Prime Inc Pros And Cons

Topic 24501 | Page 2

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Kody S.'s Comment
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I guess the subject kind have got a little off topic I love everyone’s input and do appreciate it yes my credit might not be the best in the world to go out and buy a truck out right but I do have start up cash for my business like I said my family is not hurting by any means as my wife makes decent money I just want to provide more for them I was just trying to know the pros and cons of prime leasing and how they work I have done research and have talked to several prime lease drivers that are or have been decently successful.

Thank you all Kody

G-Town's Comment
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Exactly how did we get off topic? The advice is 100% spot-on. Like I said; you either want the truth or “smoke”. I think you want the “smoke”. Sorry, not gonna happen here.

Not sure who you spoke to, but most L/O that come onto this forum have no clue what success is as it applies to leading. You take all of this advice or leave it...

Bottom line, rereading the last line of your initial post? You haven’t mastered all that is necessary to be a top performing company driver. You will lose your a** if you lease now...a hasty decision.

I urge you to carefully reread every reply. Especially PJ! Until you become an expert in this profession, understand how it works; a decision to lease is foolish.

Rainy 's Comment
member avatar

I guess the subject kind have got a little off topic I love everyone’s input and do appreciate it yes my credit might not be the best in the world to go out and buy a truck out right but I do have start up cash for my business like I said my family is not hurting by any means as my wife makes decent money I just want to provide more for them I was just trying to know the pros and cons of prime leasing and how they work I have done research and have talked to several prime lease drivers that are or have been decently successful.

Thank you all Kody

Here is a breakdown....

You have to team train and rarely go home to have a revenue of $230,000, running about 5000 miles per week. (you can't train for 9 months and one winter season, so thay number is impossible anyway to start.

The truck payment is $52,000 per year. You are also required to pay ezcess mileage charges and a tire/maintenance fund up to 10cpm. Translation: $500 per week just in these costs.

When training, you pay the weekly salary of the student ($700) or A seat co-driver (much higher rate, upto $1300) plus all employer taxes, OWCP, and any health insurance premiums that would normally be paid by prime. so have a co driver for 30 weeks, that is $30,000.

you pay all fuel approximately $50,000 per year. Depends on the loads you accept (heavy loads, high miles low pay, mountains).

You pay $500 to install the QC plus $10 per week for the NavGo. $10 per week for the settlements. $1 everytime the Prepass buzzes. All tolls (so you will go longer routes to avoid) $5 per week for the phone app. $1500 to $2500 (or more per year) for accounting services.

Insurance is $400 per week for truck, trailer, cargo, OWCP.

Deductibles are $1000, $500, $500 for accidents and you will hit something as a newbie. If you train, you are responsible for the accident deductible caused by your student..and that will happen too.

Insurance only covers cargo on an accident, so slam on the brakes and the meat goes flying? You are on the hook for the whole shebang. in the tens of thousands of dollars. Set the reefer wrong or strap some sheetrock too tight on flatbed and it breaks and you pay. The load gets rejected cause you didnt see the blood in the trailer and you didnt want to waste time in a washout, you pay for the whole cost of the load.

If the truck goes in the shop for 24 hours or more, you get $250 plus a loaner truck "if available". You foot the bill for tows and hotels. You must pay hotel bill for the student as well.

If you are paying attention, that $230,000 figure just dropped to about $88,000. Thats before taxes. So now another $15,000 or so...and you are down to $73,000.

This does not include health insurance, life, disability, vision, dental. There is no 401k Prime matching.

A rookie lease op, when all is said and done will make profit wise about $55,000 to $60,000 the first year because they cannot train. But again, no insurances or 401k.

"But theres a completion bonus!" yes, there is, and it is made up of the cpm charges you paid and does not include interest so they are giving your money back only if you complete the lease. But that doesnt mean you get it all...they inspect the truck when you turn it in. My boyfriends $18,000 completion bonus dropped to $11,000 after they added up all of the "damage" caused by his drill holes for the TV, satellite, microwave, PS and more. Got paint scratches? it comes out. Worn belts? it comes out. My boyfriend got stuck with a $9,000 bill for engine damage caused by Flying J fuel and he never got a dime back. (long story).

"But its a walk away lease!" Yeah..and you walk away with any debt from being in the hole, plus the truck turn in inspection. I know drivers who went back to company and had to pay weekly deductions back to prime for the lease debt. And you dont get the cpm returned because that was a completion only bonus.

And if you still dont believe me...someone at the terminal can take a picture of the flyers advertising. "Solo Lease Drivers average $1300 take home. Lease trainers average $2300 take home. For every week you arent training, you are losing $1000."

Hmmm... I make more as a company driver.

And i dare you to ask how often they go home. I went home 42 days last year...my boyfriend was home 18.

Terminal:

A facility where trucking companies operate out of, or their "home base" if you will. A lot of major companies have multiple terminals around the country which usually consist of the main office building, a drop lot for trailers, and sometimes a repair shop and wash facilities.

CPM:

Cents Per Mile

Drivers are often paid by the mile and it's given in cents per mile, or cpm.

Reefer:

A refrigerated trailer.

Rainy 's Comment
member avatar

Ask those successful lease ops a few numbers since they just had their year end settlements, its a great time to ask.

1.) Miles run in the year

2.) Gross Revenue

3.) Year end operation costs

Divide 2 & 3 by the miles to get your pay per mile and your operation costs per mile.

These usually come out to be about

$1.25 - $1.40 in revenue .75 - .95 in operation costs.

Before taxes it comes to between 45cpm to 50cpm.

Which means Lightweight rookies start at 49cpm plus a fuel bonus. they make more than lease ops.

Dare them to show you the year end total sheet. I have a few from my very good friends.

CPM:

Cents Per Mile

Drivers are often paid by the mile and it's given in cents per mile, or cpm.

HOS:

Hours Of Service

HOS refers to the logbook hours of service regulations.
Rob T.'s Comment
member avatar

Kody you may think people here are being a little harsh showing you the flaws in your plan. The moderators here know very well what they're talking about and don't want you to fall into the trap of being given bad, misleading information. I've been around this forum for a few years and we've had plenty of lease drivers come in here, one even claimed to be making 3x as much as a company driver. Nobody that has made these outlandish claims has ever shown proof of this income. Some drivers want to be an O/O or lease operator because it's been a dream of theirs. PJ is one of those. He understands the risks involved and due to other income sources he's able to take the risk. My biggest worry for your situation is with your relationship. Being an OTR driver is never easy on marriage and family. Do you really want to add in the stress of being home less because you can't afford to not have miles being run? Nobody here can stop you from leasing if you're determined to do it we just want you to be aware of all the risk involved. At a minimum please be a company driver for a year or 2 so any mishaps you have won't be on your dime. As a rookie you will most likely mess up. Most rookies hit something. Rookies often times take a while to fully understand the hours of service and how to maximize them to your benefit. You will also see the costs involved in the repairs to give you a better idea of how big of a savings for maintenance you want. Even getting a brand new truck things will go wrong and when your not driving you ain't making money but those payments continue to come. I may have missed it, but what type of money are you hoping to make? Regardless of what you decide I hope you stick around and keep us updated on your journey

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.

HOS:

Hours Of Service

HOS refers to the logbook hours of service regulations.

OWI:

Operating While Intoxicated

Dan S.'s Comment
member avatar

It's actually quite simple.

There are SOME,L/O who do manage to make it work for them depending upon their INDIVIDUAL circumstances.

Some do, MOST don't. But enough do, to make the multitude believe they can.

IF you want to make BIG Mega bucks? Get into Sales, in talking asking BIG TICKET ITEMS,

There's a reason less that ONLY 001 to 0001 of most people are sucessful in Sales. Because it's NOT selling that makes you successful, it's finding people to SELL to.

Trucking? Its NOT leasing or even owning that makes you successful and money, it's applying the basic and fundamentals of being a TOP TIER DRIVER.

A LITTLE IS A LOT, AND A LOT IS A LITTLE.

If you ask someone what's the difference between

.01 and .0001 they will tell you not much.

It's that small difference that makes a HUGH difference between being successful at anything.

It's DAILY consistently adhering to the basic amd fundamental process and procedures that separate the 01 from tge 0001.

Most L/O aren't doing so well from what I've seen.. They appear to be because they're actually are spending their OPERATING CAPITAL and an ever increasing rate.

They're cash inflows don't match they're cash outflows. They're already operating om a razor thin margins, and it doesn't take too much to knock them into a hold.

They become desperate, they become trainers. They spend more and more to be out, Stress levels rise, health is affected, relationships,...........

Further and further down the rabbit hole they go..........

Me? I'm applying the K.I.S.S. principle

Keeping It Simple STUPID

Robert B. (The Dragon) ye's Comment
member avatar

I'll keep it short and sweet since others covered the costs fairly well.

If you can't afford to buy a truck, don't buy a truck. You say the goal is to eventually have a small fleet but lease purchase won't get you there. You build a fleet by establishing business credit and that won't happen at Prime, Swift, Celadon, Schneider etc. If you're hell bent on buying a truck, figure out what you need, then triple it. Have that money set aside before you ever inquire about a truck and then be ready to spend it before you really watch any revenue roll in. Otherwise, drive the truck, get the experience and if you decide you want to venture into other aspects of trucking which will make you more money than just the mega carriers, go for it. You might find though, that you do well enough where you're at and retire from there but the options are pretty much limitless once you have a few years under your belt.

Dan S.'s Comment
member avatar

Answer the question

"Are you working to Live, or Living to Work?"

IF the answer is the latter? Be prepared for those parts of your life which you cannot put a price tag on to suffer. Your relationships.

In the process of providing for your family? Don't lose your family.

In a book titled "Crazy Time" about divorce, a man came home with wine and roses. After years and years he came home to his large executive home in an exclusive home in a gated community. Children grown and gone from Home.

But he had finally "made it!" Executive Senior Vice President.

His wife just looked at him, the wine, the roses.

"That's nice i suppose. I just wished we had spent MORE time as a FAMILY when the kids were growing up."

HOS:

Hours Of Service

HOS refers to the logbook hours of service regulations.

OWI:

Operating While Intoxicated

PackRat's Comment
member avatar

Here's one thing you should consider: in the first year as an OTR driver, you can easily gross $40K if you put your mind to it. In that same amount of time, you can easily go into the hole $40K with a lease. Your call.

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.

G-Town's Comment
member avatar

I am bumping this...

Kody you need to listen to this Man...he knows exactly what he is talking about and has the relevant experience to back-up his words.

I'll keep it short and sweet since others covered the costs fairly well.

If you can't afford to buy a truck, don't buy a truck. You say the goal is to eventually have a small fleet but lease purchase won't get you there. You build a fleet by establishing business credit and that won't happen at Prime, Swift, Celadon, Schneider etc. If you're hell bent on buying a truck, figure out what you need, then triple it. Have that money set aside before you ever inquire about a truck and then be ready to spend it before you really watch any revenue roll in. Otherwise, drive the truck, get the experience and if you decide you want to venture into other aspects of trucking which will make you more money than just the mega carriers, go for it. You might find though, that you do well enough where you're at and retire from there but the options are pretty much limitless once you have a few years under your belt.

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