Serious question to any and all owner operators.... please

I would not do a lease purchase from a trucking company deal.
Best reasons not to;
-if the job becomes compromised (unpleasant, difference of opinion, loss of significant customer, etc) you can't terminate your "job" with said carrier to put the truck on with another carrier with a better prospectus.
-a truck is a tool to do a job! The "real money" is in the trailer! What you haul, how specialized/good you are at it, therefore the more premium rate you can charge/be paid so that the truck actually yields a PROFIT. It is a business after all, do you want to buy a truck to be a truck driver, or are you a businessman? That is the real question.

My opinion, only reasons to;
-easy
-no, or very little initial capital investment. Very poor business plan!

 

I don't think you would make enough to warrant having all that headache...unless $1200 a week is enough for you. I make almost that much driving someone else's, I can't think of why I would want to buy my own for the chance at making a couple hundred dollars more.

The only way I think I would even consider a lease purchase from a carrier is if the truck got really good fuel economy, and I was guaranteed a dedicated route where I would know how much I'd be grossing on a week to week basis, then I would know what kind of numbers I'm looking at.

 

Never get your truck where you get your loads.

Never get your loads where you get your truck.

 

This is not really a question for random people on the Internet.
The best advise I can give you is to find an O/O with LOTS of experience that you know and respect, take them for dinner and ask them for guidance. This is more of a conversation than a question.
The last young person that came to me really seeking guidance on this, our first discussion was about 4hrs. It's not a yes or no question.

 

I went to a meeting with Greatwide, when they were awarded a contract for dedicated account. We were told, "go find your own truck & we will arrange financing plus $1000.00 toward your downpayment." I didn't take the offer, because I found a good tanker job. My friends took the offer and most did quite well. The ones that failed, got a used tractor from a used truck lot & the maintenance costs broke them. The majority & success stories, bought their used tractors from dealership trade-in lots, mostly Freightliner & Volvo dealerships. This was not a lease to own deal. Check the website if something like that interests you. They even offered, for a small monthly fee, to do all your business book keeping/record keeping or you can do it yourself.

Also, check the OOIDA website; a good sourse of information for 0/0's and small fleet owners.

 

It is never a good idea to lease a truck from the carrier to whom it will be leased. Payments are much too high and as others have stated, you will leave the truck with the carrier should you leave before the end of the lease. Rates with most of these carriers who do lease trucks is normally low mileage rates. You would be much better off if you either saved your money for a good down payment (usually 10-30%) or pay cash. You should keep your payments as low as possible. I would not want to start with a payment of more than $1,200/month, preferable under $1,000/month. You also need to have money set aside for major repairs. ALL trucks break, including those right off the showroom floor. It isn't a matter of if, but when they will break. Having a warranty is no guarantee that any breakdown will be covered, especially the tow bill. I would not worry about which brand is better starting out. Instead, I would encourage you to look at value for the money. Many drivers never seem to be able to make the transition from driver to businessman. Once you buy a truck you are no longer a driver. You are a businessman who happens to drive a truck. Don't fall in love with any truck, it is only a tool a businessman uses to earn a living and make his business work. There is no reason a good used truck won't make money for you as long as you check out the truck, or pay someone else to check it for you. There are some good values around, but it can take time to find them.

Financing your truck can be a challenge, especially with today's banking environment. There are lenders who do class 8 truck loans, but not all banks make them. Most consider them as high risk and for good reason. Most dealers have financing sources, but you will pay a premium for their sources. It will be much better for you to find your own financing before you even start to look for a truck. Your current bank or credit union would likely offer more favorable terms than anything a dealer would offer. There are also legitimate leasing companies that lease trucks and you own it when you make the last payment.

If you lease a truck to a carrier, you are only required to have bobtail or unladen liability insurance on your equipment. Your lender will usually require that you have collision or comprehensive insurance on the equipment until it is paid off. Carriers will also require that you carry either workers comp or an occupational accident insurance policy in case you get injured on the job.

If you get your own authority you are required to have a minimum of $750,000 in liability coverage. However, most shippers and brokers require that you have at least $1 million in liability and $100,000 in cargo insurance. You don't need bobtail insurance if you run your own authority and own your equipment.

 

You shouldn't even think of buying your own truck and getting your own authority . You can't compete with carrier rates . As others said , lease purchase is also a bad decision .
Have you considered being a driver for an expedite fleet owner ? They do have tractors and you get to choose the loads you pull . It would give you experience until you have funds to buy a tractor . Lease companies like Ryder and Penske are a good place to buy good , well maintained tractors . Some have been leased to small private carriers .

 

Jeez, for that matter there should never be ANY O/O according to you RickG. And that's about as far from the truth as you can get.

O/O fill a very important part of the transportation market and can very much make a profit and respectable living out here.