Pac Lease pros/cons

I think most cpa's will tell you to buy versus lease. Check with your accountant to see what is best for your situation. I bet he will tell you to buy.

 

Yeah I want to know about this too cause we have Ryder trucks and I want my company to switch to PAC lease for nicer equipment and from what I've read you get better service.

 

Im very interested in this also. I was wondering about downpayment, monthly payment, and if you do breakdown can you get a replacement truck for the down time?

 

OK, not going to make it a pi$$ing match but I will ask this. Can you get rates consistently that will support you renting a truck? What kind of rate do you figure will cover all of your costs, pay yourself a wage, and then leave some profit. Just guessing that a $2.50 a mile to the truck on every mile you might be at the low end, read that "cheap and eeking by, of what might make this do-able with those big payments hanging over your head. So what kind of freight are you going to be hauling and do you think you can pull numbers like that? Again, that is just a guestimate on my part. I could be wrong. Maybe you have figured the cost to roll on everything and know that number? If you haven't you should.

 

Well my situation is this. I've been working at the same place for four years. My wife and I drive as a team. It's a dedicated run of 4500+ miles a week. We split 72 cents a mile, 25$ per drop, and 200$ to load once a week. Now this company actually favours owner/ops and has an opening for a truck. The o/o contract runs the same run at 15-25000 per week with a 15% broker fee.

We have $80,000 cash. The options we have considered; Buy a used truck for 40k in cash and save the other 40 for repairs or put 20k down on a new truck and have a payment of $3200 a month.

A used truck looks good at first because its instant ownership and no payments but theoretically could be prone to more breakdowns. Also it would be almost worthless at the end of 3 year and would have to be replaced.

The purchase option *theoretically* should be more reliable and at the end of the 60 months of payments might have 30k+\- in value. The problems with buying are the high cost of payments, and no actual guarantee that there won't be massive issues with the truck.

This is where a lease comes in, and why I'm curious about the numbers. If I can get into a paclease for a lower down payment and a slightly higher monthly payment it may be worth the piece of mind. Especially if as part of the lease I am guaranteed a replacement truck at a reasonable rate for any downtime I may encoure. Keep in mind that at the end of the lease I have the option of buying out my high mile junk or continuing on with the same payments on something new. Not to mention if things go south giving back a leased truck is much easier on the credit than having them repo a financed one.

 

I'll say this. Those numbers look good but there's no way I'd do $3,200+ monthly payment. A truck only turns to junk if you don't maintain it. You throw cars away at 125,000 miles and get one with a lot less miles. You replace parts on trucks as needed and run well past a million. Personally I'd pick the first way, $40,000 will buy a lot of truck come Jan and Feb when freight is dead and the weak ones get repo'd and used truck prices look to be trending down after a couple of years rising. The other$40k is a nice maintenance fund and then some. Pick your truck carefully and I am positive you won't spend $3,200 a month fixing broke stuff although you may have a month or two like that or worse. There's no way imaginary piece of mind is worth $36,000+ that new truck cost you in a year when even with an older truck that had $15k annual repair bills you still came out ahead at least several thousand dollars. That's just me though..

 

Ok bringing this back from the dead... my 2 cents. You are a moron if you dump 80 grand into a truck. 80 grand could be invested in any number of near guarantees. Play with other people’s money. That what rich people do. They risk NOTHING. Do the fixed cost monthly payment. It’s just an operating expense like fuel. If you can’t make money doing that then it’s not worth doing. The PacLease costs what it does because they aren’t stupid. They know exactly what it costs to maintain the truck and what it will be worth. Sure they’re making a profit, but they are also taking the risk. You can just walk away from it.

 

A very wealthy older man(in his 80's and very active) who used to belong to a church we went to when we lived in PA gave me some advice that I started to follow a few years ago.He was an owner operator from the 1950's on and eventually owned a successful moving company that he sold.He started to invest in rental property's and eventually owned over 30 commercial and residential property's and did very well and got out of trucking.
He told me he wished he started to buy property's when he was younger because he accumulated most of his wealth from real estate . Trucking helped him finance the property's in the beginning ,but eventually the real estate took off and he was able to sell the trucking company ,hire a management company to manage his property's and enjoy his life and pursue some of his philanthropic ventures like funding food pantries .
Where I'm getting at is if you have $80k saved ,hold onto it keep saving and start strategically buying property's and rent them out .if you really want to try being an owner operator try the PAC lease ,it's a way to
Test the waters without blowing your nest egg on a used truck or a long term commitment on a new truck that will have issues to,all trucks break warranty or not.
Real estate has its issues too,and I'm sure people will chime in with some ,but I know a lot more people who have become wealthy in real estate than long term owner operators . I've been doing this for the last few years and can see in the not too distant future where I
Won't have to be in trucking if I don't want to and my real estate investments will provide for my family long after I'm gone. just a thought ,but Eventually you might not want to be burning all those miles in a truck and want to slow down .
I realize this thread is 6 years old and the OP made their choice years ago but just wanted to
Share what some successful people have shared with me