Thoughts on a Full Maintenance Lease?

hsingh_2 · Jun 16, 2021

wis bang said: ↑

My company is a warehouse company that has trucks.

When I started there, ten years ago, we had 8 tractors, all older than 2007, 2 fro '99 and 2000 and three tired box trucks.

We convinced the owners to try Penske full service. We started with two trucks and gradually added 2 or 3 at a time.

Unlike most companies, we don't go far but spend most of our time in central to north NJ and NYC, Long Island and the surrounding counties with a few short runs into PA.

Takes us over two years to put 100,000 miles on a truck BUT they are not gentle miles.

We goofed at first with the box trucks by leasing a few 'turnbacks' that ended up being garage queens but for only a little bit more we replaced them with three new Freightilners with custom ordered 102" wide boxes; problem solved.

Full service means you don't pay out for maintenance and ;wear and tear' AND get a free rental to use while yours is in the shop. Anything we do outside of 'wear and tear' IS charged back and the rental isn't free. Penske uses a few body shops in our area, one always higher priced than the one they prefer so we end up using that shop to avoid any complications when turning the truck back. Breakdown, call the 800 number, easy peasy.

We just replaced the first two [2014 Volvos] with 2021 Cascadias.

We rely on outside maintenance vendors and have no shop of our own. A local fuel distributor fuels up three nights a week and maintains a DEF tote with a pump and Penske is less than 2 miles away. It all works for us.

We get a brand new $139,000.00 tractor and they deduct around $1,600.00 a month which comes out to the cost of the tractor over the 7 years so, in our case, we only pay for maintenance and body repair we cause making the rest kinda free.

Expensive, maybe but we have a fleet of fairly new tractors and trucks instead of the old crap we used to run. At the same time we have upgraded trailers and even applied large vinyl 'billboard' logos to some. Our stuff looks good and it is noticed.

It works for us but you need to remember that we are working a tough market and are able to charge for it...you want a lift gate trailer in Brooklyn tomorrow? Sure but it is gonna cost you.

We've lost a customer when corporate wanted one national carrier for all it's DC's. Ten month later we are back with an increase.

One of the large 'ciber' retailers opened using a carrier from North Jersey and got less service than they wanted. After asking around the neighboring warehouses we got the call and charge more too. Throw in a dozen, mostly new, switchers with the same logos and we are definitely noticed.
Click to expand...

Hey thanks for the reply!

As far as the lease terms go, it's possible to do 7 years? I've heard and got back max is 5 years.

Also, do you get new trucks every year or 2 years? Few people told me that they give you lets say, 150k miles for a year, if you hit those miles, they give you a new truck.

The maintenance and free rental is a HUGE plus when it comes to leasing.

Do you know if there's a hefty down payment required? I've asked around, some even told me $35k down and another post on this forum said $21k down.

I think another benefit of me leasing, is that it allows me to add more than 1 truck at a time, depending on the down payment. This is the best way for me to grow my fleet, and faster too.

wis bang · Jun 16, 2021

hsingh28 said: ↑

Hey thanks for the reply!

As far as the lease terms go, it's possible to do 7 years? I've heard and got back max is 5 years.

Also, do you get new trucks every year or 2 years? Few people told me that they give you lets say, 150k miles for a year, if you hit those miles, they give you a new truck.

The maintenance and free rental is a HUGE plus when it comes to leasing.

Do you know if there's a hefty down payment required? I've asked around, some even told me $35k down and another post on this forum said $21k down.

I think another benefit of me leasing, is that it allows me to add more than 1 truck at a time, depending on the down payment. This is the best way for me to grow my fleet, and faster too.
Click to expand...

We started with 2 [titled 2014] and the 3 're-lease' box trucks in 2013 and turned them back on 2020 for 2021 Cascadias.. We added 2 or 3 more every year until we reached the current fleet size. (2) 2015 in 2014, (2) 2016 in 2015, (4) 2017 in 2016, (1) 2018 in 2017 and (2) 2019 in 2018 and that's when we got rid of the cranky box trucks for (3) 2019's built to order.

That's 11 tractors replacing 8 junkers over 6 years and they are spread out to update a few every year.

So we have a 7 year lease but our expected mileage is a lot lower than an OTR operation. I just looked and one of the 2019's has 148,435 miles since some time in 2018...

We do get charged if we go over the expected monthly mileage by more than 10%....and our limited operating area may have played into the 7 year term; I wasn't involved in that. They also deduct directly from the one bank account and unexpected charges can come as a surprise!

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