Leasing a truck

You really need to do some more heavy thinking before you consider becoming an O/O. Just FYI $2000 isnt a down payment for anything other than a set of tires. My truck farts and it cost me more than $2K. Try this... Every time you fuel look at that $$$ amount, and see if it doesn't scare the hell out of you. If you cant afford $1K a week for fuel, you aint ready.

Personally I wouldn't ever consider ANY company lease deal. Think about it, they are in business to make money as a business. Otherwise they wouldn't do it. You bring nothing to the table, other than being a dime a dozen truck driver. Why are they doing this? TO MAKE MONEY FOR THEIR COMPANY!!!

Sorry if I come across as harsh, but I listen to guys on the road (cb chatter), and read on this board every single day about guys getting totally jipped by these company lease deals. The one thing they all have in common is zero cash flow to keep them from sinking when the smallest thing goes wrong with their truck. My advice, get $20K in the bank before you consider doing any thing like this.

 

Here is how I look at it.
If you need or want a car but don't have the money for down payment and have bad credit, you have to go to a Buy here Pay here, and you get screwed, but you al, so get a car.
If you need or want a new washer and dryer, but don't have the money to buy one or good credit you have to go to a rent to own place, you get screwed, but you also get a washer and dryer.
If you want to be an O/O, but don't have the money or credit you have to go through a company lease, you get screwed and you don't get the truck.

 

I've read of a few drivers on this site that did OK with a lease. At least that's what they claim. There are SO many variables involved, but, anythings possible............

 

I don't think it's so much a ego issue. Some folks do not like constructive criticism/advice, even when they asked for it.

I sat here wondering if I should respond any further to the OP. For some reason I felt compelled to share my once factual experience of a lease from a trucking company. Keep your pecking order in thought here as you read this ;

O/O, whom I met at the same time when I started at this trucking company. He was leasing his truck from a external company for purchase. While I was leasing this truck from the trucking company we started at. Now this trucking company is not a small one, I will only say, it is one of the top five biggest trucking companies.

About three weeks later, It just happened by coincidence we met up in PA after making our deliveries on Monday July 2, 2007. I can't remember the city but I clearly remember it was a Petro on a hill. We could see fireworks in every direction around us, from all the little surrounding towns.

There was twelve drivers from this company, waiting for loads at this Petro. Most of them were company drivers. Do you think we had priority ? NO, we were on the same list as the company drivers. (I seen alot of ticked off drivers that holiday.) Yep, the O/O and I did not get a load out of there til the 6th of July. While we watched many of the company drivers leave for a load. Do you think the company cared ? Not one bit, but here is your layover pay. That should help you out,

Conclusion

The O/O got a load heading to AR. He dropped the load in Memphis, called them and told them to deliver there own #### stuff. He already had a new gig setup with a broker, when he got back home to retrieve his trailer.

Me, I had to take whatever they handed me. Why ? Because I was obligated to their lease and could not do anything about it, (until I hit the 90 day mark). They were in control of every aspect of me and the truck I was paying for. I could not take the truck and go to another company. I could not call a broker for a load. We did not get multiple choice loads and refusing a load is highly frowned upon. I had to sit, be irritable for almost five days and spend my chump change/layover pay in the truckstop to eat.

I don't care how good of words theses trucking companies use to entice you for that lease contract. It will not or never will be for the benefit of the lessor/driver. Ask them for a copy of a unsigned lease contract to take, to a attorney. If they refuse, that should be your first red flag.

With all that said, There are external leasing companies out here with lease programs. They have 2,3-4yr leases with zero dollar buyout at the end. You straight out own it. The trucks I have seen, are any where from 2-5yrs old with low miles. The payments are relatively the same as these trucking companies and some have low down payments with easy terms. I know of three members on this site going that route and so far have been pretty successful. I'm not saying, being on your own terms is easy but you are more in control of your earnings and trucking future.

Like I said earlier, I'm not trying to discourage, bash or laugh at whatever decision you make. I wanted you to see first hand on how much control you really have over their lease program. Some folks are content with a company's lease program and it just might be a perfect fit for you. Good luck in whatever you decide to do.

 

Yea think hard! All sounds great untill your sitting there at the truck stop with no load spending money instead of making money. Then you want a little time off you might say you want but you will oh! i cant i gotta truck payment,ins, etc. Well this isnt going to wait its still got to be paid. And if you couldn't pay you bills before, Leasing a truck aint going to change this.Its only going to make it worse. If your doing so well as a company driver stay as one save all you can until you can go buy a truck for ten thousand then save more then become an o/o... Im not trying to be a jerk, But if you cant do this then theres no reason to even try becoming an o/o. I no you thinking well the truck that you could buy for ten thousand is going to be a piece of junk well true it might not be the prettiest on the road but i promise you will make a hole lot more with that ugly piece.. Hope you make the right desision . Just remember the people a the leasing companys get paid to lease trucks and don't care about you.

 

I assume you mean that much more per week? Going from a company driver to a L/O that may be a step backwards. Are those numbers just the net increase to you after deducting just fuel and truck payments? If so have you taken the time to consider all the tax implications of this change? Once you factor in having to pay your own taxes that dollar difference is not much, if any, increase. Remember you will now be paying more tax since you are picking up the "employers" part of the contribution, commonly known as self employment tax. Also if you have any benefits as a company driver can you afford to continue to provide equal ones to yourself and/or family?

And of course as others have stated or implied, without money in the bank (generally $20k is recommended) how will you pay for unexpected repairs? It's a new truck, okay, but you can run over something in the road and there go two tires. Getting a simple thing like two tires replaced on the road, with the cost of a road call, service, and the tires, could be in the $1500 ballpark. Things that can be fixed at your local shop are easily two or three times more expensive at truckstops and locations away from your home.

Just things to consider, we've all seen the bad outcome of lease purchase options at the big companies. I know of several small companies where drivers lease trucks and there is a 70-80% lease completion rate. Generally those drivers leave because of not adapting to the type of work required (tanks), family issues, or just plain tired of trucking.

And I'm certainly not defending the companies with abusive leasing practices that rip off drivers as a normal part of their business practices. But, there are valid reasons for a company to lease a truck to a driver. I have my authority and offer drivers the chance to lease if they want. That makes the driver have a sense of responsibility and ownership and they usually take much better care of the truck than if it is a company truck. Also it passes the costs of operations off to the driver that I do not want to be responsible for as a company owner. Drivers that cannot driver efficiently cost me money. Going out of route because they want to stay on the big road, going by the house whenever their route takes them within 200 miles, not being able to keep idle under control, all these consume extra fuel which is a major expense. Does that make me evil for passing the cost off to the driver because of his inefficiency? I don't think so, rather it puts the cost where it belongs. As many have said, running a truck as a business is the only way to have a chance at making decent money especially in this troubled economic time.

You are of course better off if you could lease or purchase from an outside source, but it is understandable why many people cannot do that these days. However, you may be surprised at the willingness of dealers, especially for a used but recent model truck, to find a way for you to get financing. They are at a low point in sales and it is in their best interest to move inventory off their lot any way they can. It cannot hurt to ask.

Good luck whichever way you decide to do this.

 

Just remember nobody is going to give you something for free, your going to pay one way or the other... And its there truck. Take the agreement to a lawyer to have it fully explained. If they won't let you leave with it or send you a copy ahead of time you do not want to sign it. This was written by there attorneys to protect them and insure the profitability of the company. from you. By the way JCT is the only one of several I ask to mail me copies and they sent it Fedx. This is not an endorsement you really have to read the whole lease and understand it.