Those that need/want to Fleece Purchase from a carrier

There are a lot of outfits that are running scam lease and lease-purchase programs. There are others that do have a good program, and yet they have high failure rates as well. The odds are stacked against the operator, and he must do the work to even those odds up. I think a lot of the problem can be laid at the feet of the driver... not being adequately prepared, lack of cash reserves, not reading the contract, let alone doing enough analysis to determine if the situation has enough revenue available to support the costs and leave an adequate profit.

But yeah, any outfit that brags about how much money they make off of driving unsuspecting folks into bankruptcy ought to be closed down, and the owners jailed.

 

I think there may be more to it as well.

A friend of mine called and is considering leasing a truck where he is a company driver.

His reason........

They make more per week on the same loads.

I said what will you do with the increased money. Spend it.

You know the truck will need to have a savings account for repairs and you have to pay taxes. Never considered that.


Told him to stay a company driver.

I think improper planning and dollar signs are the failure.

 

Yuppers. That greed factor is huge. Inking one of these contracts without adequate cash reserves, thinking that settlement check is a paycheck on steroids, and not being inside their numbers by doing their own profit/loss sheets are major contributors to this.

Heck, a majority of the folks I talk to don't even look at their weekly settlement statements. They're running open loop, and won't even know if they're in trouble until their checks start bouncing.

 

I have talked to several lease drivers, including your company. One was CR England. He had been there for years and was on the 3rd truck.

I know you can be successful as well. Majority have no clue.

However, I still think to some extent that the companies are shifting some of their costs over to drivers. Especially when they are forced dispatch and control things on the trucks.

 

Roadmedic you hit he nail right on the head.. drove it in to the board .... Everyone says SPEND IT.. I pay myself a % every week the lions share belongs to the truck.. and eventually that truck is going to claim its money back.. you are spot on..

 

He kept saying that and it finally dawned on me.

I am leased to a company and he always likes what I bring home. He just never realizes that I have a maintenance fund and in addition a savings account for major repairs.

He just sees the dollars.

I asked what if you made 200.00 more a week as company driver. How much would you have.

He admitted that they would spend it.

It has to be a major factor with these leases.

 

It's not a factor with leases per se ... it's a fundamental failure that's at the core of all single proprietorship business failures, along with under capitalization.

Most people do not understand what a business is. Fundamentally as the owner of a business you have a stewardship to grow the value of that business ... that means all revenues belong to the business first and foremost. Then the business can pay you, after you ensure the businesses profit and growth.

When it comes to leases too many think of that statement as their paycheck, not their businesses revenues, act accordingly and eventually fail.

The other is under capitalization. Just because you can get into an asset - truck - with no money down, doesn't mean you can start a business with no money at all. You have to have a enough operating capital on hand to operate your business until it has generated enough revenue to support itself ... New lessees will start taking advances and immediately put their business in the red and keep it there.

 

The real problem is when you are paid .90 per mile loaded, .60 to .80 empty, according to whose lease it is, and paid on HHG miles, plus a fuel surcharge. If you run team, or put a lot of miles on the truck, you pay a surcharge for the extra miles over X amount. You train? you're now going to have .05 taken away from you too because you're making too much money now. All or parts of this is in most of the leases I have looked at.

 

If folks were sophisticated enough to project their revenue and expenses, acquire sufficient operating capital and actually READ the contract BEFORE they signed it, there'd be less failures. 90 CPM plus FSC just really isn't enough to stay afloat in a mileage situation.

 

PM me, I want to hear how you did it