Husband buying truck for Fedex contract

Discussion in 'Trucker Taxes and Truck Financing' started by starry, Mar 3, 2008.

  1. starry

    starry Bobtail Member

    19
    0
    Mar 3, 2008
    Colorado
    0
    Hello, I am new here :biggrin_2556:

    My husband has been driving for a contractor who has several contracts with Fedex Ground for the past 8 months. (He has been driving professionally for over 10 years) Just recently he saw they had an open contract in our area and inquired about it. Now he is going to buy a truck and take the contract to be an O/O.

    I have been reading this forum about leasing, etc. He found a truck, a 2003 International with 340,000 miles on it I believe. He doesn't have the greatest credit (around 600) but finally found a place (R & K financial out of Florida i believe) who would finance him with 18% down. They are saying the payments will be around 1250 a month and in 3.5 years he will pay $1 "payoff" at the end of the lease and own the truck outright. I asked him if he was sure it was a "lease" and he said that is what they told him but this doesn't sound at all like what everyone is talking about in this forum.

    I am a little nervous about the whole "life change" but once the truck is paid off in three years we will be doing much better. Has anyone heard of a Lease like this? Thanks in advance!
     
  2. 379 Peterbilt

    379 Peterbilt Medium Load Member

    523
    59
    Nov 12, 2005
    Wisconsin
    0
    I have heard of those types of lease/loans before.

    The best advise here (in my opinion) is to NOT sign that truck "loan" agreement without looking over the amorization statement first. I am thinking your hubby will never have any equity in that truck, untill he pays them the last $1.

    If he get 3 years in and decides he wants to sell the truck, only to find out he has no equity in it, he'll be pissed knowing that 18% down and the $1250 per month payments got him nothing.

    I guess I'd surely read the fine print in this, were I him.

    Again, ask for the amorization statement from the financial institution.
     
  3. 379 Peterbilt

    379 Peterbilt Medium Load Member

    523
    59
    Nov 12, 2005
    Wisconsin
    0
    WOAH

    I just ran your math of $1250 x 42 months = $52,500. And that doesnt include the 18% down payment.

    What is the price of the truck, and its specs, if you're comfy to post that? A 2003 IH aint worth a whole heck of alot. (However 340,000 miles for that truck is LOW)
     
  4. Eskimo6804

    Eskimo6804 Heavy Load Member

    816
    3,327
    Jun 13, 2007
    Northeast Alabama
    0
    Another thing to know; In these types of "leases" they are treated as a purchase for tax purposes and thus will have to be depreciated on taxes and NOT claim the whole lease payment as a deduction.
     
  5. MedicineMan

    MedicineMan Road Train Member

    5,799
    6,419
    Jan 13, 2007
    Woodville, TX
    0
    these are not the same as a lease purchase deal so don't let the word lease scare you too much. ALthough I have talked with that company when I was looking at trucks and they were crazy on there rates. HAve any contracts looked at by a lawyer.
    We leased most of our petes back in the day from Premium FInance and lease which was the in house financial department at Peterbilt Waukesha. Most the manufacturers do leases. Check into them before these fly by night companies
     
  6. Brickman

    Brickman Trucker Forum STAFF Staff Member

    12,918
    12,124
    Sep 17, 2006
    WY
    0
    Doesn't FedEx demand a certain age truck at all times, or is that only at the time of buy in??
     
  7. starry

    starry Bobtail Member

    19
    0
    Mar 3, 2008
    Colorado
    0
    Hi :) thanks for the reply. I believe the truck is 43,000 double axel with a bunk sleeper/condo area. That is really about all I know, he had a mechanic check it out from Fedex and the guy thought it was a good deal. I know we will be paying more than the asking price with the lease, but we are pretty much doing the same with our house and car payments as well right now, I guess it's the price you pay for not having a ton of cash! LOL. He has worked for contractors O/O's for many many years and they haven't treated him very fairly so this would be a great opportunity for us to get away from that and have a little more control.
     
  8. starry

    starry Bobtail Member

    19
    0
    Mar 3, 2008
    Colorado
    0
    Yes, it has to be 2004 or newer and white, so it was difficult to find a decent one we could afford with the contract!
     
  9. starry

    starry Bobtail Member

    19
    0
    Mar 3, 2008
    Colorado
    0
    Actually the truck lot contacted two companies and my husband applied to several others, with his credit and past BK everyone turned him down but this one. The alternative to not getting this truck is to keep working for other people which he is getting frustrated with.
     
  10. MontyHall

    MontyHall Bobtail Member

    14
    1
    Mar 3, 2008
    Hollywood, California
    0
    Improve the credit first, then buy a truck through conventional financing. Not the hocus-pocus lease nonsense. Also I believe FED-EX requires good credit.
     
  • Draft saved Draft deleted