How much did you really get paid as a lease owner?

You get paid .90 per mile ... the $1.53 is only for short runs, either a 100 or 150 or less. First, those runs are rare. Second, thankfully they are rare.

They are money losers. There are exceptions, but as rule, any L/O with a backbone will tell the DM to go fornicate with himself if he tries to dispatch you one one.

 

You should never get into a lease purchase deal. The company is the ONLY one that will make money on the deal.

O/O's don't really make much more than company drivers to begin with. In addition lease purchase drivers have to pay a lot higher payments..some with balloon payments to where you get locked into the deal and can never get it paid off.

I have lots of experience as a company driver. Being an O/O is much better for me but still the money is not what it should be for all of the responsibilities.

The best option is to save up..pay cash for a truck. There's some out there that you can get for way under $10,000. Then get on the road with a good company. Run the truck all you can....fix it up as you go....save up and get a better truck...then sell the old one and put that money into the "new" one and keep building.

I'm anti financing. But borrowing money on a truck in "hopes" of making a lot of money is a silly idea.

It's best to have a paid for truck with at least $10,000 cash extra in the bank before starting out as an O/O. Just my opinion.

I got a 04 KW with 700,000 miles. I paid cash and bought it from a reputable KW dealer. Still i've had almost $3000 in repair bills in just the first 2 months of running it.

I got lucky. Just think of the guys that have had a clutch, tranny, rearend, or engine go out in the first month after purchasing the truck...believe me it happens.

 

Your way off on your fuel. No matter what the company says you should EXPECT your fuel to be at least 45% to 50% of your GROSS. Meaning if you GROSS $3000 a week then EXPECT to pay $1500 a week for fuel.

Trust me I ran the numbers like you are doing before I got into becoming an O/O. The numbers I had in my mind didn't match up the the REAL numbers in the REAL world.

Here's a few numbers for you to ponder on. My first trip out with my KW as an O/O. I blew the exhaust manifold gasket and a flexpipe. I had the overhead ran on top of that. Total bill $1320. Next week i broke the wire for the high low splitter and the A/C blower fan went out. Total down time 6 hours plus a bill for $550. Next week two new steer tires and a front end alignment. Total bill was $900 plus I found out during the alignment I need two front axle kingpins and a steer gear. Total bill for that will be somewhere around $3000.

Trust me the real world will kick ur numbers butt all over the place.

 

I have statements. That's not make believe numbers. That's black and white proof. I promise you if you get into a lease and run under 2500 miles a week your overall weekly settlement will be very close to 0 if not below.

I have some - settlements. Sometimes the deductions will be over your mileage pay. Therefore you will get the dreaded negative settlement. Then if you have a breakdown your truckpayment doesn't care. It's still due at the end of the month. Trust me. Get into a lease purchase program and you will be wondering if you can put enough salt on your shoes to make them taste good for dinner.

 

Too much stuff to quote here ... First dave, you're right probabaly only 2% of first time L/Os succeed. But it's not because leasing is a "bad" thing. It's simply because 98% of the people who do it can't do a thorough and precise business anaylsis, develop a business plan and then manage thier business to the plan.

Case in point I gave Rossson the key numbers in another thread. Enough to give him the abilty to do a fairly accurate swag. Now in his defense I did not mention that all costs were weekly. But that aside he left out some key costs and inaccurately accounted for some others. Therefore if he moved forward based on nothing other than the analysis he's done to this point he will fail.

Rosson ... I know the answers, what works and what won't work at CRE. But as I mentioned you have to be able to do this yourself, if you are going to run a business you need to know how to run a business.

The most important thing you can do for yourself, as you move forward with CRE, is to pay for your school through any other means than to finance through CRE

 

When it comes to leases you should be like Fox Mulder from the X-Files. Trust No One.

That being said. The key to finding a good O/O deal really depends on you and the truck you get. You have to find your pivot point. I'll explain.

I had a settlement once where I ran 1800 miles. The fuel I used plus the deductions for license, insurance and escrow ended up being more than the mileage pay. My mileage pay was around $1900. My settlement actually ended up being -$8.99. Yes you can get negative settlements. The next week my pay was larger than normal because I ran over the weekend and used less fuel.

When I said you have to find your pivot point, what i mean is the point where you average on the + side week after week. This will depend on what your truck payment is, your overall fuel mileage, deductions, insurance, escrow ...etc. You have to get to a base where you can then build off of.

Some guys do it on a cost per mile base. I do it on a mileage per week base. If I drop under 2200 miles per week for LOADED miles then I make less than what I did as a company driver with the company I have been leased to. I'm in the process of changing companys so I will have to refigure once I get a few settlements going.

I don't have a truck payment. My insurance is around $20.96 a week. My fuel I base on 5 mpg and then repairs are variable. Overall if I run 2500 LOADED miles per week and keep my deadhead down then I show a good profit. If I drop to 2200 LOADED miles per week and less and have a lot of deadhead then it's just a crap week and basically I'm working for free.

If I had a truck that got closer to 7 mpg and had fewer repairs then my profit would be higher. That is if I didn't have a truck payment still and didn't have a lot of deadhead or repairs to cut into my base.

As you can see being an O/O is full of risks. It's full of rewards as well (at least the potential is there). It will depend on how you are about saving. How your truck performs, your fuel mileage and breakdowns.

For me I don't need the added expenses of a lease purchase. I totally disagree that there are some good leases out there. I honestly don't believe ANY lease is good. The company is the ONLY one that will come out ahead on a lease purchase. If the truck takes a dump on you and you break your lease. Then the company will just fix the truck and lease it out to the next driver/victim.

It's a bad bad bad deal for a driver and a good good good deal for the company.