Prime's lease deal. The math gets done.

I would not be caught dead in a CENTURY CLASS...

 

Leasing a Century doesn't make sense to me. Of course they are throw away trucks. Way to much plastic and fiberglass in them for my liking.

 

As an owner for many years i would never lease a truck...all you have said is so true and it really is a NO BRAINER.

But people still will not listen and go forward with this DEAL..

They are losing and behind right out the gate.

 

I don't mean to sound so negative, but drivers do need realize that these leases are not a good idea. You may think that since you are buying the truck it is in their best interest to keep you running, but it isn't.

Say you lease the truck and run hard make all your payments. After about two years you hit a slow patch for what ever reason. You can't take the truck else where to work cause YOU ARE COMMITED TO THAT CARRIER!!! You don't have enough money to buy the truck outright cause your payments were about $1200-$1500 more a month than if you bought it through a bank (and don't forget all the extra charges you paid along the way to). Since you don't have enough money to buy it, you probably don't have enough to ride out the rough patch. Your only option left is to turn the truck back in with nothing to show for your work. The carrier then turns around and leases the truck to the next guy for lets just say a couple of hundred less a week. This happens all the time. I'm not saying it happens at Prime, but all the signs are there showing that it could be happening.

I just wonder how many times they lease a truck. The profit off of leasing a truck (that they probably leased/purchased at a very low price and interest rate) and then sell after its past its usefullness is probably out of sight.

 

If you don't know a business inside and out you shouldn't open that type of business. I think from all that I have read the worst part of these lease deals is they will lease to people who have no business experience at all, and haven't even learned the trucking business yet.

Before I ever take the plunge into a l/o or o/o scenario I'll be absolutely certain I have the math down.

I love the Penske example of having a way to get a "loaner". I think it is great planning and spot on what someone should do to make sure their company doesn't stop operating because of a breakdown. But guess what? That loaner is going to cost money.

Under capitalization is the number 1 reason businesses fail. Lack of proper planning is right up there with it.

Before anyone opens their own business whether they are going to lease a truck or buy one they need to be properly funded and have a proper plan in place.

It comes down to the 7 P's:

Proper
Prior
Planning
Prevents
Piss
Poor
Performance

 

Maverick's entire fleet is Century classes. They're doing well and driver satisfaction is very high.

 

StSimeon you are totally correct that these leases just put inexpereinced people into businesses. Yes some have what it takes to excel, but many many more don't.

The deal I have set up with Penske does cost me, but only when I use their truck, which I never had to and don't plan on it (mostly becuase of proper maintence and planning). I look at the cost this way. If my truck does break down and I can get a loaner to deliver the load and make the shipper, consignee, and my carrier happy out of the bad situation then it is worth it. In a lease you usually still have to pay for the loaner in some fashion. Either you pay a mileage fee on your actual useage or they throw extra amounts on to your monthly payment (so if you never have to use a loaner, your paying for a service that you never used...thats profit out the window in my book).

 

We have columbias.

 

DOH! My bad... knew it started with a C.

 

You left out one small but very important difference between renting office space to run a CB business and renting a prime truck to operate a trucking business.

The C.B business does not depend on the person that rented him the office space for his success in selling and repairing CB's and paying his rent.

If you think the way prime operates is honorable then fine, thats your cross to bare. But I see nothing honorable about the way most trucking leases ruin families and credit or turn their drivers into speed freak sweatshops on wheels.