Okay, so I bought a used truck from Crete Carrier.

The point you & Bill are missing is that Crete does not force anyone to use their bank to finance the purchase of one of their new or used trucks. The O/O is free to secure outside financing. An O/O in a L/P program cannot do that.

If the O/O is not financed through Crete's bank they are not required to have their truck governed, only agree to abide by Crete's policy of 65mph. The only reason Crete requires an O/O who is financed through their bank to be governed at 65mph is possible liability.

It's been almost 3 years since I refinanced away from Crete's affiliated bank. I've experienced no change in my productivity.

 

My main point on any finance deal, when you are limited to 3 or less options to lease on with then you are protected by the same lending laws that someone that does an L/P thru CRE or anyone else. If you walked away from the Crete finance company they could not legally ding your credit or any of the other things that companies try and do.

When shopping for my truck one of the finance companies that a dealer presented required you to lease to 1 of 4 companies. Now I wasn't interested but was told later that the option was not available as the company lost one of the companies. This put them under the L/P finance laws.

And all of the companies that I looked at for financing had authority or being approved to lease with a carrier as condition of financing. Some even had FSC requirerments if you leased on with someone. One would not allow running under own authority for the first 18-months is you did not have 24-months independent experience. And then you had to have a good reserve account with them.

 

I would like to know your source stating that a bank loan falls under the same lending laws as a lease purchase. Not saying your wrong, just would like verification before I believe it.

 

I don't think we are missing that at all. And if you do finance with an outside source, then you are an owner/operator. But if you finance through Crete's bank it's basically a L/P.

I think the 65mph provision is something they stick in there hoping for some compliance, but knowing it is likely in no way legal or enforceable.

 

Redhead, SS, and myself have stated why buying a truck using Crete's affiliated bank is NOT a lease purchase. Other than truck stop lawyer talk neither you nor Bill have proven otherwise. Until you do its time to move on.

 

Not TS lawyer but actual lawyer. In very similar "financing" situation as what Crete offers (but no money down and didn't have to have experience with carrier). OOIDA got me to attorney and was able to get out of agreement with all my money and his fees paid for.

It is a matter of conditions of financing and not type of financing. They can call it the Blue Monkey Penny-a-Day plan. As long as a condition of financing is that you are leased onto a specific carrier then these laws apply.

I believe it is under the truth in lending laws but could be off on that.

 

The difference between a lease/purchase and a financed loan is who's name is on the title while you are making the payments... If your name is on the Title, with the Bank/company holding a lien, then it is NOT a lease, truth in lending laws. Does not matter what restrictions the company you then lease onto with put on the truck, you, and the contract.

 

In this similar situation was your name on the title, and did the loan have a bank as the lean holder?

 

I was on title with the finance company as lien holder. In my case the finance company, while owned by relations to the company, had no "legal" ties to the carrier. When someone signed on the line the title transferred from trucking company to the signee with finance company on the title as lien holder.

This lasted all of three months. I think once they figured out that they could not get around the laws that it made no sense. By the time I was looking to get out they hade already "purchased" the company.

The term Lease/Purchase in the tucking industry describes two different things. The first is how it got its name - You have an agreement to lease a truck with the option to purchase at the end. Lot's of different ways it can be set-up but it is an agreement just like any other lease agreement. In truth, many of these are just Leases with no real design to have the person leasing the truck purchase it at the end.

Then this term has been kept and used to describe ANY agreement that includes financing WITH the condition that you "lease onto" a specific carrier. And the carrier does not even need to own the finance company.

What Crete has done, and a few other smaller companies, is smart. Of the list of a dozen or so issues why you do not want to do an L/P and why they fail, they have addressed 4-5 of them. Name on title, skin in the game, experience in trucking and with company, business support (real support I am told).

But seperate for what amounts to all intents and purposes as a tax issue from what is being discussed. This is about the business relationship between Crete and the driver. It feels like people are saying you are using a Kleenex and you are saying "NO, NO, NO, - It's a Scott Tissue". L/P is the generic term used. PLUS the laws provide some added protection for you if your relationship soars with Crete.

 

This is not about tax treatment or restrictions placed on by the trucking company. This is about the restrictions placed on the finance agreement.

Seperate the two.