TRANSPORT AMERICA LEASE PURCHASE

What happens when that paid for truck has catastrophic engine failure? T Trucker not disagreeing but my point is a lease can be less stressful and fact is if yoire hauling freight for yourself for under 2$ a mile you might as well drive Company

 

Right but what happens when something happens with a new truck? Any of the countless issues with emissions. I'd think having a truck with no payments is far less stressful then having to make those lease payments week to week. And yes the warranty might cover emission issues but it won't cover your down time while the shop your at plays hit or miss because nobody has figured out these new trucks. There are pros and cons to both, but IMO the smarter route in the long run would be to buy a pre emission truck. Even if the LP is a success then you end up owning a truck with 500k and thats near the end of the road for new trucks. Why do you think all these big companies rotate the fleet at around 400k. And it's impossible to find any LP program that pays a flat rate higher than 1.20. Most of the companies pay .90 per mile!!! How in the world is that worth it?!? I'll never understand that.
Im for a good deal but most companies dont offer a good deal.

 

Yeah, I agree with you on a lot of that. I have been eyeing those Schneider gliders with the S60 Detroits in the low 300's. Leases are good in the correct scenario. Yeah pulling someone elses freight even with a paid truck and their insurance at 1.40 is honestly barely covering expenses over the long haul.

 

Been on the road for 7 weeks now and nothing on my first week there perfect out of shop truck cost me over 2000$.plus I had 1300 on maintenance account today I took some mayo and mustered out of pilot hotdog thing and smoldered on slice of bread haven't paid any bills and looks like I won't be getting any for another two weeks figure the rest.

 

Paid for truck breaksdown, you pay parts, labor, hotel + lost profits.

New trucks making payments you pay a monthly + hotel + lost profits.

pick your poison.

The breakdown does not have to be catastrophic, try a new radiator and water pump and a week later a new tire blows out .....two weeks later the clutch arm wears out (initial diagnosis is you need a new clutch to change the one that was installed 5 months earlier....then when they begin the disassembly they see the real culprit)....then the cruise control mysteriously starts turning off by itself and when you go to park the brakes don't fully engage....or the fifth wheel decides to come loose!!!! (all this happened in 45 days....total bill $ around 4K....

Trucks like to breakdown, especially older trucks, they want a new part every week for about the first 12-24 months....then, (hopefully) they settle down.....

You can buy newer, in better condition or older and re-condition it....make your choice and live with it....but understand , you'll be paying either way....

 

If you are operating a trucking business, which you certainly are if you lease a truck, then itemizing taxes isn't really the issue - you would need to complete a Schedule C for the business if you run it as a sole prop, or if you form an LLC you'd do a corporate tax return and transfer the profit or loss to your personal return. Of course the lease payment is entirely deductible from income as a business expense.

That doesn't make leasing a better deal than buying though, as you seem to imply, dear Air Breeze. True, a loan payment isn't deductible. However, depreciation plus interest is...and that more or less takes the place of a lease payment deduction....not 1=1 dollar for dollar, but it is similar. Which is a better deal for you would need to be calculated, but in general, purchasing is better. But all the terms and conditions need to be considered...what is the interest rate on the available loan? What is the effective interest rate built into the lease? Is a down payment required for the loan but not for the lease? Are credit standards different? Many if not most of the trucking company lease deals are made with drivers who couldn't qualify for a loan, and they most often make these deals to recover better money from their used equipment than they could if they sold them for cash. In some ways it makes sense from this standpoint - if a company tried to keep older, higher mileage equipment on the road longer, the typical driver would thrash the equipment and it would become unusable before long. But if they transfer the maintenance overhead to the driver, the equipment will likely be treated with care and will typically last longer...in any case, the driver is stuck with the repair risk instead of the company.