Good Lease To Own Companies?

I was watching a YouTube video this morning and it was a guy that got his CDL and 4 days later he bought a truck. He got his DOT number and he thought he was ready to roll. Insurance companies are not interested in that conversation. The only insurance company that would take to him was progressive and they wanted 60K a year. That's just for the tractor, it doesn't cover the load. Then you need more insurance for yourself. What happens if you slip and fall in the shower at pilot and can't work for a month or two? That truck and insurance still has to get paid.

To add to what Old School was saying about profit margins, FedEx just hit double digit profit margins for the first time in the companies history. They've been in business for about 40 years and just hit an 11% profit margin.

This will blow your mind...i have lease Op friends making between 48 to 52 cpm solo profit before taxes. I average about 56cpm as solo

As a team trainer...i averaged 64cpm this year.. My lease friend averaged 40cpm as a team trainer.

Last week we got only 100 mile difference. He made 38cpm as a team trainer. I made 58cpm PLUS my benefits, workers comp and 401k. Most have none of those

I have the pay settlements to prove it.

His revenue was $9600 something but after expenses it was $2400ish. I made $3300 as a company driver.

This will blow your mind...i have lease Op friends making between 48 to 52 cpm solo profit before taxes. I average about 56cpm as solo

As a team trainer...i averaged 64cpm this year.. My lease friend averaged 40cpm as a team trainer.

Last week we got only 100 mile difference. He made 38cpm as a team trainer. I made 58cpm PLUS my benefits, workers comp and 401k. Most have none of those

I have the pay settlements to prove it.

His revenue was $9600 something but after expenses it was $2400ish. I made $3300 as a company driver.

You probably made more when you add in all the perks and bennies of being an employee. Health insurance, workers comp insurance, disability, 401K and the list goes on.

So, you have the settlements to from the lease op? He grossed 9600, and netted 2400.

What are his expenses that total over 7k for one week?

This will blow your mind...i have lease Op friends making between 48 to 52 cpm solo profit before taxes. I average about 56cpm as solo

As a team trainer...i averaged 64cpm this year.. My lease friend averaged 40cpm as a team trainer.

Last week we got only 100 mile difference. He made 38cpm as a team trainer. I made 58cpm PLUS my benefits, workers comp and 401k. Most have none of those

I have the pay settlements to prove it.

His revenue was $9600 something but after expenses it was $2400ish. I made $3300 as a company driver.

His fixed costs were $1600... Student salary, workers comp, employer taxes, student's health benefit (employer portion) fuel, tolls, "settlement prep" $225, QC, NavGo, phone app, accounting service, prepass... $1500 for fuel. Excess mileage.

A bunch of codes I dont know off top of my head. I have a chart ... But yeah... Its a lot.

Holy crap, I would sell my truck if those numbers were normal.....And I don’t train and get crappy fuel economy....

Sorry, emotional response. To answer the original question. None. Every company leasing trucks to drivers that are new, or old is too make their profit margin better.

Anyone who cannot buy their truck without a company helping them will go broke.

I lease onto a large carrier, but I own the truck. If it doesn’t work out I take my toy and move elsewhere. I use their size to my advantage, mainly insurance costs. There is much more to it, but if you can’t sustain the equipment that makes you money, you can’t afford to do it.

Sorry, emotional response. To answer the original question. None. Every company leasing trucks to drivers that are new, or old is too make their profit margin better.

Anyone who cannot buy their truck without a company helping them will go broke.

I lease onto a large carrier, but I own the truck. If it doesn’t work out I take my toy and move elsewhere. I use their size to my advantage, mainly insurance costs. There is much more to it, but if you can’t sustain the equipment that makes you money, you can’t afford to do it.

And I think it was PJ (or another O/O here) who ran into a $20K+ repair - out of pocket PLUS the downtime (with no revenue).

I can count on ONE HAND - how many people I've heard of in the dozen years around the industry - that actually completed a lease AND bought their truck after (that truck with 400K miles, and out of warranty). We HAVE had a few members here complete their lease, and walk away successfully - but countless others get buried in negative settlements, and leave the industry entirely in disgust (and NEVER come back to tell us WE WERE RIGHT).

I have some friends (like ACTUAL FRIENDS - not someone I know from the internet) that are O/O. One hauls steel out of the port and does OK (as long as his truck is running), and another has one of those huge RV style sleepers that hauls flatbed for Mercer (and he has $$ to being with, obviously).

We get inquiries here, about leasing from company, or buying - and for someone new to the industry - the question always has to be: WTF DO YOU THINK YOU KNOW ABOUT TRUCKING - that you want to take on that kind of responsibility, WHILE YOU ARE LEARNING ABOUT TRUCKING.

It's gotten to the point where I'm surprised we don't just tell people: GO FOR IT - TELL US HOW YOU DID. Because once many people have something stuck in their head - trying to use logic/facts to talk them out of it, is a waste for the 5,500 character limit.

Which again - is not to say there AREN'T O/O's that lease onto decent companies, that are net/net numbers that they are satisfied with enough to keep doing it that way.

Leasing gives you all the responsibility of owning truck - WITHOUT ACTUALLY OWNING THE TRUCK. And companies are not some "altruists", that are seeking to give people the wonderful opportunity to start their own business. They are businesses that seek to OFFSET THEIR EXPENSES but getting SOMEONE ELSE TO TAKE THEM ON.

So the bottom line is (and always seems to be) - from a BUSINESS PERSPECTIVE OF: RISK VS REWARD - to make marginally more than a company driver at the same company, while taking on the responsibility and lack of company benefits (which more than offset the potential additional income) - makes ZERO SENSE.

But people still seem to be able to talk themselves into it - regardless of the voices of experience here.

Happy Holidays...

Rick

Thanks for the numbers rainy. With those numbers I don't understand how a solo lease operator could do it. Also, why is he running for .40? That's company pay. I thought mega were paying around 1.00 for lease. Anyways...

PJ- I know your happy where you're at, but you were saying something about insurance costs. It is high, but only for the first couple years as long as you keep your nose clean. My first year was 26k, second year 18k, third year 9k.

Id actually be up for a conversation on how you're doing leased on to a mega cause I was thinking about buying a newer truck and trying to get the numbers to work. Anyways, have a great Christmas and be safe.

His fixed costs were $1600... Student salary, workers comp, employer taxes, student's health benefit (employer portion) fuel, tolls, "settlement prep" $225, QC, NavGo, phone app, accounting service, prepass... $1500 for fuel. Excess mileage.

A bunch of codes I dont know off top of my head. I have a chart ... But yeah... Its a lot.

Sid it is all a smoke and mirrors game. Many average $1.50 per mile...but after the expenses it comes out as a solo driver you are making between 48cpm to 52cpm.

The most I ever saw was 73cpm after expenses

Granted this is just what I have seen with people willing to give ne their settlements. Most refuse