Lease purchase experiences? Is it Worth it?

Having a new truck with no note payment, a desire to work (drive), good driving and money-management skills, and maybe a spouse co-driver, and leasing on at the right carrier ... a lot of money can be made and set aside. A lot more then interest is ever going to pay in the current economic world. You'd be better putting the cash under a mattress then in a bank, at least there it can be protected and gotten to in the event of a major economic crisis. It's going to lose value just as fast either place. Interest rates of virtually zero, and current economic outlook says "spend it (invest) wisely or lose it"

 

Ok, and "what if" a catastrophic health illness comes and he can no longer work, and does not have adequate health coverage or needs long term nursing home care, and cannot sell that "new" rig due to the price he wants for it (book value), and it sits for weeks on end?

I know what I'd do, what others do, oh well.

 

It's pretty much the modern day version of sharecropping. You're paying the people you work for. They control how much you're going to be able to run. For every one success story,there's probably 10 who go into the dumper? Sound like a good idea? 😉

 

Check out the Schneider Choice program. Pick your loads off a load board and control your income. I would never lease on to a carrier and get dispatched like a company driver. Choice board has loads paying very well in some areas. Tons of info about this in the Schneider area on TTR.

 

One very important question you have to ask yourself...

Does it make sense to lease a truck from the same people giving you your freight?

 

That's sort of the point of not having a note payment to contend with (or a very minimal payment). You have time to wait it out or sell it right assuming you put money in the bank like you were supposed to. If trucking is in your blood and you had a good driver resume, and you had lots of money, to me it makes no sense why you would not put that money to work. A truck will always have value in it, and the ability to generate $1.50+ per mile revenue at the right outfit? I'll take that.

With a good driving and business head and good health, dollar for dollar, it's hard to make $150k pay off faster then in the right trucking gig. Other then perhaps house flipping, and that can be more volatile. Not being able to perform the labor side of it yourself (health/family issues) changes the entire dynamic, though. Agreed.

I know this is a far-fetched concept that few will ever potentially experience but it's where the conversation led.

 

Somehow I doubt greatly that this would work out this way at all. What I don't doubt is that they told you this, but I have a close friend that went though something very similar just recently... He owns his truck and has his own authority... He is leased on with a company. He wanted to have his cousin drive on weekends hauling grain hopper and cattle pot, part time to keep the truck moving(a entirely different field and trailers from the company he is leased to now).

However, his lease is written in such a way that even using the truck under his own authority... he would still be required to pay his percent to his lease carrier.

Bottom line is that they(these lease companies) cover their bases, and isn't as it seems even when the owner operator seemingly holds all the cards.

 

But if the truck sits for too long, do not forget, there are yearly taxes on it as well. Like where I live, "property taxes" is what it is called. the longer the truck sits (and only assuming along with it's base plate) the taxes will add up till the plates are removed.

yes, a truck will always have "some value", but when the vultures know you need to sell it, they swoop down for the kill.

Good driving record, good health and lot's of money in the bank, are of course assumed to be in place. How long will it take to not only get the contract that pays the $1.50 (or more) per mile but at what "speed" it will take to make it up to top pay?

I answered some of this above, some people 'think" they have a good business head. But sadly, many do not, as all he see's is a shiny new rig, he get's to add more chrome to, blowing away any budget and savings.

Yes, in fact a long, long time ago, and as a member of the OOIDA, I along with the many other members get the monthly magazine, along with once getting other well known trucking industry magazines and periodicals, that I could actually gain words of wisdom by. It was actually mentioned in one of those industry periodicals, such a thing about "coming into lots of cash suddenly and what to do with it".

It was from that article that expressed the safer thing to do would be to bank that money, as the depreciation of the truck and maybe the trailer if also bought, was a losing proposition. Buy a home instead, which increases in value and I agree with what I had read. I do have business management experience myself, just not trucking, but the principles are of the basic same. So from a business standpoint, to take all of that 'sudden cash downfall", and invest it into a rig would lead to ruin sooner or later. Why would anyone want to "pay to work", rather than "make the money work for them"? Once a big rig is purchased, if you drive it, you are paying to work, if you hire someone, you are still paying out.

Things like savings, bonds, T-Bills, would be a much better idea. A "small or medium" sized withdrawal for a down payment would be better, as this would then allow for credit building, something of which not too many people ever think of. Many of us do have good to great credit, but some do not. If no credit is established for the lower credit rating people, then how do they pay for things on the road? Cash would be nice, but anyone dumb enough to carry (say) $5,000 cash with them?

too many variables, i know, too many debates as well, I know. But for me, and frankly since I am about as close to retirement as I can be, the sudden windfall of cash, goes into the bank, and after years ago of doing homework on the feasibility of buying a truck, parking it, repairing it, etc,etc, the numbers just do not add up.

It can be a "windfall" to get such a great paying contract, nearly right out of the gate. But how many actually get such a job so quickly?

 

I don't think anybody ever said "trucking is an old man's game". And I don't think anybody ever said "independent trucking. Any lazy moron can do it"

 

thats true but after you pay off that truck and its urs then you make all the money, and picking ur own loads is better than having someone sending you loads.