Tell me why the lease option is so bad

Ask yourself this question.
Why would any company want to provide you the opportunity to own a new truck and pass on more of their profit to you, than they would an ordinary company driver?
Out of generosity? They want to show kindness to strangers?

None of the above, because it's not happening.
They want you to pay the road use tax, buy the tags, pay the insurance, buy the tires, pay for maintainance etc, ad nauseum.
Don't worry about where the money is coming from, because it will be conveniently witheld from your earnings and placed in an escrow account, which you cannot access.
During all this time, the truck is not in your name. You are not allowed to perform any modifications to the truck and have no sayso in regards to the speed setting.
You are not free to do anything with that truck without company permission.
You would be embarrassed to call yourself an "owner operator" because in all reality, you wouldn't be.

Oh, almost forgot. Since you will be classified as a "contractor", you will not be eligible for health insurance or be able to participate in 401k.
I'd go on, but it's too depressing. But, people fall for it every day.

 

If we're talking about a company lease:

There is a reason that those brand new trucks look so shiny...because they want to sucker you into leasing one. Seriously, think about it for a second...let's say (as you said) that you're fresh out of trucking school and you sign on to a lease...what now?

Well, you now have to pull the cost of maintaining your truck (which WILL have things happen to it...if you ask your instructor how often a truck breaks down and they say "Never" walk out of that class and do not return), as well as the cost of fueling your truck (up front at least). Oh and your payment for the truck (which could be up to $800 from some companies, less from others) is deducted right out of your check. If you have a slow week where you don't get enough miles, guess what...you get NO money in your pocket. The only benefit you get is a shiny new truck (that will break down) and more money per mile (that you have to sink back into the truck) It's a snake eating it's own tail.

And if you're talking about a lease through a dealership, here's a simple question: If you're fresh out of trucking school why are you going to invest that kind of money in equipment for a career that you may not like? Or that you can't cut it in.

And do yourself a favor...find a local paper with classifieds and see how many O/Os are trying to sell off their trucks. You'll find lots...guess why? One clue...most of the time nowadays, it ain't cause they bought themselves a new truck.

I'm in school right now myself and honestly, if you think about it and use a small amount of common sense, being a company driver is going to work best for you until you get a little bit of time on the road and ensure that you can handle it/understand what the h_ll is going on.

Oh and Mustang...I know someone that used to brag about owning his own truck to the family. And then, when he got hurt, we all found out that he had no health insurance because he was actually on a lease. Just proving that some people, no matter what the truth is, will say anything to "impress" people.

 

http://www.youtube.com/watch?v=5ydqjqZ_3oc
Warning: Clip has explicit language

 

F-U Pay me. That is rich. So hilarious and so appropiate.
One of my favorite movies btw, love Ray Liotta in anything too.

 

Another reason why company lease-purchase sucks is for the most part you are running the same equipment as the company driver (for the most part) and paying them upwards of $1200/mo to drive it...Anyway, if they say they pay $1.40/mi to experienced drivers, expect $1.20/mi, and expect them to not give any fuel surcharge at that number, so you are paying $.40/mi just to put fuel in the truck, now you're down to $.80/mi...oops almost forgot that other $.30/mi they take out and put in your escrow account to maintain the truck. $.50/mi doesn't sound bad...but who can forget the insurance on a $100,000 Commercial Tractor? bye bye another $.10/mile. Now you have a truck payment to make...that varies on the amount of miles you are running...if you run 10000 miles a month with a $1200 truck payment, that's another $.12/mi...now you're down to $.28/mi...and if you run 8000 miles, now your down to $.25/mi...congratulations, you now make less than a company driver.

 

Not to mention, no health insurance, 401k, wokers comp, paid holidays or vacations.

 

Just some .02 here. There are people who are quite successful with the lease purchase option believe it or not. Problem is they are in the minority. I mean a very small minority. That being said, the one thing that causes more problems than anything imo is a lease is usually by the week and that means 52 weeks, not 51,not 49, but 52 weeks. You shut that truck down for a few days at home and you better make sure you have adequate funds to cover your payment. If not you are in the hole and it is HARD to make that up!! There are some companies who have a lease purchase and drivers are very successful with it. Problem is most of the companies I know require 2 years OTR experience and one even sends you to a school for some training in being in a lease purchase program. Plain and simple, it's not for everybody. Think long and hard b4 you agree to such a program.

 

Swear to god, as I was reading Mrk's post this scene was going thru my mind!!

 

1200 a month? I've seen deals that are upwards of 2400 a month.And...And they are getting .90cpm.Well they also get .02 safety bonus....ok nevermind,now I get it.