If leasing is so bad, why do so many take the bait?

Kind of curious... I know that leasing in the world of truck driving is the same as "independent contractor" in the IT Field. Why do people sign on to these? I am not a financial guru, but just doing the math on the basics...it doesn't add up. Add-on things like payroll taxes, etc...well again, why? Am I missing something. I guess in the same boat why would anyone want to be an O/o?

 

there is a couple of versions of owner operator???

owner operators owns his truck has his authority and does what he wants for himself.

owner operators owns his truck, leased to a company who does close to the same.

owner operators/lease operators, lease the truck and lease it on to a company. generally you get screwed to the wall. basically a company driver who eats all the expenses for the company. However, there are a few savy trucker dudes, lucky/skilled??? that can make this work for themselves. They are the few that really shine and do make more money this weay than they would have as a company driver. These have a very strong work ethic, good business sense at the outset, and a little luck.

so why do it ?

Its a gamble. If regular driving isn't your forte... its something different with a chance at being something better.

Company guy... you're guaranteed a lot of things, mostly good, but you're also guaranteed to never get the full fruits of your labor either.

company guy is working for mileage with maybe a lame duck fuel bonus.

company guy averages 8mpg driving crafty and freezing... well you saved the company a penny but you don't get it.

O/O Also, if you are a newbie, running for peanuts... well you can't jump in and start making the same money a vetran, you don't have to wait 5 years to start making .45 a mile.

rant rant ad infintumm

 

Because they'd lose big time on Jeff Foxworthy's show.

Leasing isn't a problem, really - it's the Lease-to-own - from a carrier that burns people.

In other words, going down to the local Kenworth dealership and leasing a truck then leasing to a carrier, isn't much of a problem. You are an O/O at that point. If you are unhappy with the carrier, you can depart for warmer climes.

When you lease/purchase your truck from the carrier, though, you are trapped hauling for that carrier. They have zero incentive to keep you making money, since if you fail, they get the truck back and can (theoretically) lease/sell it to somebody else.

The first example should be a calculated risk.

The second example is playing the lottery with your full income.

 

If leasing is so bad, why do so many take the bait?

Closest thing to O/O I'd guess.

 

I'd like to sit at a truck stop some day and ask all company drivers to tell me what an amortization schedule is. Then ask them to use my HP calculator to compute simple interest loan. Then have them tell me the difference between APR and money factor and how to convert between the two.

Anyone who thinks they are smart should be able to do all these but I bet 95% of high school grads can't do all of them. Doesn't make Driver dumb. Simply makes him more susceptible to being a victim. Look at all the morons who are losing their homes in adjustable rate mortgage messes!

Do you really think most people understand the difference between 1/2 of FICA and 100% of FICA? You just took a nearly 8% loss for every mile you drive and that is just the government screwing you. Wait until CR England takes their share. Now you may be working for free.

BRI

 

Very very good points, there. I can't do the amortization, etc (but I know what the table is). But I can think. I bought my house at the height of the ARM hoo-haw. I walked away from banks that would not give me a fixed loan. As a result, I'm now in a home with 5% interest - and no inflationary rates.

Before I ever drop more than $5000 on something, I pick up the financing and mush it all around. I play with the numbers for weeks,if not longer. I definitely don't jump in with both feet without checking to see if the bottom of the lake is 6 inches down and full of sharp pointy things.

If more people did their homework (or even got somebody else to do it for them and then paid attention to what THEY said), we'd have a lot fewer people going belly up with bad investements.

 

Not 100% true. Investments are made in companies that are ran by humans. Humans have the knack for sometimes doing the unexpected. Bad financial decisions are not always the result of poor planning. There is the picture presented to people who tend to look at the bright side. If they questioned the ARM's and were then told by their friendly banker, it will never happen, can you blame them for believing it? People tend to trust bankers more than they should.

 

and smart collige folk who can do all that fancy math figurin' probably KAIN'T back a truck into a parking spot! yee haw! that's rite, I wint thar!

the reason newbs go for the "lease" deal is because they think they're going to make more money and be their own boss. in my opinion it's unethical for a company to try to sucker a newb into a lease deal. just like it's unethical for an investment firm to sell someone an investment which isn't suitable for them (the "ethical standard of suitability.)

but if you ask a real O/O, I don't think they would consider someone who leases a truck from a trucking company to be an O/O. my brother is an O/O and doing quite well, but he drove for almost a decade before he bought his own truck. and he DIDN'T lease it from a trucking company.

 

I totally agree.

Anytime, you sit down to sign papers and have to ask the guy across the table if you can afford it or how much he thinks you'll make, you're sunk already.

The ethics are so bad, business wise in this country, they ought to make you read a book and take a short quiz before they can accept your signature for a loan or a lease.

I believe some people made poor decisions the last couple of years but half of them were flat ambushed !!!

Sign here and you'll be pulling down 70k by next year...

assuming everything is perfect, you never take a break, get a cold, blow a tire, or buy groceries. Less taxes, w/c, insurance, and finance charges of course... You want shining red paint with ??? No problemo !!!

 

I never said it would solve ALL the problems - merely that a large percentage of them would not be there.

I think, though, your example was poorly chosen - it's still poor planning to accept the word of anybody with a vested interest in the outcome.


As for trusting bankers.. heck, I don't even trust my doctor! He tells me to take X med, before I ever even order it from the phamacy, I hit the drug references to see what side effects it has (or may have) and how it will affect the other meds I take. More than once I've called the doc back and said "pick a different med, this is contraindicated for use with my other meds".

And the doc doesn't really have a vested interest in making me well, really. He's got a professional credo that says that's his aim - but if I stop seeing him, he stops getting money from me.

So.. what does this boil down to? I said it up above - never trust anybody who's got a vested interest in the outcome.

Chief-

Uh.. I have a college edumacation an' all. And 12 years of experience in running my own company.

I definitely agree with you on the ethics thing. Absolutely. 100%. All the way

I would also agree with you that a leased from the company it's hauling for is not a true O/O situation. O/O has the freedom to tell company A to take a long walk off a short pier.. a L/O can't do that.

It's not even close to freedom. More like.. oh.. Indentured Servitude.