Why a lease purchase can be a great opportunity!

nax · Feb 10, 2017

@Western flyer ...cool beans...

A walk-away lease would help the lessee (trucker) avoid this guy's scenario

I NEED TO GET OUT OF MY 2016 VOLVO 780 LEASE

Thekid0902 · Feb 10, 2017

nax said: ↑

@Western flyer ....if I must explain...

This is what I said:

"IF, I repeat, IF the lease is a true walk away, then you are waaaaay ahead of other L/O's out there."

Leases are either walk-away or NOT.

Some L/O are not in TRUE WALK-AWAY leases....and hence, their credit get screwed if they try to get out.

The OP confirmed that his KLLM lease is a walk-away and thus, will not have credit issues if he chooses to move on, before the end of the lease term.

That is why I said he's "waaay ahead" of those that did not ensure this clause in their lease agreement.

Keep in mind that "walking away" may mean forfeiture of down payment, and all the monies paid during the lease term, plus potential lease termination fees.....but at least, the "burden of feeling stuck" is no longer there.
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There was zero down with the lease I did have to pay a 1500 bond payment which came out of my settlements at 50 a week and will be reimbursed along with my maintenance fund if i bring the truck back with reasonable wear and tear but other than that I have have come out of pocket for nothing.

Old Man · Feb 18, 2017

I don't have a dog in this fight, I know that running a new or old truck running lots of miles and only bringing in $120k a year is ridiculous, should be 175 to 200 at the least. All you are doing is making the company money and helping keep the price of freight down.

Annonymous · Jun 16, 2018

Thekid0902 said: ↑

I see many posts stating that lease purchase programs are a total rip off and every driver should avoid it at all cost. I beg to differ in the lease purchase discussion simply because of the hidden opportunity of being able to leverage a lease program to actually becoming a true owner operator meaning you really own the truck.

Let me say this first no you will not make nearly as much as a true owner operator but allow me to explain how I am using a lease purchase as leverage to get the capital needed to buy a truck myself.

First things first is when signing my tractor lease I signed up using a business name with an ein number. There's a good reason for this the ein number is similar to a social security number and what does a social security number attached to it??? Your credit score. So as opposed to running it through my social it shows that all revenue is circulating through a business entity.

Here's the kicker at the end of the year I will receive a 1099 misc for my trucking company showing the gross income my company produced for the year. At the end of the year my company will have grossed around 120k. Did I actually get to see that money? Nope but that doesn't matter. All lenders want to see is that your business has produced x amount of dollars. I paid a company $1500 for business credit counseling and after 6 months will have enough business credit to recieve a line of credit. With the right business credit score you can have a line of credit for 3 times your gross and as I stated before the gross is the total revenue the truck produced. So at 120k for the year that will give me an opportunity to receive a 360k line of credit.

A line of credit is not money in hand but money available when needed for a business expense so let's say you just decide to pull out 10k and put it down on a used truck. With another 350k available you will have no worries if something major happens to your truck. So with that being said I have to say a lease purchase program can be good if used the right way. I've been a lease operator for 10 months and when I originally started did not see the hidden opportunity. It's been almost a year of ups and downs but you can make it work but if you want to become a true owner operator look at the bigger picture.
And I'm sure many people will say "there's no way you can make it under a lease for a whole year" well if me taking home on average about 900 a week after expenses and having just received my cdl less than a year ago is not making it then I can't wait to see what making it looks like.
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Hows the lease going

SavageMuffin · Jun 16, 2018

I know this is fairly old, but if OP is reading, or anyone else leasing through KLLM is reading, as long as you don’t completely muff the truck up you’ll get your escrow/maintenance money back.

Knowing what I know now though I would never do it again.

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