On a recent stop at the Love's in Quartzsite, Arizona I met a young man tired of being a company driver and was looking through the magazine rack on the outside looking for the lease-purchase publication.
"I'm tired of being a company driver!" he said emphatically.
"Are you sure you want to do that?" I asked in return.
"The only way to drive is to be your own boss," he retorted.
Okay... you can't stop the ones who are determined to run their butts into the ground.
So my buddy, Rodney, left his gas hauling job to do this very same thing and the results were disastrous. He took on $1,200 a week payment on a brand new International on the promise that he could make $5,000 a week and there's plenty of freight and plenty of miles.
About 2 months into it he's taking a 3 day run on 3 hours sleep and has a day and a half to get there after brokering his own load. He told me that freight had died and he can not afford his truck payment. Well at $4,800 a month and revenues not much more than that I think you have a problem.
The company, which shall remain nameless, sold him and many others a bill of goods. They were convinced that if they participate in their lease-purchase (or fleece-purchase as I
like to call it) touting the pure money-making potential of being "your own boss!"
Except you really aren't your own boss, your name (or your company name) isn't on the title of the truck, and you got someone in a dispatch office giving you their loads. This sounds just like being a company driver to me except you now pay for fuel, maintenance, tires, taxes and other costs associated with running a truck. It's all on you now!
No one tells you about this when you sign the contract. You only hear about the tens of thousands of dollars you're going to make and how you'll be a millionaire by the time you pay off the truck.
Except you'll never really pay it off and at the end of your term you have a GIANT BALLOON PAYMENT WORTH MORE THAN THE TRUCK! How does this work when you have a house to run and mouths to feed?
Being your own boss sounds good until you're faced with the reality of it. Just because you and your truck made 5 grand this week doesn't mean that you get to take home that much. You get to live on what's left after you pay for everything. That's your profit. And you'd better set aside some for taxes because I promise you Uncle Sam wants his share.
Here's a breakdown of what a typical owner-operator pays for.
If you're savvy with expenses. You can make it work, provided your truck payment isn't too high. If you have a good accountant you can keep a good eye on where everything goes. If you live below your means you could actually have something to bring home.
What do companies that offer lease-purchase benefit from this? They just convinced an ambitious, hard-working truck driver to make their truck payment for them and they get to pocket the difference. It's yet another revenue stream for them and it adds more to their bottom line.
Do I think it's a scam? No, not necessarily, but I know some unscrupulous people that have a field day with the uneducated among us and the people in charge of lease-purchase programs know how to convince drivers to sign on the dotted line. I mean they have to convince you to do a job not many people want anyhow by overselling the potential while leaving out key details. They're in business to make money not make you money. If they told the whole truth about what you're responsible for most people wouldn't do it. Don't let them oversell you on it and know the truth of your numbers, your revenue, and your bottom line. You deserve to make a living when you work as hard and as long as you do out there so don't get duped.
By all means, be safe.
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