Why do lease operators fail on a lease I want to learn why

Do you see any lease purchase deals where after the driver payed his truck payment,all the other varible and fixed cost,taxes,and health care brought home more than a company driver.I think you have to net not gross more than a company driver to warrent taking on the risk of truck ownership.It seems to me that these company's are selling a dream of becoming an owner operator but if your not making money it becomes a nightmare .These companies advertise making $160,000 but after all the deductions you bring home 50,000 if lucky.An experienced driver can make that without the headache of owning a truck.

 

I am a L/P and have been for sometime, The whole reason I have got into this was with the end goal of owning the truck, I manage my expenses and run my business with this in mind. I pay my self a stock wage and any profit after deductions and expenses are stored away in my business account. This extra is used if the truck goes down for any "Extended" amount of time or if I have a rough week I still get paid my stock wage. I have managed to stock away a decent amount of money this way for the business side of things. Again its very hard work and the deck can be stacked against you if you don't plan correct. Always have to have a goal and plan in mind.

 

That is the million dollar question..... Here is what you do, get some dice.... you know the rest.... LOL

 

I agree with Fajo. Work for free. Owning the truck is the end game. When you own the truck, stack money for when I breaks down. When you sell it, buy a better truck. The more money you put down on your new truck, the quicker and the more money you'll stack with it. Down the road, you'll buy a new truck with straight cash. When you do that, finance a second and put a driver in it. Rinse and repeat. This ain't no get rich quick game. It's a slow and steady game. If you get good, you might land a contract and make money more quickly. If you can get into management, that's where money starts piling up quick.

 

I admire owner ops that have the courage to make it work.But if Trimac advertises $80,000 a year.Wal-Mart says $76,000 in 1st year,I have a friend at Old dominion that made $100,000 last year,I myself made $79,000 last year and being home on the weekends,all with out the head ache of owning a truck.Is the dream to make money or own a truck

 

actually. it costs THEM much less to drive their trucks. they have fuel purchasing power where fuel is ONE BUCK.

the problem i see, is lack of miles. leasers fail becuase they have no control of their business model that they more then likely won't have anyways. not to mention, that home time kills that weekly paycheck and puts you in the negative. for weeks on end. trying to catch up.

 

For some people the headache of owning a truck isn't as painful as the headache of being someone's employee ... heck, even the idea of running on a dedicated or regional account makes my skin crawl.

 

I think the biggest single reason most l/p fail is that they don't treat the lease as a business. They think that because they are now an "owner operator" they can now take it easy and the money will just roll in. They see the settlement sheet and think that because they have a lot of cash flow that they are getting rich. In the beginning many get involved when the company runs the big numbers by them and they have no point of reference as to whether the company representative is being straight with them or not. Unless you have driven a truck for a few years and tracked expenses you don't really have the knowledge or experience to understand whether you can make a lease work or not. Most of these leases will wind up costing you in the neighborhood of $800-900/week. Many lease purchase people rush into a lease without spending the time investigating the industry and lease that is being presented to them. Some leases may start at or below $500/week. But, by the time you add the mandatory maintenance money, insurance and other costs, the amount will grow to the $800-900/week level.

Some make the mistake of getting into a lease/purchase so they can "own" a new truck. A smart businessman will look around, crunch the numbers and check out options. Anyone who has ever started or owned a successful business understands that you need to keep costs as low as possible, especially starting out. It usually makes more sense to save your money for a good down payment or pay cash. While you save you can learn the business. Believe it or not, you can stay a company driver and save enough in a couple of years to pay cash for a decent used truck. Most just don't have the patience to wait and save. They would rather do the lease so they can get into a truck right now. It takes discipline to be successful in business. There are few who will make it to the end of their lease and actually get the title.

 

Work for free.That really cracked me up when I read that.The orthodontist would have cracked up to when I would have told him how I planned to pay for my kids brasses while working for free.For my dream truck.My family needs money now.