How do the owner/operator lease-truck-back-to-company programs work?

Discussion in 'Questions From New Drivers' started by haulit6272, May 5, 2019.

  1. haulit6272

    haulit6272 Light Load Member

    73
    13
    Jul 28, 2018
    0
    I've read a lot of negative stuff about leasing trucks from trucking companies you drive for, but have read virtually nothing about buying a truck, then leasing it back to the company you drive for. Is this another form of owner/operator arrangement? It's my understanding that being an owner/operator commands more money per mile since you've committed to the additional expenses of truck ownership, but not necessarily getting lease payments from the trucking company along the way. What advantage is it for a trucking company to lease a driver's truck? About what percentage of drivers do this, and why don't more do it? Am I right that there are at least two forms of owner/operator arrangements, one involving the lease back, and one that doesn't? How many arrangements are there and why are they all needed?
     
    Lepton1 Thanks this.
  2. Truckers Report Jobs

    Trucking Jobs in 30 seconds

    Every month 400 people find a job with the help of TruckersReport.

  3. starmac

    starmac Road Train Member

    6,644
    12,511
    Apr 11, 2019
    Fairbanks Ak
    0
    Any time a truck sells you a truck and leases it back from you, it is because they get you to run said truck cheaper than they can hire a driver for it. They do not sell or lease you a truck out of the goodness of their heart.
     
    Lepton1 Thanks this.
  4. tscottme

    tscottme Road Train Member

    9,345
    15,843
    Jul 25, 2008
    Nashville, TN
    0
    The advantage to the trucking company is their money is not spent on buying/repairing/insuring the truck but with a lease of a truck/driver they have a guarantee a truck will be available, if needed.
     
    Lepton1 Thanks this.
  5. Lepton1

    Lepton1 Road Train Member

    12,648
    25,553
    Nov 23, 2012
    Yukon, OK
    0
    One of the primary reasons why drivers sign up to lease a truck from the company that dispatches them is because they have poor credit. A typical lease arrangement like that costs about $1000 a week. It is a way for some drivers to repair or establish credit and get their foot in the door at the bottom rung of being an owner operator.

    If a driver has good credit, then leasing a truck from a company is a better option. You can then lease it on with ANY company that hires owner operators. If you don't like the situation at XYZ Trucking you can delease it and go to ABC Express. That isn't an option if you lease the truck from the company that dispatches you.

    Many owner operators do lease their truck from a leasing company. They like the idea of a warranty and in some leases they can get a replacement truck if their truck goes into the shop for an extended amount of time.

    Most owner operators buy their truck. This requires having a down payment and sufficient cash reserve for maintenance and repairs.
     
  6. Chinatown

    Chinatown Road Train Member

    59,385
    118,649
    Aug 28, 2011
    Henderson, NV & Orient
    0
    Lepton1 Thanks this.
  7. pavrom

    pavrom Road Train Member

    2,670
    5,980
    Apr 29, 2012
    NE illinois
    0

    Dont thank me ....just find this hour to finish the video , you can start at 3:30
     
    uncleal13, Otrliveload and Lepton1 Thank this.
  8. haulit6272

    haulit6272 Light Load Member

    73
    13
    Jul 28, 2018
    0
    Given all that you described...., are the following scenarios right or wrong, just to name a few of them?
    Hypothetical "Ted" is thinking about becoming some form of an owner/operator and he's open to being dispatched by anyone, but needs to know their offerings and pay scale before he signs on the line. With each and every trucking company he 'researches,' he has to find out the following, and maybe more...before even considering benefits, how and where they operate, etc.

    1. If I lease a truck from you, what are the payments and terms and how much do you pay me to drive it?
    2. If I lease a truck from Trucker Leasing Co. and do your runs, but you have no need to sub-lease the truck from me, how much do you pay me to drive it?
    3. If I lease a truck from Trucker Leasing Co. and do your runs, and you want to lease the very truck I'm also leasing, what are the lease terms you'll give me and how much will you pay me to drive it?
    4. If I own a truck outright, but you don't lease it from me, how much will you pay me to drive it?
    5. If I own a truck outright, and you lease it from me, how much lease money per month do I get, and how much will you pay me to drive it?

    Just to name a few. Does Ted avoid all this mega-research, (using up his off-time for 6 months calling trucking companies), by first deciding what his relationship with his truck will be, how he wants to use or share it, then calling company recruiters and telling them what he has, what he'd like to do with it, and they give him a pay scale? It seems to me that looking into companies with so many variables yet to be determined would be overwhelming at least, and tick them off at worse cause they won't have time to play 'what if' games all day.

    I'm starting to think that trucking companies who list the pay rates on their web sites (i.e. a penny more per mile for each year you work for them) are only showing the first page of the first chapter of the book entitled "Here Are Your Options."
     
    Last edited: May 6, 2019
  9. Lepton1

    Lepton1 Road Train Member

    12,648
    25,553
    Nov 23, 2012
    Yukon, OK
    0
    Personally, I would never lease my truck with a company that pays by the mile. I would rather lease with a company that pays 80% or more of gross revenue (anything billed to the customer). I would want to know their average billing rate per mile and be in a non forced dispatch situation, where I can choose my loads.

    Companies that pay a fixed rate by the mile are dirt cheap. You see many companies advertising a buck a .ile plus fuel surcharge. It's enough to make good driver wages, but there's no profit. Your goal is to make $2/mile or more for all miles, including deadbeat.
     
    haulit6272 Thanks this.
  10. Gdog66223

    Gdog66223 Road Train Member

    1,871
    2,559
    Dec 30, 2017
    Coal Town
    0
    A lot of guys are lured into the Flease Purchase rig because they don't know any better.
     
  11. REO6205

    REO6205 Trucker Forum STAFF Staff Member

    10,538
    44,983
    Feb 15, 2014
    California
    0
    Something else to think about....If you lease a truck from a trucking company that requires that you haul for them and only them you're locking yourself into position with few options.
    If the trucking company you're leasing the truck from is running their own trucks with their own drivers who do you think will get preference in dispatching and good paying loads? They'll keep you going enough so that you can make the lease payments but the high dollar freight will be on their own trucks.
    You'll always be one breakdown away from not being able to meet your payment schedule. What happens then?
     
    Western flyer, haulit6272 and Lepton1 Thank this.
  • Truckers Report Jobs

    Trucking Jobs in 30 seconds

    Every month 400 people find a job with the help of TruckersReport.

  • Draft saved Draft deleted