Want to avoid getting burned by a lease-purchase agreement?

That depends on what your goals are. I don't want to own the trucks beings they are under full warrenty and due to all the emissions controls. If you want to own, a strait out purchase is the way to go. I do it how I do it for more reasons than I can list here.

 

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Interesting posts

 

This msg. is for Frogmeister...........which company do you haul for? Works for newbie drivers too? thx

 

Wrong on many points. "If you lease a truck, your not an owner-operator." I have had my own authority for 10 years and leased my truck to myself through my LLC. I own the truck and Im an owner op. As far as being just a company driver, the huge thing you forget is tax deductions while an OO. You should never pay a dime in taxes. The truck payment, insurance, fuel, and all other expenses are write offs. You just need to do your research and stay with a company where your truck payment varies with your pay each week, drivers comment on line that their lease program works, and you own the truck after the last payment. Most companies dont do that. You should also have experience. I agree that lease ops for new drivers is often a scam. You certainly need plenty of OTR experience as many of the lease op complaints are new drivers who wouldnt make it as a company driver either. You also need to treat it strictly as a business. Finally, I can still run paper logs and make far more than company drivers. Tax free.

 

I'd appreciate anyone who can review my most recent lease/purchase plan that I setup for a guy I'd worked with in the past.

I paid for the truck that he picked out (2010 International Prostar, Cummins, 410,000 miles, very clean, $53,000) I put the title in his name and named myself as the lienholder. The loan was for $56,000, which included the money he needed for his tags and 2290. The interest rate was 6.75%. I didn't ask for a down payment and put up 100% of the money to get this deal going.

I bought a 53' 2005 Lufkin and outfitted it with an under tray system, trailer was $11,700 undertray was $2600 installed.

I provided a fuel card, and I pay 100% of the actual fuel cost, i.e., if his fuel costs were $2200 on a round trip from DFW to CA and back, and the round trip grossed $6000, I consider $2200 to be the fuel surcharge, and $3800 to be the linehaul, of which I keep 30% for the company, and 5% for the use of the trailer. Ultimately, it has been working out to where the driver gets 80% (+/- 1%-2%) of the gross revenue.

I charge back the exact charges for insurance, maintain an escrow account he can access for any repairs, and with regards to the trailer, specifically tires, well, we're still trying to figure out what we want to do about that but I'm of the opinion I'll assume the cost of the tires/brakes/air bags, unless he decides he wants to buy the trailer.



The plan is to run 130,000-140,000 miles/yr, and I have a small brokerage that has some choice lanes, which I put on all of my trucks before brokering them out, and it's panning out to where the driver I mentioned is on pace to make around $55,000-$65,000 after his truck payments ($1500/month for 36 months) and all other deductions (including an assumption of the amount of $ that will go into tires, PM/s, and the occasional 4 digit repair bill) and the company is making around $900wk from the 30% of the linehaul and the small amount of interest on the note.

Any opinions or ideas would be appreciated. I'm doing this same deal with a few other guys, and I have noticed that it's difficult for this to work if a guy wants to be home weekends, or is too specific on what he wants to do. Essentially, time spent with the wheels not turning really kills the potential of a deal like this.


Additional info: Driver gets paid every other Friday or Monday, i.e., 2x per month, if he's here on a Friday but loading out, i'll but a check that Friday for everything he's done in the past two weeks, or, if he's not going to be back to the yard until Monday, i'll cut him a check on Monday for everything he's done since his last check. I pay him before I get paid. Also, all the money is transparent, i.e., he gets a print out of what the trips paid, what the fuel deductions were for that 2 week period, and his percentage as well as the companies percentage. Also wanted to add that with the undertray system, it seems to be saving roughly 2/10'ths MPG.

 

Txredman looking for any other's to make this deal with?

 

Yeah, no screaming eagle poop! Does he need a new friend? LOL

 

TXREDMAN, looks like a pretty fair deal to me. As a lease operator myself, I stay out 3-4 weeks at a time, then
head to the house for 3-4 days. Keeps me profitable and keeps the wife happy. I also make it home for the
anniversary, thanksgiving, Christmas, and any other day the wife designates as a you need to be here day. The
way my lease works is: I'm responsible for servicing and repairs to the truck, the company is responsible for the
trailer. Unless someone you're hiring is financially stable, most folks can't afford two weeks between pay periods.
Things get expensive in a hurry on the road if the unexpected happens. Just a thought.

 

my buddy did a lease with ONRAMP in SLC,UT. he asked them multiple times if they had anything to do with CR ENG and they kept saying NO. they wouldnt give us the exact address until the morning we were within an hour.lol when I looked them up online it looked to me that they were part of them(CR). he calls when we get the taxi from the hotel and they give us a different address then I was finding on line, google maped it and it appeared to be CReng building. called taxi to get us and we arrive at CR eng's front door! the skank he talked to in the office to get the address from an hour earlier clearly told him, again, NO we are not cr eng! we walk in and he ask WTF, and she just smiled. checked out his truck option and they let him test it doing circles in a tiny parking lot at maybe 5 MPH. toooooo funny. he had no choice and I wasn't talking him home with my truck loaded anytime soon. forward 4 weeks and he gets an oil change and the air leaks they fixed that were never fixed. hes thinking maybe $700 or so and next thing you know hes got $9,000 worth of repairs needed. out of business!!!!! leases are mostly bad from what I see and hear. only way I would ever lease is to put me in a brand new warrantied truck and have a gun to my head! good luck