Help

My husband is an over the road driver for a company making 86.000 a year now he wants to get his own truck I'm trying to let him know it's not a good idea but of course he won't listen to me he believes everything that people are telling him a broker and a company wanting him to lease with them he doesn't think these people are telling him what he wants to here please someone help me make this man understand this is not a good idea

Sorry to hear that, Marsha. Here's some TT reading material for your man. (Disclaimer: Trucking Truth does not advise leasing a truck as a way to make money.)

• Leasing A Truck: Do The Rewards Justify The Risks?
• My First Time Leasing A Truck - The Adventure Begins
• Getting Ready To Lease A Truck

Also have him come here and put truck leasing in the search box at the top of the page. I think the worst thing that can happen in a marriage is a breakdown of communication and trust.

The word "lease" is a most-often misused word or term in this industry and more information is needed. There are various times lease is used to refer to something in this industry:

1. To lease a truck (or trailer or other piece of equipment, aka; "asset") is a form of financing whereby the lessee, instead of financing the full price of the asset, such as when doing a loan, or full-price purchase, finances only the portion of the asset they use. Typically, leases are of a shorter duration than a loan contract and do not culminate in the ownership of the asset. This is not cast-in-stone, however, and some leases are geared towards a low end-of-term balance so the lessee may easily purchase the asset. Leasing is neither inherently good nor bad, but may be so depending on the circumstances. The primary reasons for leasing are to avoid tying up capital and to keep asset(s) off the company's balance sheet as they are treated as an expense rather than a liability (no loan). There can also be other operational advantages.

2. A lease-purchase is a form of financing with some similarities to #1. These are typically offered by trucking-industry carriers as a way for drivers to transition from company driver to lease-operator (L/O). These are generally considered a bad idea because the the carrier not only has the driver contractually obligated to the truck, but also controls the L/O's business by dictating the who, what, where and when of loads. The L/O is generally not free to seek other loads, nor to move the truck to another carrier. Because of this, in part, these arrangements are coming under far greater scrutiny by the IRS and other regulatory agencies. Most of these arrangements are very one-sided in the favour of the carrier and, in their worst form, amount to modern-day share-cropping. Some drivers have had success with this plan, but I think it is fair to say the overwhelming majority have not. IMHO, a lease-purchase is overwhelmingly used to shift financial responsibility from the carrier to the driver under the guise of "business ownership/self-employment."

3. A lease-operator is a person who brings a truck (whether owned, or it may be financed by some party other than the carrier) to a carrier and "leases on" with the carrier. This is also the most common arrangement for owner-operators (O/O). In this scenario the L/O is actually operating under the carrier's authority and insurance and the carrier is generally supplying all the business and doing all the paperwork. The L/O may have their own trailer or they may be pulling the carrier's. There is a contract stipulating the arrangement between the carrier and the asset (truck) provider. In this case, as in #2, the L/O is generally not free to seek loads from other sources other than the carrier they are leased-on to, but this is not always the case. However, should the asset provider become dissatisfied with the arrangement they can terminate the agreement and move their asset to another carrier or get their own operating authority and become a carrier themselves.

So, Marsha, what do you mean by "lease?"

Not4hire explains:

3. A lease-operator is a person who brings a truck (whether owned, or it may be financed by some party other than the carrier) to a carrier and "leases on" with the carrier.

Let's just use the most common definition: some person who has their own truck (purchased, rented or leased but not stolen) and desires to "go into business for themself".

The main idea is that said owner/operator wants to be responsible for everything from fuel purchase to maintenance/repair to insurance, and make more money at it than a company driver could make.

True, that can be done. But you probably crimp the other parts of your life in this pursuit. This is what OP Marsha is concerned about.

@Marsha, you quoted "$86,000 per year". Yes, an O/O can earn that much. But the company forgot to tell you that you might spend $50,000 per year in that "fuel purchase, maintenance/repair and insurance" I mentioned. Leaves you with $36,000 to live on. A company driver can make that easy, and no "business" headaches!

Let's just use the most common definition: some person who has their own truck (purchased, rented or leased but not stolen) and desires to "go into business for themself".

Actually...... not4hire laid it out pretty clearly. There is more than 1 type of " Lease". And.....very important differences between them.

Id like to go work for the company paying 86k/yr for OTR , my wife wouldn't even care if I only came home twice a year at that point =p

Here's something I learned the hard way;

Take advice from as many people as possible, but DO NOT make your decisions solely on the advice of those who stand to profit from your decisions.

Good luck!