Lease purchase? YES or NO?

THE AWALK · Mar 13, 2022

gentleroger said: ↑

I think you missed my point.

Years ago I looked into getting my own truck. At the time, I could tell you the exact cost to run my company truck. I tracked every cost the truck incurred down to each drop of diesel. When you say fuel cost is "around 35-50 cpm" it indicates that you are not currently doing the same. A 30% spread for your biggest expense is not good enough. I'm not trying to be mean, but I watch a new crop of lease operators sign on the dotted line every week. Most of them do not complete the lease at all. Of those that do go the full term, most don't keep the truck.

This is a post I made back in 2014:

"The right way is the way CW and DFO did it - do lots of research, crunch the numbers, and have a solid plan.

The wrong way is to lease a new truck and not know anything about the costs except what your weekly truck payment will be. Not total cost of the truck, maintenance account requirement, rough insurance, rough cost per mile, not if the truck has a diesel or electric apu. ABSOLUTELY NOTHING! The only thing this guy knew was that his cousin is running choice and is "making good money". I understand reticence in talking personal finance with a guy you just met and don't even know his name, but I don't think that was the case. He knew his truck payment was going to be $722, but not how many payments, what the balloon would be, etc.

Owning a truck scares the piss out of me. I know that I don't know enough about all lot of things in order to be a successful IC. It constantly blows my mind how some people will blithely put their entire financial well being in jeopardy. Just because Sigfried and Roy look really cool playing with their tiger doesn't mean you should go out an buy a tiger of your own."

Another Company to IC Choice Thread

Then there's this from 2016:

"Feel free to tell me to mind my own business, but out of curiosity who do you drive for and how much do you gross a year right now? Team drivers should be grossing at least $70,000, plus they have company paid health care (make sure you budget in health care costs, one of those "hidden" costs new ICs forget about). Is it possible to make more as a company solo driver while maintaining time at home needs with a different company?

You or someone else wondered why every time you ask for information you get told how hard it is and how bad an idea leasing a truck is.

We see so many people try and choose to leave for a variety of reasons. The first three truly active IC posters on TTR were @sadwar, @dieselfuelonly , and @chicknwing. Chicknwing left after 6 months because the money he was making wasn't worth being gone from home. He got a job running local LTL for the same money he was making as an IC - with less risk to himself. DFO ran smart as heck, but the stress of owning/running his own business took a serious mental toll (there but for the grace of god go I). Sadwar has done really well over the last (nearly) 3 years, but if I remember correctly the first 6 months were pretty rough. Sadwar had little or no debt starting out, a loving, supporting, gainfully employed fiance/wife, and a cat when he started. He moved into a great freight area that allows him to maximize TAH and Income. Sadwar's hard work is what made him successful but circumstances worked to his advantage. Even being one of the most successful ICs to post here, Sadwar was looking to get out of trucking a few months ago. That should tell you something.

The next three long term guys, @rickybobby , @TennMan , and @freightwipper all have different business models which work for them. Rickybobby plays with his truck half the year and plays with guns the other half (more than a little envious but there are reasons people don't want me playing with large caliber weaponry). In terms of trucking income he makes just above a new driver's annual income. His truck is payed off and when he needed to rebuild the engine his finances/financing was in order. TennMan has stated that he makes about what a company driver would but he went the IC route to better control his time at home. He drives his rear off Monday thru Friday to be home. Freightwipper runs months at a crack and from what I gather makes $10,000 or so more than I do as a company driver (last year $72,000 this year on track for $75,000).

All six of these drivers came in well educated, financially stable, and a supportive wife/single. They all made choices based on calculated risks and have been successful, yet 1/3 of them are no longer ICs. An oft mentioned statistic is that 40% of people who sign onto SNI Choice are no longer with the program one year later - for whatever reason. Even the guys who have been doing this successfully for a couple years have mentioned how much more they're working this year just to keep pace with last year. Buying/leasing a truck is a serious commitment and a large risk. There's a reason equipment finance companies can charge 14-18% interest. I look around at all the new IC drivers who return to being a company driver or leave the industry in a weaker financial position than when they started and have a visceral need to make sure anyone who asks me about Choice understands it's not a "turn key and money pours in" deal. It's hard work, and more importantly its SMART work. If after doing your due diligence you still want to pursue being an IC, you have my sincere best wishes. I will continue being a doomsayer to try and counteract all of the sugar coated advertising thrust in our faces."
Schneider Lease-Purchase..

As an update - none of those guys are running their own trucks anymore.

If you truly want to own your own truck, start with reading the experiences of the guys on here.

Wiper's Thread

DFO's Thread

Double Yellow's Thread

The Typical L/P Experience
After 6 months this guy threw in the towel saying:

"I won't. I'm not cut out to be a business owner. My anger, frustration and depressive episodes don't help me earn a profit, and my expectations were too high. It's safer and easier being an employee, especially when hearing that even Schneider company drivers take home more than I do on a regular basis."

As you do the research, start your truck fund. All of the lease deals that I've seen come with a minimum 10% APR, most are 14-18%. If you can get financing outside of a L/P, it will cost significantly less to acquire the truck.

As a last thought - if you think new trucks don't have maintenance needs, think again. One of our guys went into a brand new 2022 last August - the differential grenaded itself in February. It's been 3 weeks and the truck still isn't repaired as their is an argument between Eaton and Freightliner on who is paying for the warranty work. Even though the truck isn't making any money, you still have to pay for it. On Friday I tried to drop off my student with his truck, a 2021 Casscadia. Coolant was leaking out of the block.

Click to expand...

THE AWALK · Mar 13, 2022

gentleroger said: ↑

I think you missed my point.

Years ago I looked into getting my own truck. At the time, I could tell you the exact cost to run my company truck. I tracked every cost the truck incurred down to each drop of diesel. When you say fuel cost is "around 35-50 cpm" it indicates that you are not currently doing the same. A 30% spread for your biggest expense is not good enough. I'm not trying to be mean, but I watch a new crop of lease operators sign on the dotted line every week. Most of them do not complete the lease at all. Of those that do go the full term, most don't keep the truck.

This is a post I made back in 2014:

"The right way is the way CW and DFO did it - do lots of research, crunch the numbers, and have a solid plan.

The wrong way is to lease a new truck and not know anything about the costs except what your weekly truck payment will be. Not total cost of the truck, maintenance account requirement, rough insurance, rough cost per mile, not if the truck has a diesel or electric apu. ABSOLUTELY NOTHING! The only thing this guy knew was that his cousin is running choice and is "making good money". I understand reticence in talking personal finance with a guy you just met and don't even know his name, but I don't think that was the case. He knew his truck payment was going to be $722, but not how many payments, what the balloon would be, etc.

Owning a truck scares the piss out of me. I know that I don't know enough about all lot of things in order to be a successful IC. It constantly blows my mind how some people will blithely put their entire financial well being in jeopardy. Just because Sigfried and Roy look really cool playing with their tiger doesn't mean you should go out an buy a tiger of your own."

Another Company to IC Choice Thread

Then there's this from 2016:

"Feel free to tell me to mind my own business, but out of curiosity who do you drive for and how much do you gross a year right now? Team drivers should be grossing at least $70,000, plus they have company paid health care (make sure you budget in health care costs, one of those "hidden" costs new ICs forget about). Is it possible to make more as a company solo driver while maintaining time at home needs with a different company?

You or someone else wondered why every time you ask for information you get told how hard it is and how bad an idea leasing a truck is.

We see so many people try and choose to leave for a variety of reasons. The first three truly active IC posters on TTR were @sadwar, @dieselfuelonly , and @chicknwing. Chicknwing left after 6 months because the money he was making wasn't worth being gone from home. He got a job running local LTL for the same money he was making as an IC - with less risk to himself. DFO ran smart as heck, but the stress of owning/running his own business took a serious mental toll (there but for the grace of god go I). Sadwar has done really well over the last (nearly) 3 years, but if I remember correctly the first 6 months were pretty rough. Sadwar had little or no debt starting out, a loving, supporting, gainfully employed fiance/wife, and a cat when he started. He moved into a great freight area that allows him to maximize TAH and Income. Sadwar's hard work is what made him successful but circumstances worked to his advantage. Even being one of the most successful ICs to post here, Sadwar was looking to get out of trucking a few months ago. That should tell you something.

The next three long term guys, @rickybobby , @TennMan , and @freightwipper all have different business models which work for them. Rickybobby plays with his truck half the year and plays with guns the other half (more than a little envious but there are reasons people don't want me playing with large caliber weaponry). In terms of trucking income he makes just above a new driver's annual income. His truck is payed off and when he needed to rebuild the engine his finances/financing was in order. TennMan has stated that he makes about what a company driver would but he went the IC route to better control his time at home. He drives his rear off Monday thru Friday to be home. Freightwipper runs months at a crack and from what I gather makes $10,000 or so more than I do as a company driver (last year $72,000 this year on track for $75,000).

All six of these drivers came in well educated, financially stable, and a supportive wife/single. They all made choices based on calculated risks and have been successful, yet 1/3 of them are no longer ICs. An oft mentioned statistic is that 40% of people who sign onto SNI Choice are no longer with the program one year later - for whatever reason. Even the guys who have been doing this successfully for a couple years have mentioned how much more they're working this year just to keep pace with last year. Buying/leasing a truck is a serious commitment and a large risk. There's a reason equipment finance companies can charge 14-18% interest. I look around at all the new IC drivers who return to being a company driver or leave the industry in a weaker financial position than when they started and have a visceral need to make sure anyone who asks me about Choice understands it's not a "turn key and money pours in" deal. It's hard work, and more importantly its SMART work. If after doing your due diligence you still want to pursue being an IC, you have my sincere best wishes. I will continue being a doomsayer to try and counteract all of the sugar coated advertising thrust in our faces."
Schneider Lease-Purchase..

As an update - none of those guys are running their own trucks anymore.

If you truly want to own your own truck, start with reading the experiences of the guys on here.

Wiper's Thread

DFO's Thread

Double Yellow's Thread

The Typical L/P Experience
After 6 months this guy threw in the towel saying:

"I won't. I'm not cut out to be a business owner. My anger, frustration and depressive episodes don't help me earn a profit, and my expectations were too high. It's safer and easier being an employee, especially when hearing that even Schneider company drivers take home more than I do on a regular basis."

As you do the research, start your truck fund. All of the lease deals that I've seen come with a minimum 10% APR, most are 14-18%. If you can get financing outside of a L/P, it will cost significantly less to acquire the truck.

As a last thought - if you think new trucks don't have maintenance needs, think again. One of our guys went into a brand new 2022 last August - the differential grenaded itself in February. It's been 3 weeks and the truck still isn't repaired as their is an argument between Eaton and Freightliner on who is paying for the warranty work. Even though the truck isn't making any money, you still have to pay for it. On Friday I tried to drop off my student with his truck, a 2021 Casscadia. Coolant was leaking out of the block.

Click to expand...

Ok can you just respond to the my question? Lease purchase yes or no? And have you did a lease purchase? If yes why did you fail?

gentleroger · Mar 13, 2022

THE AWALK said: ↑

Ok can you just respond to the my question? Lease purchase yes or no? And have you did a lease purchase? If yes why did you fail?
Click to expand...

Since my response was too long for you read:

No, you should not do a lease purchase.

No, I didn't because it didn't make financial sense for me.

L/P guys tend to fail because they go the L/P route because they don't have the money needed to start a business.

THE AWALK · Mar 13, 2022

gentleroger said: ↑

Since my response was too long for you read:

No, you should not do a lease purchase.

No, I didn't because it didn't make financial sense for me.

L/P guys tend to fail because they go the L/P route because they don't have the money needed to start a business.
Click to expand...

Thanks for your input, that is all I needed to know

REO6205 · Mar 13, 2022

THE AWALK said: ↑

No one said I was at the same company for 10years straight. Read the topic and give me good advice not criticize me. I’m asking from one trucker to other about a choice.

I do not live beyond my means. I have everything I want at home. If being a company drive makes “401k you could have $100 to 150,000 at the least”. Then why does everyone want to become a O/O or lease to own The goal is to be your own boss have your truck paid off and work when you want. Not when someone tell you to clock in.
Click to expand...

You've had a lot of advice here. Most of it was good advice based on many years of experience. If you don't like the advice you're getting because it conflicts with your goals just scroll on down the page until you find something that pleases you.
You won't always get the advice you want here but you'll always get advice that's as honest as the other members know how to make it. Make that work for you. Or not. Your choice entirely.

Also, not every driver wants to be an O/O. Many drivers are perfectly content to drive a good truck, make a good wage, and let somebody else do all the worrying.

gentleroger · Mar 13, 2022

THE AWALK said: ↑

Thanks for your input, that is all I needed to know
Click to expand...

Please take some time and read through the links I posted. There's a lot of good information in there that can help you make informed choices.

Last Call · Mar 13, 2022

THE AWALK said: ↑

Ok can you just respond to the my question? Lease purchase yes or no? And have you did a lease purchase? If yes why did you fail?
Click to expand...

I love reading threads that guys like you start.. You ask a question then when members give you their perspective or tell you about things to be aware of from their experiences and you don't like what their saying because it isn't what you want to hear you get butt hurt and want to argue with those people
So here's my free advice...
Yes you go lease a truck and make the big money .. don't wait to long because the price of operating costs is going up faster than the freight rates so hurry
You should probably get to signing papers 1st thing tomorrow morning so you can be on the road by midweek..riding the gravy train ...tot tot !!

THE AWALK · Mar 13, 2022

Catmando said: ↑

I love reading threads that guys like you start.. You ask a question then when members give you their perspective or tell you about things to be aware of from their experiences and you don't like what their saying because it isn't what you want to hear you get butt hurt and want to argue with those people
So here's my free advice...
Yes you go lease a truck and make the big money .. don't wait to long because the price of operating costs is going up faster than the freight rates so hurry
You should probably get to signing papers 1st thing tomorrow morning so you can be on the road by midweek..riding the gravy train ...tot tot !!
Click to expand...

Lol I’m not sad, I like the advice. I think I should of asked the question differently. I should of asked? “What are the reasons you fail at doing lease purchase?” I would like to here why they fail so I can work around someone else mistakes. All the advice here is good information. I never said it was bad or I did not need to hear. I have more to think about now. Thank you all for your help.

D.Tibbitt · Mar 13, 2022

THE AWALK said: ↑

Thanks for your input, that is all I needed to know
Click to expand...

hey man these guys are giving you good advice. i have done lease purchase and was successful with it, with a used truck and paid 90k worth of truck in under 2 years... i would not reccommend a lease purchase. it is very very hard to be successful with it.. the only way it would be beneficial to you is if you find a program where you are not tied to dispatch. you can find your own loads... a lease purchase is good way to learn the business if you are able to find your own loads. but if you are tied to a dispatcher you are nothing more than a company driver. and your dispatcher is going to determine how much you make... you say the whole goal is to get a truck and run your own way... so if you are tied to a dispatcher and they determine how much money you make and where you run and what loads you haul, does that sound like someone that owns a business or does that sound like a company driver? so if this is the case, is this something you want to get in? you take 100% of the risk of owning a business but have no control over your revenue... thats what a lease purchase is, if you arent able to find your own loads...

Last Call · Mar 13, 2022

THE AWALK said: ↑

Lol I’m not sad, I like the advice. I think I should of asked the question differently. I should of asked? “What are the reasons you fail at doing lease purchase?” I would like to here why they fail so I can work around someone else mistakes. All the advice here is good information. I never said it was bad or I did not need to hear. I have more to think about now. Thank you all for your help.
Click to expand...

Ok I can't give you any advice about a lease purchase because I have never been Involved in 1
But as a O/O from a out side view and knowing the risks and the costs to operate ..it's not easy
Personally I wouldn't want to sign any papers that make me committed to 1 company and badicaly allowing them to have full control over me..
But.. that's just me

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