Debating being a lease operator

I've not done the fleece/purchase so I can't offer firsthand advice. I've owned a couple of trucks in years past. I will say I considered it. After spending many hours reading on here, I won't do it. From my experience as an owner/operator, I don't see much of a chance of surviving with what these deals offer.

For you, I think the biggest thing to consider is what you said "Not sure how long I can keep being a company driver tho". From my research I have determined that most of these deals seem to be nothing more than a glorified driver position with more financial & liability risk for less income.

It appears there may be a few that you might succeed with. I think you would need lots of luck and would have to be willing to work harder or for less, possibly both. You would need to make sure a $1.00 buyout, at the end, was part of the deal. You would need to understand and covet delayed gratification.

Now with all this said, and all your hard work, your future is still in someone else's hands. You may have a bad day next week and make them angry. Then they just starve you out and get a new unsuspecting driver.

I'm only offering my take on what it is. Everyone should analyze it from their personal point of view, know all the risk (I see plenty), and then decide if the odds of success and the reward is worth the risk. I believe in the present economy, there is little guarantee of success, even in a perfect situation and a fleece/purchase is far from a perfect situation.

 

yo dude-DO NOT LEASE...you're just trowing ur money away.....i've got 20yrs+.. owned 5 trks on my on and leased 3. if u really want own-try KNOXVILLE TRUCKS, ask for Jim...500 credit score or higher will get u a used trk of your choice..they are a tad high but they will bank finance w/that score...i'm currently company and will stay that way til the economy does better...BUT~DO NOT LEASE...good luck..

 

Talk to your bank about a small business loan. With appropriate government backing and government secured loans, credit doesn't have to be that great to get a loan. Then look for a good used truck. Take a known to you and respected big rig mechanic with you.

 

If you lood at going this way you want to look for two things.

1. A program that is putting you into older equipment ('06-'07) that you will own at the end. Many of the bigger companies are a true lease with the buyout at the end of three years being more than the truck is worth. This is not a path to being and O/O just makes you have to lease another new truck.

2. Go with a smaller established carrier that you can run company with before jumping into a lease program. You will learn more about the company and the purchase program from the inside than from these boards. And the better companies will make you be a company driver before going lease. And you will also develop your reputation at the company while on the company dime so when you move to l/p you have a track record.

I did a lease with CRE in '06. I did great and most that I saw failed was not because of the company but because of thier attitude. They couldn't get on a good dedicated gig or spend time at the mother ship because of logs or something stupid like that.

But I would not recommend CRE. One of the companies you will never "own" the truck with/

 

I would side with some here that have suggested that you find a better company position that would allow you to get ahead before jumping in. Credit Unions are sometimes better opportunities for loans than general banks. Find a truck on your own and put some down on it and get it financed outside of a carrier lease deal. I have not seen very many good lease purchase deals that didn't take serious advantage of the driver. Find a better job with a smaller outfit, get your credit cleaned up, and then go for a truck.

A smaller carrier that you can become familiar with and get your feet on firmer ground, then you will be established with them when you decide to put on a truck. I would never recommend a person just get a truck and lease on with some carrier out of the truck mag ads. Learn the company before you get a truck to put on with them. Later, when you are well established as a owner, then it is not as big of a deal to move if you need to. But if you go in blind about the company, you are really stacking the odds against you.

I realize that owning a truck has a certain attraction, and if done right, it can be profitable. But there is nothing like taking one's time and getting into it the right way so as to reduce the chance for failure.

 

Well as far as getting a business loan. Hope you have an established corporation. The bank had seen that my corporationhas been in business for a few years. Granted it's not trucking but if your going for a loan against the business it doesn't matter. Also from a bank your credit better be tip top. Mine is not so good but my consigner is perfect. It has still taken a week so far and I don't have an answer yet. Yes it looks good but I ain't signed any papers yet. Honestly from your situation you'll probably either have to lease or go to a buy here pay here. Also what are ya gonna do for a trailer? Can't have the horse and not the buggy. And if you lease on to someone and pull their trailer your in the same predicament. You'd just be a glorified company driver that flips the fuel and maintenance bill. Can you work on your own truck? Not replacing just a light either. I am talking brakes, wheel seals. Things of the like. See what it costs just to throw a set of brake shoes on. Just some stuff to think about. Don't be bedazzled by the smoke and mirrors of 2 bucks a mile.

 

If you just gotta try it. go for it. experience is the best teacher, cause you will never forget the lesson. it can work for you, if you can get into a situation,contract, where if it does not work out to your liking you can walk away & owe nothing, that would be a good thing, no matter how many miles you drive, if it does not make enough revenue after say 4-6 months, & you can turn truck in & walk away without owing anything, you could test your luck, skills & improve on what you think you want.I don't know if any such program exists, but in your position, if I was determined to l/p. that is what I would want. I think. good luck.

 

It all depends on what company you go with.

In '05 I got into a $0 down 0% interest deal on an '03 379 for $80K, today I have a paid off truck. I have several friends that got theirs paid off and a few more that are getting close. I have also seen quite a few turn their trucks in during a slow winter... I guess that some of us were just more dedicated and willing to do without when it got bad. One winter I even had to borrow about $3K to make my bills.

If you get with a good company that wants to see you succeed and you are dedicated to seeing it through you can make it, if you treat it like a business. I saw one guy turn his truck in about 6 weeks after $3K worth of chrome and lights showed up at our shop from Wildwood.

Also when I started, the owner was wanting to build his company with O/Os and not company trucks.


BTW...if I had $10K in my escrow and just met a stripper and wanted to take her to Vegas, as long as I had that much in my escrow acct they would give it to me... whatever I thought was needed for the truck was OK to spend my money on.

Along the way he also loaned me $20K for an inframe at Cat at 0%.

 

I became an O/O leased to Swift about 7 years ago and it worked out well for me. At the time I aquired my tractor I had very good credit, but less than a year's experience. This lack of experience was the major hurdle I had to cross in getting a lease worked out. I was able to lease from a local leasing company that looked at my credit worthiness and not at my lack of experience. It seems to me that you are just opposite to me, you have the experience, but not the credit rating.

The key is to keep your expenses down. The two main ones that you control are fuel and cost of the tractor. Are you getting at least 7mpg out of your company tractor? If you are not then you will fail. This is the absolute basic, if you can't drive better than the average company driver then you will fail. OTOH if you are running in the 7's pulling full loads you will be fine.

The second is buy a tractor that you can afford. Look to get the oldest, least expensive truck, that the company will let you bring on board. All trucks, reguardless of age, require maintence. People get fooled by the idea that a new truck will somehow save them from any costs, but it just doesn't happen that way. While a warrenty may save you from the cost of parts and labor, it won't save you from the loss incurred from time lost due to repair, or towing or things not covered.

Yes, there are times that an old truck will nickel and dime you to death, but I've seen too many cases where a new truck sits day after day in a shop waiting for a repair because the parts are not available, or no one knows how to fix it yet. A new truck can crater your finances because that $500 or more a week vig needs to get paid.

1. work very hard at getting your truck financed outside of the company you drive for. Your credit may suck, but so do most other drivers. If the company lets you go, you want to be able to keep the truck.

2. Minimize all of your costs. You're really not working for a trucking company, you're working against an oil company, or a bank, or an insurance company. These company's are not your friends, they are attempting to be your boss.

3. It's ok to buy your job, as long as you understand that's what your doing. l/o's don't make much more that company drivers, and they take on a lot more risk to do it. What you gain is more control over your life.

Good luck!!