New To Trucking. What Is The Point Of Leasing From A Carrier? It's Not O/O And Seems To Be A Scam

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Trav H.'s Comment
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Thanks to much research, I've already learned a ton about the trucking industry and know what to expect going in. I simply don't see the point of leasing a truck with no experience, and even WITH experience, O/O would be better option. So leases have no place in my opinion. It seems to me that a lot of the drivers talking trash about trucker life and all the bad reviews are people who got suckered into a lease off the bat. They should have researched!

Also, I think there's a lot of people who are either lazy or on drugs and get found out for one or both, and they go straight to the internet to talk about how bad a company is. I realize I will have to put in 6mos - 12mos of hard work to get experience, and THEN I will have earned my right to complain.

This business seems to be what you make of it, and is almost 100% what job and task you know to go after. It seems like $65-75k is attainable in the second year, but you have to know which companies to drive for and also treat the job professionally. I don't expect to come out making that money right away. The first year is 100% about experience.

So to not stray too far, what in the hell is even the point of the lease? Seems like company driver or O/O are both vastly better options. Why does the lease even exist? Just to rip off sheep?

G-Town's Comment
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Welcome to the forum Trav H...

You mentioned research; absolutely the best and arguable only place to start is here, on the Trucking Truth website. Here is are starter kit:

You asked about L/O? You might want to read this article (found in the blog section):

Confessions of an Owner Operator

CDL:

Commercial Driver's License (CDL)

A CDL is required to drive any of the following vehicles:

  • Any combination of vehicles with a gross combined weight rating (GCWR) of 26,001 or more pounds, providing the gross vehicle weight rating (GVWR) of the vehicle being towed is in excess of 10,000 pounds.
  • Any single vehicle with a GVWR of 26,001 or more pounds, or any such vehicle towing another not in excess of 10,000 pounds.
  • Any vehicle, regardless of size, designed to transport 16 or more persons, including the driver.
  • Any vehicle required by federal regulations to be placarded while transporting hazardous materials.

Owner Operator:

An owner-operator is a driver who either owns or leases the truck they are driving. A self-employed driver.

Trav H.'s Comment
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I'm coming in with the mindset of putting in 12mos of hard work to gain experience and keep my DAC clean. 12mos no compolaining and just working. At that point then I will evaluate my situation.

Nothing is owed to me. I will be thankful of any company to give me the experience on their equipment. Too many people don't see it realistically. Your first year is like an apprenticeship. You can't look at it any other way.

DAC:

Drive-A-Check Report

A truck drivers DAC report will contain detailed information about their job history of the last 10 years as a CDL driver (as required by the DOT).

It may also contain your criminal history, drug test results, DOT infractions and accident history. The program is strictly voluntary from a company standpoint, but most of the medium-to-large carriers will participate.

Most trucking companies use DAC reports as part of their hiring and background check process. It is extremely important that drivers verify that the information contained in it is correct, and have it fixed if it's not.

G-Town's Comment
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Okay...thanks we totally get that. You asked about O/O.

Trav H.'s Comment
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I was more asking what is the point of a lease from a company when you can just do the owner operator thing?

Owner Operator:

An owner-operator is a driver who either owns or leases the truck they are driving. A self-employed driver.

G-Town's Comment
member avatar

I was more asking what is the point of a lease from a company when you can just do the owner operator thing?

Did you read the link I sent you?

Owner Operator:

An owner-operator is a driver who either owns or leases the truck they are driving. A self-employed driver.

Tommy's Comment
member avatar

I was more asking what is the point of a lease from a company when you can just do the owner operator thing?

Errrr, insurance? Ever try to get a quote with your experience?

Owner Operator:

An owner-operator is a driver who either owns or leases the truck they are driving. A self-employed driver.

G-Town's Comment
member avatar

double-quotes-start.png

I was more asking what is the point of a lease from a company when you can just do the owner operator thing?

double-quotes-end.png

Errrr, insurance? Ever try to get a quote with your experience?

The point is a brand new driver, researching school and training options should not be debating L/O vs. O/O as part of their research. It's a waste of time and energy.

If you haven't already done so, I'll suggest the same thing to you Tommy...read some of the O/O and L/O articles in the blog section.

Owner Operator:

An owner-operator is a driver who either owns or leases the truck they are driving. A self-employed driver.

Rainy D.'s Comment
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Heres the deal....new drivers who come into trucking often do so with lousy credit thinking trucking pays a decent wage, plus being OTR you can cut your overhead by living out of the truck. it worked for me.

Then the driver is shown these beautiful trucks that are hundreds of thousands of dollars along with all these upgrades and options. "Wow, if only i could have one and i could be my own boss by declining loads and taking off when i want! And everything is covered under a warranty cause it is a brand new truck!"

But you have no downpayment to buy a truck (minimum of $20,000 wanted by some places depending on your credit) and your credit is in the 500-600 range. Banks are gonna want 720+ on that credit score PLUS if you never owned a truck before, they may charge you a much higher interest rate---like 30%--- because you are considered a risk. Also, the insurance factor of a newbie plays in here.

So you cant buy a truck...but "I waaaaannnnnttttt the bright shiny toy!" Then the company says "We will lease you the truck with no credit check and no money down! If you dont like it, you can walk away at any time!"

Wow!!!! Totally awesome....where do I sign? i dont need to read that contract...i know i want that truck! Im gonna find another newbie to team with and we cant make a killing!

Two weeks later....My gross revenue was $8000 for one week but I took home $2700 and still the taxes arent taken out and i dont have health insurance? How can that be? So after taxes and health insurance im.making about the same as a company team driver? oh well, i have a shiny pretty truck.

What is this line that says Im paying $1000 per week for the truck and $500 per week for the mileage? What is this about a seperate maintenance fund? Im getting charged $1 every time we go through PrePass...thats gotta be 10 times a day while teaming! And tolls? We weren't paying attention to tolls. Holy crap, i paid $600 in tolls running in the Northeast! Look at my fuel costs!!!! Omg, i spent $2000 in fuel this week cause we like showering and eating at Petro! No one told me i would get charged for the Qualcomm , NavGo and even for a weekly settlement fee!!!

But i had some high paying loads over $2 per mile, this cant be! oh wait...theres a few here that were closer to a dollar a mile cause we wanted to go to Vegas. and here is a low paying load i took to swing home for a 34. wow, my load choices affect my pay. No one told me that. i thought i wouldnt be sent bad loads. why would they send me loads that pay so little?

Hmmm... maybe i should go back and look at my contract. I think they are screwing me! Im supposed to get to keep that $8000 revenue. Wow...all that IS in this contract. Maybe i screwed up....i should have done the lease purchase with the company so at least i would own the truck after 3 years.

Wait...even at my company that doesnt do a credit check i STILL need to put down $14,000 to order a truck as a lease purchase? Wow...and all the other fees still apply plus a balloon payment on the end?

Hmmm maybe this getting my own truck thing wasnt such a great idea. I will just walk away.and go company. What???? they handed me a bill for $7000 for the money to repair the truck after i drilled holes for my TV and play station added a bunch of speakers..a hole in the seat from.my co driver...and the money i lost last week by taking a few days in vegas. Im in the hole for taking off...but they STILL want their money! they are evil!

Ok..i will just run hard with my team mate and get out of the hole, then turn the truck in. Oh crap, my teammate just quit. Now it will take me much longer to get out of this hole. It would be great if i coukd train and pay that trainee less than an exoerienced co driver....but ...well i have only been driving a month and you need to drive a year first before training. ill just stay on the road and not go home until i find a co driver.

BAM!!! i just hit someone and jack knifed...omg! Now i have a $2000 deductible, have to pay for the tow, need to wait a couple weeks for repair and need to pay for a hotel. Uh...but i still have to pay that weekly $1000 for the truck, insurance and all these other fees?

Geez..im in the hole like $10k now.

Maybe i should have read that contract or waited until i understood trucking?

thats it....i quit! trucking sucks and so does my company!!!

OTR:

Over The Road

OTR driving normally means you'll be hauling freight to various customers throughout your company's hauling region. It often entails being gone from home for two to three weeks at a time.

Qualcomm:

Omnitracs (a.k.a. Qualcomm) is a satellite-based messaging system with built-in GPS capabilities built by Qualcomm. It has a small computer screen and keyboard and is tied into the truck’s computer. It allows trucking companies to track where the driver is at, monitor the truck, and send and receive messages with the driver – similar to email.
Heath L.'s Comment
member avatar

Trav H. I just want to say this that being a true independent contractor is a different animal than leasing a truck from a company in that you are responsible for everything versus the lease where the base plates, fuel taxes, tolls, pre pass, and hut may be paid by the company. Also in the event the truck being leased goes down with mechanical issues the owner may be allowed a rental in order to keep making revenue. There are companies with a bad lease program that can take advantage of drivers but there are some companies out there have a good leas program in place and offer support to their owners.

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