Question from a member of the public

At $950+/week for the lease, they're not hurting. Plus, they hold out an EXTRA amount each week to cover maintenance and repairs, and place that in an escrow account. When someone walks before completing the lease, they keep the escrow and recycle the truck to someone else. Same payment, same escrow requirement. They keep re-leasing until it's paid for. Then it's all profit.

 

This is actually both high risk for the loaner and the loanee and that's why you'll find the lender will charge the lendee a much higher interest rate then say if they borrowed it from the local bank. Banks and other lending institutions have what they call a risk factor, the greater the risk the more down payment (deposit ) is required and with it the higher the interest rate.

 

The leasing company makes the money from your payment.
Then the leasing company takes the depreciation on the truck off of their taxes.
Win. Win.

You, the leasor, do not claim any depreciation on you taxes.
Your lease payment is 100% expense.

If you're asking how do they absorb the hit when somebody wrecks one, they make millions weekly.

Deep pockets.
They are also self insured.

 

Yeah sure is, and again its a 2 way bet both parties are taking a huge risk at the end of the day though i think the lendee is at even more risk as you've got much more to lose if one defaults on payment one gets everything repossessed and still could be left owing the money don't think a lease works the same way as a home mortgage where one can quite literally hand back over the house keys and just walk away.

 

I bought a tractor back in the 90's the intent was to go through a specific structured 4 year program to have that tractor paid for free and clear, with a full title to my name. There would be a progression during those 4 years time in which I would be taught everything I need to know before I am handed a free and clear title to a now worn out tractor and told bye bye you are now a full owner operator with all this money, would you like a new tractor?

It never ends. Uncle sam would get his taxes. The state theirs, social secrity thiers. and so on. Local taxes too. Fuel taxes, Tires, breaking stuff to be fixed maybe even a engine replacement if you blew it or it blew up. Damaged freight. Trailer repairs.

And on and on and on. The joys of being a Owner Operator. I have said for years that being a W2 company driver is pretty safe as long you learn the industry. But after a certain time, if you are so inclined you can take a 1099 and go own a tractor trailer and everything that goes with such ownership. But it's not for everyone.

If I was still trucking without the disabilities etc incurred by wear and tear of trucking, I would be a O/O hauling medicine as part of a fleet leased to McKesson, one of the top three shippers of medicine, considering that this nation is aging for the next 40 years or so and it's a type of freighting that is way way way better than the common abusive crap that drivers suffer in grocery and cold storage among other things. Class attracts class. When you haul something that is both high dollar (In excess of a million per trailer load) and are involved with people all who have one goal in mind, helping the sick people who needs these medicines in our hospitals and homes it's so worth the effort and dealing with being a 1099 based owner operator. If you do well, you might be two trucks, then four trucks, then 8 trucks, and so on. However much the shipper has loads for you provided you are never late. That's the key to everything. You are running late already, get going.