Wondering how leasing works

No, really not a good idea for a new driver. I would recommend you drive company for at least a year before considering leasing. During that time keep track of everything you do as if you were an owner operator and see how you do. You may find you will make more and it will be less headaches as a company driver.

One big reason is that you have no idea what you will be running as far as miles and also don't know how your dispatcher will work. Leasing a truck is very expensive and if you aren't 100% committed and are basically living in the truck its not worth it. Just to break even you will have to run 1600-1800 miles a week. This will be a very big challenge as a new driver! If you are breaking even or in the negative every week your trucking career will end as soon as it started. Plus once you lease your company will not let you go back to being a company driver. There is a reason they do it this way!

Take things one step at time. Your biggest hurdle right now is to make sure that you even like driving over the road...

 

The way it works is. You pay all the expenses on someone else's truck (Werner in your case) Take more risk for more cpm. If you don't get enough miles any given week you might not get a check.

 

Leasing for newbies:

1. Sign contract, because you want to be "your own boss".
2. Move life into truck.
3. Venture out into the big wide world and wonder why you can't make ends meet.
4. Company reaps big profits from your labor.

Pretty much it, at least for a newbie. Stay company....learn the biz....ask questions....be careful....and have fun. Good luck.

 

Schneider is way better than Werner...try them if your able to get in with them.

 

Here's how it works:

First, you'll have to be brainwashed into thinking that you'll be able to buy your own truck and make more money. They say you'll make over $100k each year, be your own boss, go where you want, yada yada.

Then you'll sign the next four years of your life away. Quickly you realize that you're having to pay for EVERYTHING on that truck. Fuel, insurance, the equipment that the company puts on to track you, and above everything - the maintenance. Suddenly that $100k per year is looking more like $20k, but hey - you're an owner operator (lol!). Then you realize that you don't HONESTLY know how to drive a truck efficiently even though you think you do. That clutch starts wearing out, the fuel mileage isn't adding up, you're not doing proper preventive maintenance, the bills for repair escalate and more money goes out the window.

So you struggle along for 3 years. Barely making money but the notes are being paid. You notice that you're getting into the final few months of your contract but freight starts slowing down for no reason. The truth about lease purchase is that YOUR COMPANY DOES NOT WANT YOU TO WALK AWAY WITH THE TRUCK, so they start cutting into your miles and percentages. The little money you saved back starts fading away as you have to cover the difference. If you saved back enough you can cover this, but most don't - especially when they see the bill waiting for them to get the licenses swapped to their names after they finish the lease. Eventually you're in the hole - and the company takes back their truck and fires you. They sell the truck to a used dealer and pocket $30k and hire another newbie to take your spot with a new truck.

OR! You can be a company driver and have the company pay for your fuel and maintenance on their truck. You can learn to drive up and down the mountains efficiently, learn from others about how to make money in this industry, and perhaps save back your money to buy a truck on your own and not have to go through a company. If the truck breaks down, THEY pay for it and YOU get to go to a hotel on their dime. You can then decide after you have some experience that you want to stay out on the road - or maybe it's not your thing and you'd like to go home for a local job. There's no penalty for leaving. If you quit on a lease, the banks are going to come after you because of that contract you signed.

Your decision. Personally, I think it should be illegal for these companies to push lease/lease purchase on drivers for the first year of employment post-cdl school. It's a scam - if there were more successful lease purchases, why don't we see more of those trucks on the road? Why is it rare to see a former KLLM truck working for Landstar or another O/O company?

IT'S A SCAM!

 

Again, speaking for the Devil and giving you a different view point. I too however do not recommend leases but for different reasons.

The benefits for leases are they are a stepping stone to the world of Owner Operator.

As a company driver, you are normally paid by the mile. Therefore it is in your best interest to drive as fast as you can. There are tricks you can use to bump your governor. The company thinks they can keep you at 62 miles per hour but with a computer you can hack it. I will not post how to but the knowledge is out there.

When fuel was cheap, Owner Operators ran as fast as they could also. Now the game has changed. Fuel costs more then labor. So they want MPG. Companies give fuel bonuses. Some call them safety bonuses but it is all about keeping cost down. Idling bonuses also. As a company driver, if you can run fast enough, they can shove those bonuses as you make more if you run 74 then you do at 62 with their bonuses. The company loses profit but you make more.

If you are leasing from a company, the company now has made you a partner. You get paid per mile but you have to pay the cost of fuel so you have a reason to drive slower and make the company higher profits. You run 62 because you have to pay the cost of equipment break down and extra fuel that comes from operating a truck outside the design limits. Once you start thinking like the company, you are on your way to becoming your own company. At the end of the lease you have a good truck if you take care of it and a pile of metal if you run it like a company driver.

What is horrible about leases is the fact that they are so one sided. It is a contract you take or leave. It is not one you can discuss things and make changes. Most companies are charging you 12% interest on your money. Plus they get to write it off over 3 years. You buy a truck that has a value of $0 for $30,000 or so. Most walk away before they complete a lease. If you stick it out and are willing to pay the high interest cost or have no other way to finance a truck on your own, leasing can be a rewarding thing to do.

I do advice you to pay cash if you can. And if you buy a powerball ticket, you might be able to.

 

I take a little different slant on the lease programs than many on this board. I have been a L/O, an O/O (yes...I had the title(s) in my name) and a company driver over the years. I've made money with all three.
Lease programs, if administered right, are fine as long as you understand... really understand the terms and what you're doing.
You don't lease (or buy) just because you're going to make more money. You are accepting a great deal more responsibility and risk. If you're new to the industry, be a company driver for at least a year and learn some things. The amount of money you save by being a company driver the first year will far outweigh the potential you could make as a L/O or an O/O.
Then, if you have a good grasp at business, make a decision that is right for you. What's right for another person will likely be different for you.
But learn the business first.
The biggest problem (I see) for L/O's is they are sold a dream. You can be your own boss...you can make more money...but without the knowledge you gain the first year, you're likely to lose unless you've been in business before and understand risk-reward.

 

No,it's not a good idea,especially for new drivers. Think of it this way. If you were to take a job with you state's DOT as a machine operator, would you want to lease the loader or dozer, and pay for ALL of it's expenses? Don't do it my friend. As 48 packard wisely said:Stay company....learn the biz....ask questions....be careful....and have fun. And Good luck from me also!!