Actual Annual Lease Op Numbers

$74,376 After taxes 61cpm

This is really eye opening. I’m making more than that as a measly second year company driver.

So bottom line. Paid a total of 61 cpm , no insurance benefits. But as an independent business, non company, driver, which includes some tax benefits if so structured. In fact, if done properly, there would be very little tax liability (mostly social security) after full 401k or sep contributions and full per diem. Question, what risks did this driver take on as a lease holder? Was there a risk of high maintenance costs, downtime? What we're the maintenance costs?

Regardless of risk factors, the lack of benefits alone, would make me not want to be a lease holder but a company driver. At minimum, I would need to net a buck a mile for the risks/extra non driving work and lack of insurance benefits. 61 cpm is not worth it.

Rainy,

Those are about the same numbers I came up with, but I ran numbers buying a truck rather than lease, so my truck payment was less.

I saw the other thread going related to this, including comments from PJ who is an owner operator and with whom I had discussed this over dinner.

My two cents on this as someone trying to understand trucking (

Our latest Know-It-All wrote this...

, G-town I saved you the effort), is that you really need to know what you're doing (in any industry) before you decide to bear the business risk involved in leasing or owner-operator.

My other two cents (I know I'm up to 4 cents now) relates to Casinos. There are professional gambles. But if you simply look at how much a gaming company has spent on their casino, its doesn't take a rocket scientist to know they make A LOT of money on people who think they are going to beat the house. If trucking companies promote lease or owner-operator, they are making more money from them than company drivers, because they are shifting more risk to the driver. The driver that makes more as an owner operator, manages this risk well. The driver that doesn't (a new driver), manage the risk well, makes less money.

If I ever to decide to take the leap and become a driver, I would NEVER consider lease or owner-operator until I had felt I had enough knowledge and experience to disagree with experienced professionals like Brett, G-Town, Old School, Rainy, and Turtle.

Here's another. His best week was awesome and he can't duplicate it no matter how he tries. He's been driving 4 years, been leasing 4 years and runs TNT Team Training.

**** All of these numbers are BEFORE taxes & without any benefits *****

Miles: 5221

Gross Revenue: $10,152 ($1.94 per mile)

Operation Costs: $4,157 (80cpm)

Net Rev $5,995 ($1.15 Per mile)

That sounds impressive. However, as I said, that is the best he ever did, and over 8 weeks it was a different story. That one week bumped up his 2 month figures.

Total Miles: 32, 908 (average 4113 miles per week)

Gross Revenue: $53,649 ($1.63 per mile)

Operation Costs: $30,416 (92cpm)

Net Revenue: $23,233 over 8 weeks

Weekly Average BEFORE taxes: $2,904 Average Miles per week: 4113 ****As time goes on, that bottom line weekly average will go down and down.****

These are fixed costs I could figure out from the settlements per week:

Truck $995.00

APU $70.00

Fed Hwy Tax $11.00

EZ Pass $7.00

Lic Permits $39.00

QC NavGo $11.00

Statement $15.00

Owner Occ $29.00

Payroll Fee $10.00

Total Fixed Weekly expenses: $1,187.00

In addition to variable costs, such as fuel, reefer fuepl, and especially the mileage charges

The lease ops can pay up to 10cpm in maintenance charges and "excess mileage" charges.

So run 5000 miles in a week and you are paying $500 just in mileage charges in addition to the $1187. Again, there are could be additional charges in these pages that are 7 to 20 pages long. There are "bond fees", the salaries of co-drivers, employer taxes and insurance premiums for co-drivers, and more.

Rather than nick pick all of that other stuff, I figured I would lay it all out this way.

CPM:

Cents Per Mile

Drivers are often paid by the mile and it's given in cents per mile, or cpm.

Reefer:

A refrigerated trailer.

APU:

Auxiliary Power Unit

On tractor trailers, and APU is a small diesel engine that powers a heat and air conditioning unit while charging the truck's main batteries at the same time. This allows the driver to remain comfortable in the cab and have access to electric power without running the main truck engine.

Having an APU helps save money in fuel costs and saves wear and tear on the main engine, though they tend to be expensive to install and maintain. Therefore only a very small percentage of the trucks on the road today come equipped with an APU.

“But I can pick my own loads. I’m the boss!”

Lease op right out of training

Went solo Feb 2018. This is his end of year totals for 2018

Gross Revenue: $113,000

Operation Costs: $80,000

Net Revenue BEFORE taxes: $33,000

Miles driven 60,000

Gross Revenue $1.88 per mile

Operation Costs: $1.33 per mile

NET Revenue: 55cpm BEFORE TAXES

He didn't do his taxes yet, so I didnt have a figure.

He's probably going to pay hardly anything in federal taxes, maybe a little to state if he's in a taxable state. He'll probably get his gross down close to 0 with all the deductions and the per diem.

It costs .75 per mile to 1.00 per mile just to operate a CAR or SMALL TRUCK. That is when all costs are taken into consideration like depreciation, insurance, maintenance, etc.

Wouldn't it be a lot higher for a big boy truck?

Wow! I was just wondering about doing O/O and I think I'll just stay company. 😮