The only stupid question is the one not asked....

Discussion in 'Lease Purchase Trucking Forum' started by expedite_it, Sep 24, 2020.

  1. expedite_it

    expedite_it Light Load Member

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    Lease to own means the same thing as rent to own. Lease to own means renting something, and your rent payments go towards buying the thing you were renting. If you pay enough rent that it matches the selling price, you have bought the thing you were renting.

    Being on a Lease Purchase program at a trucking company sounds like it is leasing to own the truck because the word Purchase is in the name Lease Purchase. To purchase something means to buy something. But maybe the term Lease Purchase is a misnomer. Maybe the trucking companies that call their leasing program Lease Purchase for some other reason, and Lease Purchase is not lease to own.

    On the Lease Purchase program at US Xpress, does one's lease payments on the truck go toward buying the truck so that once one has paid enough lease payments to match the price of the truck, one has bought the truck?

    On the Lease Purchase program at most other megacarriers who have a program called Lease Purchase, does one's lease payments on the truck go toward buying the truck so that once one has paid enough lease payments to match the price of the truck, one has bought the truck?
     
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  3. Razorwyr

    Razorwyr Road Train Member

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    Its typically lease with the option to buy. In other words, you can lease the truck until they are ready to sell it. At which point you can buy it for the selling price, or not. If not, they sell it to someone else. Depending on your lease contract, some or all of your payments may go toward purchase, but i doubt you are putting up $150k+ in payments on a lease at a mega.
     
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  4. Chinatown

    Chinatown Road Train Member

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    One important factor is, if there's a balloon payment at the end of the lease.
    John Christner Trucking, the balloon payment is $1.00 (one dollar) and the truck is yours.
    Many companies, the balloon payment is the market value of the truck.
     
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  5. expedite_it

    expedite_it Light Load Member

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    Why do you doubt that a person could put up $150K in payments on a lease at a mega? Is it because if the truck is worth so much that the selling price is over $150K, the mega won't let you put as much as $150K credit towards the selling price because putting $150K towards the selling price would reduce the amount of profit that the mega could make by selling the truck?
     
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  6. expedite_it

    expedite_it Light Load Member

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    Yeah, that would be an extremely important factor.

    If the balloon payment is a buck, that's really the opposite of a balloon payment, but I know what you mean.

    If the balloon payment is the market value of the truck, then how is it lease to own? I mean, heck, if the balloon payment is the market value of the truck, then your lease payments are not really paying off the price of the truck.

    If your balloon payment is the market value of the truck, "Lease Purchase" is a misnomer.
     
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  7. Razorwyr

    Razorwyr Road Train Member

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    Because most leases seem to be a year or 2. That would require you to pay $75-150k a year towards it.... or even on a 4 year lease (I'm not aware of a 4 year lease option, but I'm sure there probably is one) you're looking at $37,500/year or $3125/month or $725/week with $0 profit for the company for $150k truck. That makes no sense on their part.
     
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  8. Chinatown

    Chinatown Road Train Member

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    Lease purchase is designed to make lots of money for the trucking company.
    I remember one driver that did the lease/purchase and at the end of the contract he had to pay $45K to get the truck.
    The dollar buyout is the best deal I've seen.
     
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