An in depth look at the various lease programs

i dont to much care for fl especially not ft perice i spent a entire week down there at the pilot to say when i finallly got loaded out that was my last load for them lol

 

you won't sit in FL with JCT we have lots of freight in FL

 

LOL.......

 

It still blows my mind how many people fall prey to the large companies and their lease purchase schemes. They will use all sorts of excuses to justify their financial stupidity with the most common one being; "I have had money problems, and bad credit and thus can't get a truck any other way.".

If they really believed that statement, that says one of two things.

First, they probably have no business being in business. That would tend to explain the very high failure rate of lease purchase programs.

The second is the lack of research on their part. If prospective owner operators would do their due diligence and spend some time researching other avenues, they would find several third party lease purchase deals that are not tied in any way to a carrier. This means that they could take the truck wherever they wanted, whenever they wanted. I have found several of these deals that even have very favorable terms compared to ANY carrier based lease purchase that I have ever seen, and they have none of the restrictions.

I was recently doing some research for a friend and found a truck specific finance company with VERY easy qualifications. Credit score doesn't matter to them. They look at job history, whether or not your debt obligations are current today(if you had a rough time a year ago doesn't matter to them, what matters is if you overcame the difficulties or not.), and that you haven't had a bankruptcy in the previous two years. If you could meet those terms, and could come up with 5-10% down, they could offer financing at a competitive rate with no "gotcha" clauses.

Another negative to a carrier based lease purchase...In the current economic climate, used truck prices have fallen like lead balloons. In fact, on average, used truck prices have fallen 41% in the last six months. Have the lease purchase plans at carriers been discounted to reflect the market conditions? We all know the answer to that question. The OEM dealerships are discounting prices on new trucks as much as 20% just to attempt to diminish the glut of inventory sitting on their lots. Once again, are the lease purchase carriers discounting their prices to reflect current market conditions?

My point amidst all of this rambling is simple. Lease purchases have never been a great idea, but they make even less economic sense now than they ever have in the past. There has NEVER, in my short time in this industry, been a better time to BUY a used truck.

I don't wish bad on any of you guys that are currently in a lease purchase, in fact I wish you the best of luck. Completing a lease purchase can be done, but it is a tough row to hoe and is getting even tougher than ever before.

For those of you whom have not yet made the jump to leasing, I beg of you to do some more research to find a better deal. They are out there.

Ramblings complete.

 

Hey King,
Do you know anything about leasing with May trucking out of Oregon?

 

LP deals are quite simple, all you need to do is average a little over 400 miles a day, every day, for 2 to 5 years and remember the driver (you) gets paid last.

 

KH I have been in the business for 35 years and if my kid wanted to my business advice it would be don't do it, but for someone that has no ideal how hard it is to make 150,000 miles a year for 2 to 5 years straight without time off, good luck. Do the math you have to average 400 + miles every day 365 days a year to make it work. No time to be sick, vacation, be home for special events, just chase miles.

It is very complicated, more than you can understand. Do I care if you try and fail? No, go for it . What percentage complete their lease? 1,5, 10%? I do care if you drag you family down with you.

After 3 years you have a wore out truck worth 15- 20 thousand, maybe a trade value around $8000. If you work as a company driver and save .03 per mile you will have the same amount of money in three years, then pay down on a truck you own.

I will give you some business advice. 90 cents a mile is 90 cents a mile no mater whose name is on the door, they are all the same, just pick the color of your truck and go for it, and don't complain when you get screwed over, they are all good at it and will have someone else in "your" truck before the seat is cold.

In the last month I have met 3 driver doing a LP deal that didn't have any tools in their truck, not even pliers, they were asking to borrow from me. I you do it at least take a basic tool kit along.