Hidden Downsides to Leasing

Discussion in 'Ask An Owner Operator' started by ElijahJohn1, Jul 11, 2019.

  1. ElijahJohn1

    ElijahJohn1 Light Load Member

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    As I look at the leasing model, specifically conventional/operating leases, I don't quite understand why it isn't more prevalent in the industry. No down payment, repairs are generally covered, and you avoid the downfalls of depreciation on the asset. Besides not being able to take advantage of dep. tax rules & being able to sell the asset, what are the downsides which leads to people still buying trucks used or new?

    I mean literally leasing a commercial truck, not leasing on to a mega
     
  2. Old Man

    Old Man Road Train Member

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    When you buy the payments end and you own the equipment. Need to bail out you sell, don’t have to break a lease and get hammered with fees you can’t afford.
     
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  3. buddyd157

    buddyd157 Road Train Member

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    repairs are NOT generally covered during the warranty, if you get a scratch or dent. that comes out of YOUR pocket. same thing if you have a pet dog or cat and either one chews up the interior..no warranty pays for that...YOU DO.

    also when you lease, you are under the control of the company..they control the freight, NOT YOU, and they can starve you out at any time, especially if you cop an attitude or are consistanly late or turning down loads...then tell us how you are going to make those AUTOMATIC truck lease payments....?

    buy your own truck, THEN lease onto a company and tell them to take a flying leap, when ever they mess with you.

    as a leasee, you are pretty much reamed up the arse, and you will have to take it with a smile.
     
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  4. MartinFromBC

    MartinFromBC Road Train Member

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    You pay out a lot of money every month for the length of the lease, and at the end they still get the truck back, leaving you empty handed.
    Repairs are NOT covered, but they will charge you for every little thing wrong with the truck at the end of the lease.
    If you get hurt, have a heart attack, or just want to quit working, and try to turn that truck in early the penalties are going to hurt bad.
    They usually have other restrictions as well, things like a mileage cap, etc.
     
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  5. uncleal13

    uncleal13 Road Train Member

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    Are you referring to a full maintenance lease?
    Our company does that. Six Volvo's and six Mack's via Hornoi Leasing.
    Company pays flat monthly payment plus 7 cents per kilometre. That's it. Hornoi takes care of all maintenance, repairs, tires, everything.
    Plus if a truck does go down they bring out a replacement to use.
     
  6. ElijahJohn1

    ElijahJohn1 Light Load Member

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    I'm talking about leasing from like Penske or Ryder, not a lease to a company, just leasing the semi. Maybe I misread the websites but that was the impression I was under
     
  7. Midwest Trucker

    Midwest Trucker Road Train Member

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    I’ve found leasing and owning to cost pretty similar. Leasing I would say is a bit higher cost though since they tack on the mileage charge. Normally that’s around 12 cents per mile.

    For me I like having my own equipment because it’s MINE. I can sell it, keep it, do whatever I want with it and have a good amount of equity at the end. With leasing it’s essential renting and no pride with it. Everybody has a white Freightliner.

    Also, for me one big downside to leasing is when you have a break down. You have to call them and ask what to do and where to take it. This creates a lot of inefficiency because all they care about is finding a place and situation that works for them. Your at their mercy. I like to have full control over what I’m doing and make decisions quickly.

    Edit: I’ve rented trucks before and got a taste of what it’s like and I hated it. Even something as little as a flat tire becomes a big deal. It’s ridiculous and dealing with people who then have to deal with their boss who deals with their boss while I’m waiting to get a decision is just too much for me not to mention would be very annoying for my drivers.
     
    Last edited: Jul 11, 2019
  8. buddyd157

    buddyd157 Road Train Member

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    you can get a lease from either penske or ryder...my companies did..however, maintenance is extra. warranty ONLY covers issues with the trucks, however, it usually DOES NOT include a replacement truck (rental while yours is in the penske shop OR the DEALERSHIPS shop), UNLESS YOU PAY for that extra as well

    so unless YOU have a HUGE bankroll, leasing for either penske or ryder is NOT for you.

    and if you HAD a huge bankroll, you'd be foolish to lease, and not buy.
     
  9. rollin coal

    rollin coal Road Train Member

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    You're a wannabe start up one truck business? You're wanting to hire a driver for the truck? There's not enough money in trucking to buy one truck and hire out the driver. It doesn't work and will lose money. If you're going to run one truck profitably you're going to drive it yourself and even then the competition is fierce. The reason one truck guys, never mind startups, don't lease full maintenance trucks from Ryder and Penkse is it costs way too much money. You could go finance the most outrageously loaded up brand new Peterbilt or Kenworth out there and it would be cheaper than a full maintenance lease (with lots of fine print!) than Penkse/Ryder. Penske and Ryder make these full maintenance lease deals with established large companies who have a lot of buying power. Those companies get deals everywhere they go. One truck guys, as usual, get no price cuts and always pay a premium.
     
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  10. ElijahJohn1

    ElijahJohn1 Light Load Member

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    Once I leave college I'll have enough to purchase more than one truck on financing, I was just curious about the leasing. Thanks for the lease info opened my eyes
     
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