LRM LEASING HAS ANYONE DEALT WITH THEM?

Yea white flag.

 

So your going to put say $15,000 in a saving account,and say financing 70,000 on the truck how much return you getting on that?because your paying interest on that 70,000.if you took that 15,000 and put it down and only paid interest on55,000.your the finance expert.your losing money.The interest your paying on the 70.000 is going to be more then the return you'll get by investing in a saving account

 

Hey TB, Interesting plan and conversations here.I have maybe-a stupid question.
Would you be better off getting a brand new truck-ex,Lone Mtn(2018 volvo 780-----@12,500.00down-2,600.00 a month)?I'm thinking "Warranty" n somewhat more piece of mind.Also,instead of keeping for only 2 yrs-keep it for the full warranty.
Not poking fun at your mechanic or spreadsheet-but buying something used-well-is buying something used-fine this month-in frame next month.And w/this smog crap-i'd be scared of used(especially a couple of used).I'm just asking a question-not poking fun at anything.
Thanks.

 

That scenario wouldn't work for me. Why:

As a start up, my budget wouldn't like $2,600.00 monthly payments. $2,600.00 monthly payments means insurance would also be about $1,000 per month. So that's $3,600.00 in just the equipment alone. A small fleet should average about $15,000 a month minimum per truck with 1 or 2 dedicated contracts direct from a shipper. That takes away too much of the budget.

I personally don't base my decision on a warranty (although I'd still get it). Warranties generally only cover major components that typically don't fail until AFTER the warranty period. And with drivers, there's no piece of mind even with it. It doesn't justify me paying $3,600.00 a month. Now if that $3,600.00 payment comes with a nice maintenance contract like penske, then that scenario would be awesome but from my experience, they don't.

These are not one size fits all solutions and answers. I would LOVE to buy a few great trucks but not at the interest rates or inventory that my start up currently qualifies for. In my interest rate bracket, I'd still be paying for more than half on that 2018 when in a couple of years, it's resale value wouldn't be that much. Youd have to want to keep that truck for 4 or 5 years and hope for refinancing options.

Major fleets don't pay $2,600 a month for their new trucks nor are they putting that much down. The cost of their trucks aren't even over $100,000. The prices you see are retail that's been marked up a few times over to pay for all of the middlemen. They don't have to deal with retail prices because of 1. volume purchasing and 2. they aren't in the subprime lending bracket. It is possible for small fleets to strategize and get there....

 

If you are going to swap numbers out conveniently, I definitely have to bow out of this thread.

The dealership quoted me a $1,800 monthly payment on a 2013 freightliner cascadia with about 500,000 miles and putting down 25% and great personal credit. The program Im waiting on approval for offers the same truck with less mileage for $1500.00 per month with NO money down or credit check and you can swap the truck out every year or two with no mileage penalties or restrictions.

***its not a program for owner-operators but small fleets and start ups needing up to 5 trucks the 1st year***

For the life of me, I can't understand why the hell I'd choose the first scenario. You only need 1 year of consistently strong revenues and p/ls and 6-12 months of business credit building to put yourself in a better buying position.......

Direct to shipper dedicated contracts (like with Amazon) usually also require you to be able to ramp up and down based upon season and volume. You are not going to spend $15,000 to $30,000 on a down payment per truck to satisfy that when demand for that truck fluctuates. The goal is qualifying for equipment lines of credit or leasing programs. But you can't really do that UNTIL you get out of the subprime lending world with the lower tiered lenders and wholesalers. THAT is your first goal. Not whether you can ball out of control and prove you can buy an entire truck just because......

 

Well you made statements that are very misleading like trying to compare LP deals to a major corporations leasing.And trying to say LP deals give you leverage.Both statement couldn't Be anymore untrue. You saying having 20 to 30% down doesn't give you a better interest rate couldn't be more false just shows you don't understand leverage. If you saved your money for a down payment fixed your credit took your good credit and 30% down to a dealer you will get multiple offers from finance companies.When you go to a place like LRM for LP how many financing companies are competing for your business 0.So you not even understanding leverage in the financial area but trying to sell your expertise on your financial experience is sad

 

No I didn't. And you know I didn't. Where you are confusing yourself is that you are trying to compare and contrast 2 buying options that would work differently for different types of buyers. And bc you have limited knowledge of the purchasing process for a business (Im assuming so bc of your answers), you are throwing in totally unrelated points and mixing the topic up even further.

I stated fleets LEVERAGE debt to acquire assets. That happens in many different ways. But the reason that they are able to able to come off better, no matter the option they choose, is because they have access to less than 10% interest rates (the non-subprime) and can take advantage of volume purchasing. NOT that they can put more down.

I also stated I am a fleet. A fleets objective isn't to have 1 or 2 trucks (you might as well stay an owner-operator and lease ur trucks on to another fleet). The goal is to acquire and dispose of MULTIPLE trucks as quickly and as cost-efficiently as possible. If you have a contract worth $7-$10k per truck per week (which I do starting next year) and it costs about $5000 - $8000 just to register and insure a truck without factoring in the downpayment, why would it even make sense discussing putting larger down payments down?

Even if the total cost of the truck is slightly more at the END of 3 or 4 years by going with a program such as LRM or straight leasing as with Penske, who cares when not having to put down large deposits will allow you to acquire MORE trucks, with less investment, and earn more revenue NOW...putting you in a better position to qualifying for non-subprime lenders the next time around? Even better if you can turn the truck back in without penalty or additional costs. This is the SAME purchasing process a major fleet goes through except their cost of borrowing, is cheaper.

Your solution works best if you are an owner-operator who knows his lanes, could survive without a carrier's dispatcher, and you aren't really looking to put different drivers in. At that point, the priority would be a solid truck with low monthly payments and that I could own for 4-6 years.

There are plenty of ways to make different purchasing strategies work as long as you know your numbers and the cost of exiting that contract. All programs aren't the same. This thread was specifically about LRM's program. Not Epes or Steven's program (which I wouldn't do). The terms would allow this to work for me if they had better inventory. It may or may not work for others depending upon their individual situations and access to inventory.

 

Man, you keep going back in the water. Your stuff is interesting and worthwhile, even if he doesn't want to or can't get it.

 

I am passionate as ever about the science and numbers behind fleet management. Part of this is knowing he is probably just debating for debates sake, but its still giving me an opportunity to talk about all of these different things. Hope others would chime in and suggest other strategies or lenders to check out.

 

I don't know of any fleets that use lease purchasing to get there trucks or trailers,probably are some that go that route.Maybe you could give examples of successful fleets who use LP companies.As far as LRM I know nothing about and you haven't really given any useful information on them either other then how wonderful there salespeople are like interest rates I'm sure it's most likely in the %25 range. You are stuck on the walk away part ,which like I said those companies won't report made payments to any credit bureau so it's not helping you in a purchase later through conventional financing you will still be considered a 1st time buyer.And don't be mislead about the simple walk away you still are responsible for any damage or repairs the company says the truck needs,just because it's a walk away doesn't relieve your responsibilities of truck.There is a reason LP companies advertise on there web sites in big bold capital letters NO CREDIT CHECK.They are preying on a certain customer base.Now you are right I do base on my experience I am a single OO and operate my own authority and bought and finance several trucks (4) and 2 trailers.and I do have to say me personally never done any kind of LP or lease.