BEST LEASE PURCHASE??? (to head me towards ownership)

lord jesus, those flatbed rates are low.

 

So they even contradict themselves, because even at the low flatbed rate of $1.46 mile and the 3,200 mile average, that equates to $4,672 week. But they say their drivers avg $3,490 ???? That's roughly 2,400 miles a week.......

Now add in the $900 week payments (including all the costs) and your at $2,590. Subtract fuel at the 2,400 miles @ 6mpg (and these are HHG miles, not actual miles) and your down to a whopping $1,070 profit and that's not adding the 10% OOR miles, and other things such as SE tax..... So basically it is a company driver with O/O headaches and overhead???

Also, do what you want with your truck, but I would NEVER train anyone in my personal rig. All that wear and tear is not worth the couple extra hundred bucks.

 

Just another way to question my post... that website is old and outdated. I have an amortized schedule IN my contract. I can pay it off any time, no penalties.

The gross revenues are averages from a few years ago. It is also advertising, so expectations are factored. If I told you $3500 gross per week, and you averaged $4200, you'd be satisfied with the results. If i said $4300 and you averaged $3500 you'd be unsatisfied. That's advertising.

One other thing that bothers me is this rate expectation. Every O/O is making $2.50 or more per mile, and any less the brokers and carriers are screwing the drivers. My take is that there are industry rates that change with location, time of year, and truck availability. If you have a good dedicated route or contract that has you rolling in the $$$, good for you. Most of the rest of us are looking, but until we get there, we have to run inside someones system & make it work.

I am making it work on an average of $1.67 per mile reefer running. Paying the truck, building the company & putting the family in comfort is being achieved, and I am getting home every 2-3 weeks. Made enough to take two weeks off to hunt with my boys. I train because I was an instructor for the Army and i'm good at it. Stop trying to twist my story to fit your "failed lease" narrative.

 

Why would a company like Prime leave up a page on a web site that is old and outdated?

 

I have no idea.

As far as buying the truck after 104 weeks, that is the standard lease, not the lease purchase. See how dialogue gets so convoluted? I like direct questions, like the balloon payment question. As far as the rates go, I watch freight rates from the other side (brokers) and consistently find I am right above the averages.

 

You'd be surprised how many companies in all lines of work neglect parts of their websites.

 

some of these drivers never done a lease and those that have failed realbad causejust didnt understandthe lease terms and didnt understand howtomake it work.just compare companiescarefully and do what you want. dont let negative talk keep you from it. just research and plan make sure its for you. alot of drivers are successfel at lease purchase.

 

My whole dig at lease purchase, failure or successful, you LP drivers help keep rates artificially depressed. You run for unprofitable cheap rates that no carrier hauls for but they will gladly keep you rolling cheap so they can artificially cut rates and make an easy 20-30 cents a mile off your blood and sweat. Hurts everyone.

 

While I don't necessarily disagree with some of what you are saying, the reason some may not understand the terms of their lease is because they don't read it. Everything should be spelled out in the lease agreement. No one should sign anything unless they fully understand it. Most who become involved with leasing think that it will be a painless way to own their own truck. They go into the lease with "stars in their eyes." They never sit down and actually run the numbers to see if it is even feasible for the program to work. Some will sign anything if they think that there is even a remote possibility that they can one day "own" their own truck.

When you sign a lease, you are making a financial commitment. I disagree that there are a lot of drivers who are successful at lease purchase. There is a very high failure rate, primarily due to these drivers not fully understanding what will be required to make the lease work. I would love to see solid figures concerning the success and failure rates of leases. I had an executive with Prime tell me once that they lease the same truck 3 times before someone completes the lease. That means that 2/3 of their lease operators fail and only 1/3 succeed and complete their lease. I believe that I have only met 3 people who have told me that they completed their lease and got the title to their truck. I have been in business for over 40 years. I don't consider that a very high success rate. I have no doubt that there are more who have completed their leases, but it is small.

Before spending money you need to sit down and look at the numbers. OOIDA has a spreadsheet for lease operators to download. They also have one for owner operators. You can take their spreadsheet and plug in the numbers from the carrier from whom you are thinking about leasing a truck and look at the numbers. One advantage to using a spreadsheet is the "what if" feature. You can change figures to see different outcomes. Most carriers who do leases should have average miles driven by their fleet. You should understand that what they present is only an average. There will be some who run harder and some who run fewer miles. Trucking is cyclical. There are times of the year when miles will be good and times when miles will be low. During the good times you could drive 3,000/week or perhaps more. During the slow times you may only get 1,700-2,000 miles or perhaps even fewer miles. I use 2,500/miles per week when doing estimates or projections. Using the spreadsheet, you can use the low miles for the slow times and see how the numbers come out.

Way too many new drivers will jump into these leases without really understanding what they are getting into. Part of it may be that these companies only present the best scenario to potential lessee's. Some also only hear what they want to hear. Even at $1/mile, running 3,000/week sounds like a lot of money. What some don't consider is the cost of making that revenue. When you spend $0.60-0.83/mile for just fuel, it doesn't leave much for profit. Now, most won't be running for $1/mile due to the fsc. But, there are also other costs that many don't consider. And, there are those who think that the only operating expense they have is fuel. When you use a spreadsheet and plug in the numbers, it is much easier to be objective as to the profitability of any lease purchase program.

One other thing to remember when looking at the numbers. There will be times when you may want to take some time off, such as vacation or the holidays. The lease payments and other deductions will go on whether the truck is moving or not. This is where some begin to get upside down with a lease. When you come back, you will be behind on your payments. It could take a few weeks to get back to having a positive cash flow. Whatever your payments, take a week off and you will owe 2 weeks of payments when you come back. That means that you could have a negative cash flow or no income until you get your payments caught up.

Leasing a truck sounds like a great way to become a truck owner. You can get into a truck with nothing down and weekly payments. It sounds very easy. If you lease a truck you can expect that the truck will own you until the lease is complete. In most cases, you will also pay much more than the truck is worth. If you want to do a lease, do the research, talk with some who have completed their leases at the carrier to whom you want to lease, run the numbers, so that you can make an informed decision.

 

I agree G/MAN, I think if you going to sign something THAT important, that will affect your livelyhood for years and years, that spending a couple bucks on a lawyer to read it over and maybe break it down for you would be a good investment.