Leasing...here We Go Again! Merry Christmas!

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Left Lane's Comment
member avatar

The leasing option is probably the most controversial topic that one can touch upon. Especially a 21 year old newbie entering into the industry. But even for an old fart that is pre-tripping his retirement years going forward, this can also be a huge decision? Should I or should I not? Why do experienced drivers keep leasing every three years and swear by it? I don't know. But I like many will listen to both sides. Just keeping the pot stirred.

Pianoman's Comment
member avatar
Just keeping the pot stirred.

You don't have to stir popcorn..

andhe78's Comment
member avatar

I love these threads, the gift that keeps on giving!

Had a brand spanking new Prime lease/op extolling the virtues of his decision to me the other day. Must have accidentally seemed too interested in what he was saying because he even gave me his number if I had any questions. Maybe he's planning to make the big bucks off referrals?

Derrick B.'s Comment
member avatar

I haven't seen anyone advocate leasing on this forum. Not sure it will be any different this time around. Having said that I leased a truck through Prime right out of training and my experience was favorable. You are certainly adding extra things to contend with besides just driving as a newbie though. The big one is taxes of course. You're your own business so you'll just be dumped with a pile of money every week that looks nice, but out of that, you need to save the appropriate amount for the tax man. If you don't get benefits from a spouse or somewhere else, there is that to consider too since it won't be coming from the company.

The amount they charge for the trucks is very high. By the end of the lease, you have not only paid off that truck but bought the company 2 brand new trucks on top. It's a nice racket the company has going for itself. The toughest part about how high the cost is is it makes going home no fun. At least for me. Say the base amount you'll need to pay that week is $1350. You can get a load or 2 that gets you home to cover that, but by then you've worked half the week making enough to just not go negative that week. Now you're at home for 3 days and the pay week ends and a new one begins and you're responsible for that $1350 again. Not planning on the right times to get home or how to get loads to cover the payment is how people end up going negative. I combated this by just not going home really. I would stay out for 2 months and get back for 3-4 days because I couldn't stomach having to pay to be home. In the year I leased a truck I never went negative, but it can happen.

Another situation you could find yourself in as a lease driver is a breakdown where you're out of service for the majority of the week. You still need to pay for the truck and could find yourself starting the next week negative.

There are really only a few "perks" that being a lease driver gets you over being a company driver, at Prime at least. The first is no forced dispatch. So instead of being given a load and that's that, I was sent a message with a preplan and my dispatcher asking me if it worked for me, and I could accept or deny it. It's really not so much of a perk because you will get yourself nowhere denying loads for most reasons. At the end of a week that crappy load you may have denied for greener pastures would have set you up for something much nicer that you didn't know was waiting. I only ever turned down one load so I didn't even notice a difference between leasing and company in that regard and it was because I literally could not find the place anywhere. The qualcomm couldn't find the place, google maps couldn't find the place, and they wouldn't answer the phone. All that in a tight pickup and delivery window I just threw up my hands and said nevermind. Being asked if the loads worked for me, and letting me check it out first, made me feel more in control of my destiny though for what its worth lol.

Sort of tied in with that is you can route yourself. Instead of having to use the route that their navigation sends you on you can get there by any means as long as it's there on time. This is something I used a good handful of times. Like if they wanted me to go over the GW bridge in NY but I could go over the Tappanzee and still make the appointment I would do that regularly. Or heading west if they wanted me to go over the mountains in Colorado but it made sense to just go 80 I could do that. Prime gives you the route they give you for a reason though, being that it usually has the cheapest fuel. So it doesn't behoove you to ignore it because you know better because you'll just cost yourself money.

In summary, I would say I enjoyed leasing for the most part with the one caveat being you are tied to that truck. Sure you can go home at any point but you are literally paying for the privilege. If that's something you can stomach the rewards are not that bad. Is it good enough to justify it? That's for you to decide. Many weeks I would take home checks where, after I take out my taxes and expenses, were double what a company driver could make on their best week. And then other times I would average out my pay per mile and it's on par with a company driver would have made. I'm not advocating for or against leasing. You can easily do very very well as a company driver with no need to add any other stress on yourself, as evidenced by most of the people posting on this forum. Hope I don't get lambasted by the company driver majority, just giving my experience as brief as a year experience is.

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.

Dispatcher:

Dispatcher, Fleet Manager, Driver Manager

The primary person a driver communicates with at his/her company. A dispatcher can play many roles, depending on the company's structure. Dispatchers may assign freight, file requests for home time, relay messages between the driver and management, inform customer service of any delays, change appointment times, and report information to the load planners.
Left Lane's Comment
member avatar

I haven't seen anyone advocate leasing on this forum. Not sure it will be any different this time around. Having said that I leased a truck through Prime right out of training and my experience was favorable. You are certainly adding extra things to contend with besides just driving as a newbie though. The big one is taxes of course. You're your own business so you'll just be dumped with a pile of money every week that looks nice, but out of that, you need to save the appropriate amount for the tax man. If you don't get benefits from a spouse or somewhere else, there is that to consider too since it won't be coming from the company.

The amount they charge for the trucks is very high. By the end of the lease, you have not only paid off that truck but bought the company 2 brand new trucks on top. It's a nice racket the company has going for itself. The toughest part about how high the cost is is it makes going home no fun. At least for me. Say the base amount you'll need to pay that week is $1350. You can get a load or 2 that gets you home to cover that, but by then you've worked half the week making enough to just not go negative that week. Now you're at home for 3 days and the pay week ends and a new one begins and you're responsible for that $1350 again. Not planning on the right times to get home or how to get loads to cover the payment is how people end up going negative. I combated this by just not going home really. I would stay out for 2 months and get back for 3-4 days because I couldn't stomach having to pay to be home. In the year I leased a truck I never went negative, but it can happen.

Another situation you could find yourself in as a lease driver is a breakdown where you're out of service for the majority of the week. You still need to pay for the truck and could find yourself starting the next week negative.

There are really only a few "perks" that being a lease driver gets you over being a company driver, at Prime at least. The first is no forced dispatch. So instead of being given a load and that's that, I was sent a message with a preplan and my dispatcher asking me if it worked for me, and I could accept or deny it. It's really not so much of a perk because you will get yourself nowhere denying loads for most reasons. At the end of a week that crappy load you may have denied for greener pastures would have set you up for something much nicer that you didn't know was waiting. I only ever turned down one load so I didn't even notice a difference between leasing and company in that regard and it was because I literally could not find the place anywhere. The qualcomm couldn't find the place, google maps couldn't find the place, and they wouldn't answer the phone. All that in a tight pickup and delivery window I just threw up my hands and said nevermind. Being asked if the loads worked for me, and letting me check it out first, made me feel more in control of my destiny though for what its worth lol.

Sort of tied in with that is you can route yourself. Instead of having to use the route that their navigation sends you on you can get there by any means as long as it's there on time. This is something I used a good handful of times. Like if they wanted me to go over the GW bridge in NY but I could go over the Tappanzee and still make the appointment I would do that regularly. Or heading west if they wanted me to go over the mountains in Colorado but it made sense to just go 80 I could do that. Prime gives you the route they give you for a reason though, being that it usually has the cheapest fuel. So it doesn't behoove you to ignore it because you know better because you'll just cost yourself money.

In summary, I would say I enjoyed leasing for the most part with the one caveat being you are tied to that truck. Sure you can go home at any point but you are literally paying for the privilege. If that's something you can stomach the rewards are not that bad. Is it good enough to justify it? That's for you to decide. Many weeks I would take home checks where, after I take out my taxes and expenses, were double what a company driver could make on their best week. And then other times I would average out my pay per mile and it's on par with a company driver would have made. I'm not advocating for or against leasing. You can easily do very very well as a company driver with no need to add any other stress on yourself, as evidenced by most of the people posting on this forum. Hope I don't get lambasted by the company driver majority, just giving my experience as brief as a year experience is.

Thanks Derrick.

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.

Dispatcher:

Dispatcher, Fleet Manager, Driver Manager

The primary person a driver communicates with at his/her company. A dispatcher can play many roles, depending on the company's structure. Dispatchers may assign freight, file requests for home time, relay messages between the driver and management, inform customer service of any delays, change appointment times, and report information to the load planners.
Old School's Comment
member avatar
Is it good enough to justify it? That's for you to decide.

Derrick, thanks for the run down! You were pretty convincing against leasing, all while extolling the virtues of it.

Are you still leasing?

I am curious how you came to this conclusion...

Many weeks I would take home checks where, after I take out my taxes and expenses, were double what a company driver could make on their best week. And then other times I would average out my pay per mile and it's on par with a company driver would have made.

There's a common theme among new lease drivers. That is their belief they are making more money than company drivers. You seem to be using your head more than your emotions, I like that. Why do you think the companies offer the lease option? Surely if they just wanted the drivers to make more money they'd just pay them higher wages.

I can tell you understand the concepts of performance based pay, you'd have to as a successful lease operator. Are you taking advantage of Prime's accounting to help you see how you are actually coming out? Now that your first year is on the books, what kind of number will you be putting down on your income tax forms as your income? That is really what will determine how you were doing. It's really difficult to use your weekly revenues as a lease driver as a measurement for how much you're actually earning.

I'm not trying to provoke you, I'm just curious. You seem to have a genuine desire to put out accurate information. I realize you're probably making better than some drivers, but what about the ones making around 80 thousand dollars per year? Are you exceeding that kind of income? I'll make that kind of money this year with full benefits including three weeks paid vacation time. There are some company drivers who exceed my numbers.

I don't promote leasing because I know the secret to earning the most in this business lies in your performance. It has nothing to do with "leasing versus company payroll." If it was as simple a formula as that to make the difference, we would all be leasing. You have to measure it by digging into risk versus reward. That's where it all falls apart for me.

Show Me The Money!

Rainy D.'s Comment
member avatar

By the end of the lease, you have not only paid off that truck but bought the company 2 brand new trucks on top. It's a nice racket the company has going for itself. The toughest part about how high the cost is is it makes going home no fun. At least for me. Say the base amount you'll need to pay that week is $1350.

Im against newbies leasing, but this statement is not true. That $1350 quote includes the truck payment, inusrance, prepass, settlement fees, QC rental, phone app. im sure there's more i missed. The weekly truck payment is usually between $995 and $1095 depending on which truck you choose. There are additiinal fees such as tire fund and excess mileage that is part of.your "completion bonus".... meaning the extra $30,000 they took from you over the years will come back to you, but only after they do an inspection on the truck and deduct whatever they need to in order to sell it. So again, you arent getting the full amount you put out, possibly $7,000 less or so.

So $52,000 per year x 3 years = $156,000. please tell me where someone can get 3 brand new trucks for that? nowhere. you cant even get a used 2016 cascadia for under $75,000 unless it has really high miles.

If you do the lease purchase you need to put down an additional $14,000 as a downpayment.

None of this includes the excess miles charge, so teaming then increases that weekly payment up to $500 for 5,000 miles per week.

The payments are high and there is little hometime, but its not providing Prime with 2 trucks for every one leased.

OOS:

When a violation by either a driver or company is confirmed, an out-of-service order removes either the driver or the vehicle from the roadway until the violation is corrected.

Turtle's Comment
member avatar

Derrick, I really liked the way you laid all that out. It's probably one of the most honest representations of leasing that I've seen. I definitely appreciated your comments, and I'm not trying to argue with you either. However, there are a couple of things you said that I take issue with. Mostly because I don't want newbies believing the stuff.

There are myths that lease drivers continuously believe, and therefore try to convince others of regarding the lease/company difference.

The first is no forced dispatch.

Untrue. You as much as admitted it yourself when you said you only turned down one load. Load acceptance is generally based on revenue when you are a lease op. Some loads pay better than others, and as you know, turning down loads will put you in bad standing with your dispatcher. That fact along with the never-ending weekly payment forces you at some point to take the load and keep moving.

Company drivers don't have that concern. They can send me to the ends of the earth, to the places that have the highest paying freight, or the lowest. I still get paid the same either way, loaded or empty. Company drivers are motivated by miles, not revenue. So instead of forcing myself to go to the same old freight lanes all the time, I get to see all corners of this country while getting paid to do it. In fact, I'm in good enough standing with my dispatcher that he often gives me choices of loads to pick from. And I can always turn loads down, but why would I want to? I'm getting paid the same wherever I go.

you can route yourself.

I route my self every day. I can't count how many times I've taking the Tappan Zee instead of the GWB.

Not only does my dispatcher not give a hoot on how I get from A to B, he's also often impressed by my ability to avoid weather, traffic jams, and other delays through my navigational prowess. As long as it gets there safely and on time, they simply don't care.

Dispatcher:

Dispatcher, Fleet Manager, Driver Manager

The primary person a driver communicates with at his/her company. A dispatcher can play many roles, depending on the company's structure. Dispatchers may assign freight, file requests for home time, relay messages between the driver and management, inform customer service of any delays, change appointment times, and report information to the load planners.

Dm:

Dispatcher, Fleet Manager, Driver Manager

The primary person a driver communicates with at his/her company. A dispatcher can play many roles, depending on the company's structure. Dispatchers may assign freight, file requests for home time, relay messages between the driver and management, inform customer service of any delays, change appointment times, and report information to the load planners.
Brett Aquila's Comment
member avatar

I've always found it interesting that lease operators always throw down that blanket statement - "I make a little more than a company driver." It's the lease operator's mantra. Yet no one ever shows any proof that it's true.

Not only that, but no one has ever given one logical reason why the company they're leasing from would allow that to happen. Why would they allow you to lease a truck from them if you were going to make more than a company driver, meaning Prime was going to make less? Why would a gigantic corporation create a system that allows you to take more of their share of the profits for yourself when they could just eliminate that system and have everyone be a company driver who would be making "a little bit less" than the lease operators?

"Net income after all deductions" is the line on the income tax form that no lease operator or owner operator has ever shown me. Not once. I've been asking to see that number for over 25 years now and not one single driver has ever shown it to me. They all just say, "I'm making a little more than a company driver" which tells me they must be pretty business savvy, and yet they're not willing or able to actually prove it.

So I put the lease operator and owner operator who make "a little more than a company driver" in the same category as ghosts and Bigfoot. People swear they exist. Many swear on their life it's a real thing. Yet after many years of rumors and rantings and fake sightings there is still no tangible proof whatsoever.

There has been no shortage of lying about these things though, which I also find interesting. People love attention. Many will say or do anything to make themselves look good or to attract attention. There's a library full of fake photos, videos, and tales from people who cared deeply about convincing the public that ghosts and Bigfoot are real, purely for their own gain.

So yeah, people will go to great lengths to look good or draw attention to themselves, and many will even conjure up fake proof. Yet with lease operators no one has ever even tried to show us fake proof.

I want you guys to think about something. I started this website in January 2007. One of the very first articles I wrote that year was So You're Thinking About Becoming An Owner-Operator?. In that time we've had over 12.5 million people visit this website and we've talked about leasing or owning a truck being a bad idea constantly. Yet to this very day I haven't seen one single shred of evidence that any lease driver or owner operator is making more money than experienced company drivers. Not one. We've had hundreds of people storm out of here in a tirade calling us filthy names for our opinions, and we've had hundreds claim they're making all kinds of money, and yet not one single shred of undeniable proof. Not one.

I thought by now I would have received at least a few hundred emails from people with a screenshot of that line on their tax form and a long rant telling me I don't know what I'm talking about. Heck, there are something like a million owner operators and lease drivers out there. Surely at least a few hundred of those would be making considerably more than a company driver and would have loved to rub my nose in it if I was wrong.

But so far, nothing. Crickets chirping.

So you decide if leasing or owning a truck makes sense...

  • It makes no business sense that you can take a single unit (or even a few units) and consistently make a great profit in a commodity business where scale is such an advantage.
  • It makes no logical sense that a company would allow you to take home a larger share of their profits than their company drivers do.
  • It doesn't seem likely that a single owner operator can compete with gigantic corporations who have huge advantages of scale, experience, reach, technology, money, and clout.

We keep hearing it's true, but we've yet to find any proof.

Owner Operator:

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

HOS:

Hours Of Service

HOS refers to the logbook hours of service regulations.
Robert D. (Raptor)'s Comment
member avatar

Derrick B.

I have NEVER SEEN any proof either. And why put up with the extra headaches! When I got into trucking years ago, I thought what a cool idea to own your own truck. We had this company who sold trucks and some of them were gorgeous and had all these bells and whistles on them. But I had a mentor who had been a small company of 10 trucks for 12 years. And he told me of the pitfalls, and I believe them to this day. As Old School and Brett have said there is no tangible proof, that L/Ops or O/O will do that well. Besides if you are comfortable in the income that you make as a company driver, WHY HAVE THE HEADACHES??? Now that I am coming back to trucking after a 8 1/2 years, why would I do it. Now if you would like to show us your numbers from you pay stubs and what you plan on filing on your taxes, maybe you could get people to at least see where you are coming from. But I doubt it. Good luck with that.

Raptor

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.

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