The Feds Just Announced All Lease Purchase Deals Should Be Banned

Who you LO with ? They sounded honest if they let you run the loads you wanted .

 

Leasing ala Penske or Ryder is not under fire here. It’s LEASE/PURCHASE as practiced by many of the mega carriers and yes many shady 1099 style companies. Leasing is a valid business practice for many companies that need transportation but don’t want to own the equipment. It may even work on a small one driver scale to lease a truck from a legitimate truck leasing firm that simply wants a monthly lease payment and doesn’t have a say how or where the equipment is run. That sort of lease will still be around. I’ve heard oftentimes some of these larger megas look at their lease/purchase programs as nothing more than a profit point. They know they can take a new unit and talk some sucker into trying to lease the truck, run him good for a few months then starve him out to the point he walks away, turns the truck in and surrenders any escrow then they do the same process with the next sucker. They’re getting their truck run for free or almost free, lease operator is paying for fuel tires tolls etc AND making the monthly note AND building thousands in escrow that he forfeits. Then they do it again . That’s the scam. The megas are doing it on purpose. It’s as bad as loansharking or the old company store model

 

I have to say it's actually both issues here, not just one is right and one is wrong. The "anything goes in business" is wrong. Too much toxic high-risk debt is also bad for the economy, It eventually leads to collapse like 2008-09. The consumer needs protection for sure. And yes! People definitely need to learn financial literacy on a large scale in this country these days. People shouldn't be taught how to hide from bill collectors, they should be taught how to budget their money properly. They should really teach it in schools, but they are busy with other things and I don't even want to get into that mess any time soon.

 

This should be pinned to the top of the forum.

 

Actually, I think you're right. It's a doozie

 

Actually it’s part of the same coin,because there are companies out there that have over expanded beyond their means,leased/purchased too much equipment and end up in financial trouble. Look at all of companies that have filed for Chapter 11 and or Chapter 7 over the past few MONTHS,not just years!
It’s not just owner/op one or two truck operations and 1099 companies that are affected!

 

Ordinarily, I don't subscribe to protecting people from themselves. I don't believe in seatbelt laws, helmet laws, etc... I firmly believe in nature. And, these sorts of laws go a long way toward preventing nature from cleaning the gene pool. Using the logic of seatbelt laws, why isn't liquor, cigarettes, fast food, etc... illegal? That said, I do make exceptions and this is an area where I can kind of get on board. On the one hand, if you're an adult, you should have sense enough to look at these things and realize most are little more than scams, just like we all should know the things I listed above are not a good idea. But, we make our choices and live out life as we see fit. But, OTOH, Ponzi schemes, pyramids, etc... are all illegal. Most of these lease purchase deals are similar in that the only person that's ever going to make any money is the leasing outfit so...

 

I vaguely remember awhile back when they were looking for people to share their stories, experiences and actual lease agreements…Somewhere there’s a thread on this already.

Not a fan of CDL Life so here’s a link to a freightwaves article on the subject.

FMCSA panel recommends ban on truck lease-purchase contracts

The Owner-Operator Independent Drivers Association, which was represented on the task force, agreed with TLTF’s findings and pointed out it has been concerned about lease-purchase contracts for decades.

“Many people are drawn to trucking under the belief that hard work guarantees success,” OOIDA President Todd Spencer said in a statement. “But predatory lease-purchase agreements prey on that trust, leaving drivers financially and emotionally broken.”

 

What do you do about people who continually sign up for them? They don’t learn their lesson at one place so they move on to another. It was on here someplace last year a guy was crying on YouTube about how terrible the L/P was at Prime and saying he was leaving. So what’s he do? Goes to Swift and signs up for a L/P.

 

I’m not too sympathetic with them. OTOH, I feel like the scam artists should pay the consequences for fraud. I’m speaking specifically of the Chicago based outfits.

The legit companies, while their L/P agreements are worded heavily in their favor, are not committing any crime that I’m aware of. It’s more of a caveat emptor deal.