Actual Annual Lease Op Numbers

Topic 25019 | Page 2

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andhe78's Comment
member avatar

$74,376 After taxes 61cpm

This is really eye opening. I’m making more than that as a measly second year company driver.

CPM:

Cents Per Mile

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

's Comment
member avatar

So bottom line. Paid a total of 61 cpm , no insurance benefits. But as an independent business, non company, driver, which includes some tax benefits if so structured. In fact, if done properly, there would be very little tax liability (mostly social security) after full 401k or sep contributions and full per diem. Question, what risks did this driver take on as a lease holder? Was there a risk of high maintenance costs, downtime? What we're the maintenance costs?

Regardless of risk factors, the lack of benefits alone, would make me not want to be a lease holder but a company driver. At minimum, I would need to net a buck a mile for the risks/extra non driving work and lack of insurance benefits. 61 cpm is not worth it.

CPM:

Cents Per Mile

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

Per Diem:

Getting paid per diem means getting a portion of your salary paid to you without taxes taken out. It's technically classified as a meal and expense reimbursement.

Truck drivers and others who travel for a living get large tax deductions for meal expenses. The Government set up per diem pay as a way to reimburse some of the taxes you pay with each paycheck instead of making you wait until tax filing season.

Getting per diem pay means a driver will get a larger paycheck each week but a smaller tax return at tax time.

We have a ton of information on our wiki page on per diem pay

Rob D.'s Comment
member avatar

Rainy,

Those are about the same numbers I came up with, but I ran numbers buying a truck rather than lease, so my truck payment was less.

I saw the other thread going related to this, including comments from PJ who is an owner operator and with whom I had discussed this over dinner.

My two cents on this as someone trying to understand trucking (

Our latest Know-It-All wrote this...

, G-town I saved you the effort), is that you really need to know what you're doing (in any industry) before you decide to bear the business risk involved in leasing or owner-operator.

My other two cents (I know I'm up to 4 cents now) relates to Casinos. There are professional gambles. But if you simply look at how much a gaming company has spent on their casino, its doesn't take a rocket scientist to know they make A LOT of money on people who think they are going to beat the house. If trucking companies promote lease or owner-operator, they are making more money from them than company drivers, because they are shifting more risk to the driver. The driver that makes more as an owner operator, manages this risk well. The driver that doesn't (a new driver), manage the risk well, makes less money.

If I ever to decide to take the leap and become a driver, I would NEVER consider lease or owner-operator until I had felt I had enough knowledge and experience to disagree with experienced professionals like Brett, G-Town, Old School, Rainy, and Turtle.

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.
Rainy 's Comment
member avatar

Here's another. His best week was awesome and he can't duplicate it no matter how he tries. He's been driving 4 years, been leasing 4 years and runs TNT Team Training.

**** All of these numbers are BEFORE taxes & without any benefits *****

Miles: 5221

Gross Revenue: $10,152 ($1.94 per mile)

Operation Costs: $4,157 (80cpm)

Net Rev $5,995 ($1.15 Per mile)

That sounds impressive. However, as I said, that is the best he ever did, and over 8 weeks it was a different story. That one week bumped up his 2 month figures.

Total Miles: 32, 908 (average 4113 miles per week)

Gross Revenue: $53,649 ($1.63 per mile)

Operation Costs: $30,416 (92cpm)

Net Revenue: $23,233 over 8 weeks

Weekly Average BEFORE taxes: $2,904 Average Miles per week: 4113 ****As time goes on, that bottom line weekly average will go down and down.****

CPM:

Cents Per Mile

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

TNT:

Trainer-N-Trainee

Prime Inc has their own CDL training program and it's divided into two phases - PSD and TNT.

The PSD (Prime Student Driver) phase is where you'll get your permit and then go on the road for 10,000 miles with a trainer. When you come back you'll get your CDL license and enter the TNT phase.

The TNT phase is the second phase of training where you'll go on the road with an experienced driver for 30,000 miles of team driving. You'll receive 14¢ per mile ($700 per week guaranteed) during this phase. Once you're finished with TNT training you will be assigned a truck to run solo.

Rainy 's Comment
member avatar

These are fixed costs I could figure out from the settlements per week:

Truck $995.00

APU $70.00

Fed Hwy Tax $11.00

EZ Pass $7.00

Lic Permits $39.00

QC NavGo $11.00

Statement $15.00

Owner Occ $29.00

Payroll Fee $10.00

Total Fixed Weekly expenses: $1,187.00

In addition to variable costs, such as fuel, reefer fuepl, and especially the mileage charges

The lease ops can pay up to 10cpm in maintenance charges and "excess mileage" charges.

So run 5000 miles in a week and you are paying $500 just in mileage charges in addition to the $1187. Again, there are could be additional charges in these pages that are 7 to 20 pages long. There are "bond fees", the salaries of co-drivers, employer taxes and insurance premiums for co-drivers, and more.

Rather than nick pick all of that other stuff, I figured I would lay it all out this way.

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.

APU:

Auxiliary Power Unit

On tractor trailers, and APU is a small diesel engine that powers a heat and air conditioning unit while charging the truck's main batteries at the same time. This allows the driver to remain comfortable in the cab and have access to electric power without running the main truck engine.

Having an APU helps save money in fuel costs and saves wear and tear on the main engine, though they tend to be expensive to install and maintain. Therefore only a very small percentage of the trucks on the road today come equipped with an APU.

PackRat's Comment
member avatar

“But I can pick my own loads. I’m the boss!”rofl-2.gifrofl-2.gifrofl-2.gif

Rainy 's Comment
member avatar

Lease op right out of training

Went solo Feb 2018. This is his end of year totals for 2018

Gross Revenue: $113,000

Operation Costs: $80,000

Net Revenue BEFORE taxes: $33,000

Miles driven 60,000

Gross Revenue $1.88 per mile

Operation Costs: $1.33 per mile

NET Revenue: 55cpm BEFORE TAXES

He didn't do his taxes yet, so I didnt have a figure.

CPM:

Cents Per Mile

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

Sid V.'s Comment
member avatar

He's probably going to pay hardly anything in federal taxes, maybe a little to state if he's in a taxable state. He'll probably get his gross down close to 0 with all the deductions and the per diem.

Per Diem:

Getting paid per diem means getting a portion of your salary paid to you without taxes taken out. It's technically classified as a meal and expense reimbursement.

Truck drivers and others who travel for a living get large tax deductions for meal expenses. The Government set up per diem pay as a way to reimburse some of the taxes you pay with each paycheck instead of making you wait until tax filing season.

Getting per diem pay means a driver will get a larger paycheck each week but a smaller tax return at tax time.

We have a ton of information on our wiki page on per diem pay

Bruce K.'s Comment
member avatar

It costs .75 per mile to 1.00 per mile just to operate a CAR or SMALL TRUCK. That is when all costs are taken into consideration like depreciation, insurance, maintenance, etc.

Wouldn't it be a lot higher for a big boy truck?

Robsteeler's Comment
member avatar

Wow! I was just wondering about doing O/O and I think I'll just stay company. 😮

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