Lease-Purchase? Do the math.

I have an application in to Crimson Flash ! I think I'll do OK, freights picking-up, and that obama man said things are all better now.

 

LOL, things are all better now? The unemployment rate keeps going up, our freight is still slow, and fuel is still over 2.60 a gallon in most places... gonna take a lot more than him saying it's all better for me to believe it.

 

HA! And here I was rackin' my brain trying to figure out who Crimson Flash is! CFI maybe??

 

Why not work as a company driver and build up your credit and save up for a down payment for your own truck?

It doesn't make any sense to buy a brand-new truck through a company when there's so many quality used rigs on the market right now.

But that's the problem...nobody wants to pay their dues and work their way up. Everyone wants it right now with EZ payment plans up the ying-yang.

Would you pay $14.00 for something that is worth $11.00 in the grocery store? Then why would you do that with a truck?

 

If you have bad credit, you should not be a Owner Operator. Chances are if you do the lease gig with a company, you will just make your credit worse if things go south, and from what i see that happens more then a lease working out.

 

two problems i have with this post (dont get me wrong it is a GREAT eye opening post)

first....yeah, there are 13 '4 week' months, but there are still 52 weeks in the year. so there are still only 52 truck payments.

second...not everyone has credit good enough to go into a bank and buy the truck outright. not everyone has good enough credit to to into a bank and walk into a KW dealership and buy a $45,000 truck.

Granted that truck the company 'sells' you, you end up paying 2-3x more for. NOT TO MENTION, some companies even have a clause written into the lease that they can sell the truck out from under you, and put you into another truck and just carry over the payments. So say you happen to find a fairly nice truck, a year down the line, they can sell it from under you, put you into another truck same make/model but a little bigger P.O.S.

But in the end, you still have a job. (as long as they dont try to starve you out of miles.) but how does that make sense. Say you got a sucker to take the truck over....the company is still making more money giving them the miles than giving company drivers miles. And why? its the overhead off the truck. Swift has a zillion newbie drivers making less than .30cpm. But they have a smaller profit margin with those drivers than they do with the L/O or O/O drivers they got, cause THE COMPANY still pays the insurance, cost for repairs (and believe me, there are some co. drivers who love to tear up equipment) and the fuel.

So who do u think they are going to give the miles to? I've got no car payment, i've got no house payment, i've got no wife or kids (that i know of) i've got a dog, and a few vices (no boobie bars) but other than that, i know i could make a lease work.

yeah, it is a 'bad deal' when you compare it to someone with perfect credit, who can walk into any pete dealer and point to any truck and have the ability to say "i'll take that one". it looks like a 'bad deal' when you compare it to companies who are 'day to day', have 200 trucks and 300 drivers and to companies that have 15,000 trucks, and 25,000 drivers.

I'm actually taking the next 4-6 weeks, keeping track of the paid miles and the actual miles, fuel, everything. then seeing what i would have got paid as a L/O. If i'd make a few hundred more a week than i would a co driver....so be it. yeah i got more 'worry' and more 'what ifs', but it is a business like any other....problem is most drivers dont run it like that. and the ones who dont, are bound to fail.

 

They are going to give the miles to the company truck. As it has been pointed out in other postings, when the company totally controls your destiny (they supply the work as well as the financing and equipment) it is not in the company's best interest to see you complete the lease. It's true that there is less overhead with owner operators (which is why some companies only hire owner operators) but they can make more money by yanking the truck from you and leasing it out to someone else, essentially "double dipping".

The bottom line is, if you can't afford to buy a truck outright (which 99% fo us can't anyway) or your credit isn't good enough to borrow the money from the bank then bite the bullet and be a company driver for a few years until your credit improves and you save the seed money to start and you gain necessary job experience. The bank has a vested interest in your success, they are in the money business, not the truck selling business so the LAST thing they want to do is reposess a truck. The bank would much rather see you stay in business and pay off the loan with interest so BOTH parties make money. Unfortunately, some (not all, but some) trucking companies would rather see you FAIL as a lease operator so you are forced to turn the truck in and they can find some other sucker. Either way the company is going to make money. You can make money, too, but only if you do it the right way.

 

hence i'm taking the time to see what i'd have made as a lease operator before i'd jump into it. and i know if i want to take time off, the truck payments dont.

 

And if you're going to do it I would strongly suggest bank financing. Don't give your employer too much leverage.