Company Driver Or Lease Driver?

im about to get started in the industry and was wondering how to approach this when looking for a job with a company. what are the key pros and cons to consider with wether or not to lease a vehicle through a transportation company?

Welcome aboard Thomas.

That's a very common question and we always recommend that drivers stay away from leasing or purchasing trucks simply because the economics of running a trucking company are dismal. It's a commodity service with average industry profit margins around 3%. That's not the kind of business you want to own.

We were just having a big conversation on this topic and you can find it here with a much better explanation - Let's Blame The Company For Our Failure. That will give you some insights into the prospects of leasing.

I am also new to trucking, but I can tell you I will not even consider leasing until I have at least 5 years under my belt. And even then I highly doubt I will go that route.

While in school we had several company recruiters come in to speak with us. Most mentioned leasing, one flat out said they offered it but please do not consider leasing for at least a few years, and one kept talking about the big numbers the lease operators were pulling down. When questioned he did admit that the numbers were gross not net, and then moved along. It seemed he really didn't wan to get into the actual costs of running a leased truck.

No, I have not leased a truck, so I do not have first hand knowledge of the ups and downs. All I can say is proceed with extreme caution, do tons of research, and run the numbers before signing. To me the small potential of increased income does not come close to outweighing the high risk involved.

Woody

I am going to lump Leasing a truck, and buying a truck..ie Owner Operator into one little pile to make a point that really won't be about how much money you may or may not make...because there are so many variables in making money in trucking, that is is really a mute point. But the following opinions, which are my own, are worth seriously considering. PROS AND CONS BETWEEN COMPANY DRIVER AND LEASE, O/O: for this exercise, CD= company driver, and LOO= Lease or Owner Operator.

CD truck: usually adequate, maintained by the company. LOO truck: usually adequate, maintained by LOO at their cost.

CD fuel: company pays LOO fuel: LOO pays

Now here is where the differences get a lot wider in scope. Everyone is of the opinion that being a LOO, you can pick where you want to go, pick when you want to run, and go home when you want to. Here is the reality of it.

CD: can request not to go to certain places, but will go where they send you. LOO: can say they won't go a certain place, and probably won't get a load there....but if you are gonna be picky, your DM may hold back loads, let you sit, give you substandard loads, etc.

CD: can request home time on a regular basis, according to the company policies, and will probably get home within a reasonable time frame around when you wanted to get there. The company will try to load you thru home, but may also allow you to go empty, or bobtail. LOO: can say they want to go home for a future date, but since a LOO needs to be loaded to make money, will not want to pull an empty home ( no $$ in that), or bobtail (no $$ in that either).

CD pay: may start out at .30+ per mile, but thats ALL miles, including deadhead miles. LOO pay: may be from $1.50 and up per mile, but usually doesn't include deadhead miles ( which you WILL have, and WILL cost you $$ and time, and TIME=$$).

And now its tax time... CD per deim and LOO per deim are exactly the same. CD has the usual deductions, and does the usual wage oriented tax return LOO has a ton of deductions, and has a CPA or accountant do the taxes from the 1099.

And the bottom line ??

CD and LOO will basically make the same amount of money each year. Sure....the LOO may look good on paper making $150,000.00...but then start taking off the stuff that cost thru the year, truck payments, truck insurance, medical insurance, truck services, tags, permits, licenses, fuel tax, ton mile tax, FUEL, tires, repairs, lumpers, scales, inspections, etc...the list goes on and on.

And one of the less spoke of downsides of being a LOO......the STRESS. In the back of your mind, you are thinking and keeping track of a million little things....am I running enough to make the payments this month, will there be enough money for the family at home, do I have enough money in the maint. acct to cover a breakdown, how are my tires, do I need to get the truck serviced, when is my DOT inspection due, oh, and its time for quarterly payment to be made to the IRS, do I have enough to pay that? Is that a new noise in the engine? it doesn't sound right... Will I make enough runs during bad weather, hope I get home for the holidays, but I'm not sure I can afford to go home......And that isn't even the short list.

So having been and O/O for over 15 years, I continually ask myself..."Where is the mystique in being an O/O?? What are these people seeing that I didn't experience out there ?? The freedom of being an O/O died out when all the regulation started. You will NEVER be your own boss, unless you run under your own authority...and that is another whole subject, totally. But for those even thinking about it,here's my advise...If you don't have a family to support, and if you don't want to get home to see what family you do have, and if you have about $100k you want to invest in a shiney ride that you will see wore out within 5 years with little to nothing to show for it...by all means....buy a truck. Its definitely a life altering learning experience.