Questions If Anyone Knows About It

Being a successful lease operator is difficult. I should know since I've been one now for 2 years. So far it's been working out very well for me. Though I must say that most of the people I know that are leasing haven't been as fortunate.

First thing is my truck never stops running. Even when I'm on hometime my co driver is behind the wheel turning miles. If I were solo I know I wouldn't have been as successful.

My suggestion is be a company driver at first. If your want to get in your own truck 2 or 3 years down the road. Then you'll understand some of the risk that's involved.

According to the Commercial Truck Financing Calculator, financing $90,000 over 6 years at 6% would give you average yearly interest payments of a little over $3,000.

I got lazy and you caught me. That's what I get for trying to post between dog vomit cleanup sessions. (she horked in her cage while I was composing that message you responded to, and she horked on the carpet while I was composing this one. Maybe she's telling me that our lives will not be pleasant if we go on the road together?)

I just multiplied an interest rate I'd seen mentioned in another forum (7%) by the cost of a new tractor or tractor/trailer, and came up with a very rough range of $10-15k. That would be first year cost with 100% financing, not average cost with the necessary down payment, so no, I can't defend those numbers.

They can't get decent credit terms, and yet they can manage to save $60k - $100k in cash to buy a new tractor outright? How does that happen?

It doesn't. What does happen is they finance at unfavorable terms, and find themselves worse off than if they'd just taken a W2 for 40 cents a mile.

Just curious if these drivers "you know," who are not good credit risks, also happen to have piles of cash just laying around begging to be spent?

No, they don't. They historically have tended to live hand to mouth. For many people, that lifestyle goes hand in hand with having low credit scores, and having low credit scores leads to high financing costs, and high costs in a low margin industry do not lead to successful enterprise.

I have a couple of friends in LP arrangements, and leasing those trucks has taken them from where their money was tight to where they're at real risk of failure. But I don't think either of them could have walked into a bank and say "Here are my tax returns. I've been clearing $50k a year driving a truck, lend me $75k so I can buy the truck and make more money". Their choices were keep driving for somebody else, take a LP with no down payment but high total cost compared to the value of the truck, or come up with a down payment that was out of their reach to go with outside financing.

So, yes, in effect, I'm saying "if you're always trying to figure out how to get by until Friday's paycheck, you can't/shouldn't buy your own tractor".

And, as others have said, here and elsewhere across the internet, don't lease a truck from your employer.

I guess that's not very encouraging, is it?

Their choices were keep driving for somebody else, take a LP with no down payment but high total cost compared to the value of the truck, or come up with a down payment that was out of their reach to go with outside financing.

if you're always trying to figure out how to get by until Friday's paycheck, you can't/shouldn't buy your own tractor

I guess that's not very encouraging, is it?

I think that all sounds very realistic. As they say, hope is not a strategy. People need to understand the hard, cold facts of the matter when it comes to starting a business. Everyone always starts with, "Man, I'd love to own a truck and make all of the decisions myself!" Unfortunately that's where the evaluation portion often ends and signing on the dotted line begins.

I appreciate all the feedback, I understand the fact that an LP is more just a rental and assume all the cost. Really puts into prospecive all of the different angles, also after reading I will go the company driver route. I was hoping to make just a little bit more through the program even if I banked away money for maintenance and other issues. Makes sense that it could fail even if you are a penny pincher and easy on equipment. Seems as though its a roll of the dice, and odds are it's going to roll 7. I asked for the advice of more experienced people out there than me and I will heed the advice and not turn a deaf ear. I promise I don't complain too often as I woke up on the right side of the dirt today. Thank you everyone for your feedback. I apologize to post this to the general category and I thank you Brett that you allowed it to go on so I could make an informed decision to turn it down.