Our experience with Success Leasing

If I was 10 years younger ( I'm 58 ) and knew that I loved trucking I would buy a new truck with the options that I need to have a semi-normal life while on the road.

At my current age, I would most likely lease within a few years. To me a lease make more sense especially if I become sick or disabled. At least with a lease I would have the option of turning the truck in early rather than making monthly payments on a truck until it could be sold.

 

That's what disability insurance is for.

 

So, we're just supposed to pack it in when we hit, what? 30?

Seems like the wonderful world of idiots in Washington think you're supposed to work until almost 70.

 

Which *might* cover part of your personal expenses, but not much else.

 

You can purchase "business interuption" insurance.

 

Believe me thats 100% true. Thats exactly what happened to me. Got Mono and couldn't find a driver to drive the truck. So I lost it and my credit rating. I was told I couldn't buy a truck with the little credit I had. I worked around it and got it. It was a real let down to lose it.

 

DD. I too have a huge business background and am a numbers guy. Spreadsheets are my friend and P&Ls get me excited. If you would have asked this question of me when i started with Prime I would have told you there was no way I would lease until at least a year and I think this is sound advice. That being said I will be leasing straight out of the box because after being on a lease truck for the past 3 months and working the numbers I know it is right for me. The big clincher for me was when my current trainer noticed my "savvy" asked for help as he felt he was not profitable as he felt he should be. So with his permission I pulled his operating statements and started to crunch his numbers which were all solo. He can drive a truck and is a good mentor/trainer but he is young and while he has an understanding of business he had no plan.

His Revenue was good and fixed costs were inline but his variables specifically fuel was high but still not a bad profit. Still his fuel cost was like .24 a mile and it needs to be below .14 to max profit. MPG was a little low and his fuel purchase plan was fill it when I need it.

When I said well you made X so far this year he said "no way there is no where near that in my bank" So I did a full P&L for him then he let me reconcile his check book (like I said I like numbers) I showed him where the deposits into his account equaled the Number I showed him. I asked for his Budget which was met with a blank stare. So there is the problem failure to plan is a plan to fail.

So now he has a fuel purchase plan and a business plan consistent with his goals and a budget. He only slowed down 3 MPH now gets mid to high 7's. His fuel cost is .08 a mile for two months and well he is happy with his net.

I share all this because I have seen the numbers for him and two other lease guys who wanted help and the revenue is there. The lease can be argued as high but as a % of fixed costs it is in line.

In simplicity it has worked out to 1/3 fixed, 1/3 variable, 1/3 profit

If you do the math on the lease guarantee that would point to the company rate. But our per mile has not been anywhere near that low.

The big thing with lease is revenue not miles. The last truck I was on we were in CA and FM said he had little decent freight and needed a favor as the drop yards were full of loads that had short runs. One day we delivered 5 loads each was 20 mile or less and each paid 250 or more. This is not a normal thing but as you can see the revenue was good though the miles stunk. In contrast the load we are on now has a revenue of 4785 and is 2900 miles. (I lump all revenue then subtract all expenses) With our fuel plan 1400 will go to fuel. (though we switched routes due to weather so we might do a little better or worse have not ran the new route for stops)

Others can give you a better example as I share this from what I have seen in a limited time.

BTW I was a loan officer and underwriter then manager who's sole job was to look at the viability of small businesses and approve, deny, or make exception for a vary large bank. So a few trips through an operating statement paints a clear picture for me.

 

The year is more about getting a handle on operating the truck... its strictly NOT like driving a car. If you're quick on the upswing, then go for it!

Many L/Os don't even look at their settlements, don't have a plan, and don't know where their money is going. Your breakdown of fixed/variable/profit is spot-on for someone operating their truck reasonably. Just maximize your availability, keep your left foot under control, and you have a good chance of being vary successful.

 

Just maximize your availability, keep your left foot under control,


IP does your truck from another country. All the trucks I have seen the fule peddle is on the right. LOL

 

Haven't been able to tell left from right since I separated from the military. Right! No... yer other right! LOL!