonymous with 'authority,' and the o/o's you're talking about don't have their own authority for some reason?

 

If you want to be an owner operator, you can either purchase a truck or lease a truck. There's a potpourri of options. The worst option is leasing a truck FROM the company that dispatches you.

If you want to get dispatched by the company, you have to lease your truck to the company. That's in order to be able to operate under their authority. It doesn't matter if you own your truck free and clear, financed your truck, or are leasing your truck; if you want to pull freight over the road you either have to get your own authority or lease your truck on with a carrier.

I own my truck, it's paid for. I will own my trailer at the end of the year. I lease my truck to the company that dispatches me. My truck earns a percentage of anything billed to the customer. If I ever get dissatisfied with the situation at this company, I can "delease" my truck and lease on with another carrier or get my own authority. Anybody that leases a truck FROM the carrier they have leased their truck to, CAN'T leave the company and take "their" truck. If they lease a truck from a dealership, then they have lower lease payments AND greater freedom to choose a company.

So why do so many people that hire on with large carriers sign on to lease a truck FROM THE COMPANY? It's often because they don't have the credit or finances to go out and purchase or lease a truck on their own. Big companies make it easy to lease a truck. That salesperson during orientation makes a commission for every lease. The company makes thousands of dollars every month from each truck JUST FOR THE LEASE.

Can anyone succeed by signing up for a program like this? Absolutely, BUT the deck is stacked against you. You have to be willing to "buy a job" and work your ### off for the term of the lease AND hopefully save enough money to either pay off the truck or finance the buyout at the end.

Don't buy a job. If you want to run a business, ask yourself a question: Can you hire someone to drive that truck for you, pay them well, AND still make a good profit and return on investment? I hear folks leasing a truck from large carriers say they are doing well, "making at least $1000 a week". By "making" $1000 they mean that's their settlement check, WITHOUT payroll taxes in most cases...in other words about the same as a gross paycheck for a company driver. No profit on top for the owner. By comparison I average over $1500 gross paycheck and get a separate settlement check that is greater than that. The settlement check is AFTER paying the driver (myself), after paying 19% payroll taxes, etc.

 

How do you know that what they say they billed the customer is really what they got? Is there a law that says any broker or company has to truthfully divulge what THEY'RE getting paid? Can't they say "here's the run we're offering you, we will pay X amount, take it or leave it?" I'm pretty sure that's what the broker's do from the stories I've read about initial lowball attempts which end up magically getting increased after you say no.

1. Leasing a truck from the company you work for is one thing.
2. Leasing from a 3rd party like a dealer and then leasing it to the company you work for (sort of like a sub-lease on an apt. rental?) is another thing.
3. But leasing a truck from the company you work for, then leasing it back to them is something I've never heard of and on the surface sounds rather pointless and convoluted.

I'd love to see the numbers crunched, at least in a comparison of scenarios #1 and #2, for a driver driving X number of miles per month. If the extra trouble is only worth $5K net per year, it may not be worth it to me. If it's worth an extra $15-20K per year net after all the extra expenses and time requirements of an o/o, it would probably be worth it to me. If trying to figure out who pays what expenses in scenario #3 where there are two separate lease agreements going on with the same party becomes a major headache, it probably wouldn't be worth it to me. I don't know why anyone would mess with such a situation. You'd have to spend all your off time bean counting to see if everything was done right. I suppose it might be worth it over time if their lease payment to you covered your lease payment to them. Then you could make a case that they were eventually paying off your truck for you if you stayed with them long enough. (by effectively paying your lease for you, which still seems convoluted).

Maybe I should forget truck driving and go into the leasing business.

I've never heard anyone speak of this scenario. The $1500 check is what you get for the miles you drive, and the settlement check is the result of a deal you worked with some driver with the same company you drive for who agreed to drive the same truck you drive when you're not driving it (which sounds like a more complicated TEAM arrangement), or did you buy a 2nd truck and you lease it to a driver whose driving for the same company you drive for? If it's the latter, then you must be leasing it to him/her for less than they can lease for from the company. Is there a balloon payment or buyout option at the end? How long is the lease? I wonder how much this goes on in the industry, where you effectively have two businesses going on. There's your driving, then there's you own little mini-fleet, with both trucks and drivers operating under the authority of the same company. Did I describe that accurately?

I was reading Mercer's website last night, and it looks like they ONLY deal with o/o's for some reason. Any idea why they'd prefer that model, exclusively? It reminds me of Southwest Airlines flying only one type of plane. Perhaps it's the advantage of simpler paperwork and overhead to not have to deal with newbies or company drivers. But they are more rare...the only company I've seen in my limited scope which chooses to do that. Other companies will juggle the extra balls. They even mentioned people who have their own 'fleet.' If such a o/o situation brings in more money, I don't know why everyone doesn't do it, unless they just don't need the extra part-time job and the trouble that goes with it. Personally, I'm always interested in what brings me the most dollars per hour for my time. The more per hour, the fewer hours I have to work, freeing up time for an actual life.

Thanks for the information. Definitely some things to think about and investigate further. At my age, it's easy to see myself just getting my one year in, then looking for a better paying/benefits situation with a FedEx, UPS, or whoever since I doubt I'd be doing it more than 10 years. I found 76 year old 'Bob' whose been driving for 50 years and he looks as sharp and happy as anybody. Sitting at home in retirement must not be for him. I doubt he needs the money. I like to see which companies the long-timers are working for, cause that carries some weight when they could prolly be driving for whoever they want, yet that's who they chose. I couldn't quite make out the name of his company on his shirt...looks like Polar Star or something Star but searching the Internet turned up nothing. Maybe you'll know. I think the uniform is a good idea, even if you're only in front of a client shipper for a few minutes. Here's the link. He's at the 1:46 point....
Truckers Left with Limited Places to Park

 

Should this be dumb and dumber?
Cause that what it boils down to. Just stating the obvious.