Lease/Purchase

[David_Reed]

Can anyone name even ONE good, or honest, Lease/Purchase program with a company for an O/O?

[Uturn2001]

The closest one that I ever ran across was the program Millis had a few years ago. Agree to drive on of their older trucks for 2 years as a company driver and take the per diem pay option and after that time they gave the truck to you.

You still wound up with a truck with about 800-900,000 miles on it, but at least if something went wrong with it in those 2 years you didn't have to worry about fixing it, and you did not really loose anything.

[David_Reed]

Never heard of that one before.
Interesting, but........... :wow:

[Big_Dave]

Big Al did that L/P deal through Millis. Never heard any complaints about that program from him. Don't know if Millis is still doing that type of program anymore though or not.

[Capt._Chaos]

As opposed as I am to Lease-Purchase programs, Crete has one.

Unfortunately, their gross Owner-Operator pay (at 80-something cents per mile) isn't but twice what our mileage rate is for company drivers. :wow:

[Rev.Vassago]

I hear CR England has a good one. I'm considering dumping the ol Peter-shack, and heading over there...... :wow: :wacko:

[germanbmwfreak]

I hear CR England has a good one. I'm considering dumping the ol Peter-shack, and heading over there...... :wow: :wacko:

:yikes: :yikes: :yikes: :yikes: :yikes: :yikes: :yikes: :yikes: :yikes: :yikes: :yikes: :yikes: :yikes: :yikes: :yikes: :yikes: :yikes: :yikes:

can we say BAD BAD BAD idea?

[magicman]

As opposed as I am to Lease-Purchase programs, Crete has one.

Unfortunately, their gross Owner-Operator pay (at 80-something cents per mile) isn't but twice what our mileage rate is for company drivers. :wow:

Since the truck I drive came from Crete, I would say I can address the L/P program there.

I got my 2000 Century, brand new, in May of 99. It was priced reasonably ($ 82,950) and had a 3yr/300,000 mi warranty. Although the Acklie companies don't pay as well as one would like, the program is fairly run and gets you into an economical truck for a good price.

Would I do it again??????? Most likely, YES. I would price the costs of operating a truck, now and see if I could make it fly.

Crete also offers their used trucks for sale. Same program, just less down, less payments and a smaller term.

[Uturn2001]

Big Al did that L/P deal through Millis. Never heard any complaints about that program from him. Don't know if Millis is still doing that type of program anymore though or not.

Currently Millis is not running that program.

[maxmiddle]

I haven't done any research, but have heard that Marten offers a L/P. They seem to be one of the better companies and therefore their L/P might warrant a look.

Over all, a lease/purchase program only benefits the company. They should be avoided.

[Uturn2001]

I do not know how true this is, but a couple of years ago I heard a driver talking about doing a L/P through Covenant. He said that he could take the truck and go work for another company if he wanted to so long as he did not miss any payments. Miss one payment and Covenant would come looking for their truck.

[germanbmwfreak]

well i am going to put my comments on l/p since i have done that before. i leased thru cr england after i had been driving their company trucks. lets just say me and cr england are not talking anymore. i stronglly disaggree with l/p since it does benefit the company. i would buy for sure before i lease. granted there are probally good companies out there but the problem is they are in control even though you are making the payments. when you aint making money you cant go to another company. (as far as coveant i am unsure of) majority of companies you cant go somewhere else unless you pay them to do it. i did however been looking at freightliner lease purchase program it looks allright but i havent talked to anyone who has done it before.

[Big_Dave]

One thing I will say about doing some sort of L/P agreement.............

Go through a bank or a leasing company. DO NOT do a L/P through a trucking company!!!!

NEVER L/P from the people that control your freight / income!

If you manage to piss'em off, they'll starve you out and you'll lose the truck........then they'll take you to court to recover any funds (bogus and real) that you may owe them.

[germanbmwfreak]

big dave is right. i am going through that right now with crengland. turned a truck in that was in good mechanical shape and they charged me $7000 for repairs. i would give them $2000 for minor repairs and tires. so i have been there done that and had the bad happen to me. i hope this helps you make the right decison. like big dave said, dont lease thru a company that controls your freight, go throught a dealer or a bank.

[Truckdobe]

David... I've seen people on lcapp.com advertising for people to drive & buy their trucks as well as people looking for the same deal that you are. I don't know if you can post, but I'm sure you know enough Landstar folks to get someone to post for you.

Hope you find something that suits you soon.

[David_Reed]

Ok, I fixed my website. I forgot I had taken it down.

Here http://home.earthlink.net/~davidbreed/index.html is a link to my site and, I think, some interesting numbers.

Please respond.

[Randg1]

David, just checked out your site ;) . Good info. friend, I just loaded it to my favorites.....Thx..

[Rev.Vassago]

David, I would be very interested in knowing how you came up with your FSC rates. They seem awfully low. For example, at the current price of fuel ($2.50), you have a rate of $0.27 per mile. The current run I am on is 500 miles loaded, and 150 miles deadhead. At your rate, I should be receiving $135 in FSC. However, I am actually receiving $1050 FSC.


Furthermore, your operating costs are based upon driving 125,000 miles per year. I wonder, what happens if you don't meet your 125,000 goal for the year? What if you only drive 100,000 miles? Then all your figures are wrong, and you will come up short. Instead of figuring all your costs by the mile, why aren't you figuring your fixed costs as a cost per day vs. your variable costs as a cost per mile? Your fixed costs do not change based upon the amount of miles you run, and your variable costs do not occur unless you are moving. Why treat them both the same?

Furthermore, you have some items in your variable costs that should be in your fixed costs, and vice versa.

1. Under fixed costs, you have Escrow @ 0.08 CPM. Does this charge only occur if you are moving, or does it get deducted even if you are not moving?

2. Under Variable Costs, you list Office Equip. You only have expenses for office equipment when the truck is actually going down the road?

3. Under Variable Costs, you list Telephone. This again, is a charge that you incur every month, so it should be a fixed cost

4. Under Variable Costs, you list Legal Fees. What is this legal fee - a membership in a legal defense fund? Again, a fixed cost.

5. You are basing your fuel costs upon a 90% loaded miles projection. You have not factored in OOR (out of route) miles, and I think that 90% loaded is very optimistic.

This cost of operation is obviously based upon running for Crete. How much does Crete pay per mile, without FSC? According to Crete's website, the pay scale for loads between 701-1200 miles is $0.93 per mile. Furthermore, this will only account for 78% of your loads. Another 19% of your loads will be at $0.83 - $0.84 CPM. Yet your operating costs sheet shows your cost per mile to be $1.15 per mile. How do you plan to make up the other $0.22-$0.32 per mile of operating cost? And yes, the FSC isn't factored into that, because you already took out the FSC when you factored your fuel costs.

[David_Reed]

David, I would be very interested in knowing how you came up with your FSC rates. They seem awfully low. For example, at the current price of fuel ($2.50), you have a rate of $0.27 per mile. The current run I am on is 500 miles loaded, and 150 miles deadhead. At your rate, I should be receiving $135 in FSC. However, I am actually receiving $1050 FSC.


I got the rate from the list on OOIDA at this link
http://www.ooida.com/Swimming_sharks/MAR%20fuel%20surcharge%20kit.htm
Not all rates are the same, depends on who is setting them. Those in this link are on par with what carriers are paying leased O/O's


Furthermore, your operating costs are based upon driving 125,000 miles per year. I wonder, what happens if you don't meet your 125,000 goal for the year? What if you only drive 100,000 miles? Then all your figures are wrong, and you will come up short.


Yep, you'd be right about that coming up short stuff.
I don't even want to run that many a year, wears out a warranty before the years run out. Kinda dumb in my book. I'd rather run under 100000 per year.

Here's how I came to that number. First, not everyone could run this long with so little time off, but I figure i need 5 weeks total off per year. That leaves 47 weeks to work. Next, I looked at the minimum that you can run at Crete and qualify for their performance bonus and the License incentive bonus. You need just over 120000 per year to get it the performance and over 90000 to get the License incentive, but only earn $.06 cpm on the License bonus for the miles OVER 90000.


Instead of figuring all your costs by the mile, why aren't you figuring your fixed costs as a cost per day vs. your variable costs as a cost per mile? Your fixed costs do not change based upon the amount of miles you run, and your variable costs do not occur unless you are moving. Why treat them both the same?


This is a very good question and I'm glad you asked becasue until now I had not looked at it that way. I will review the sheets, make that and other changes you've mentioned and re-do the webpages.


Furthermore, you have some items in your variable costs that should be in your fixed costs, and vice versa.

1. Under fixed costs, you have Escrow @ 0.08 CPM. Does this charge only occur if you are moving, or does it get deducted even if you are not moving?


Another good point. Same answer as above.


2. Under Variable Costs, you list Office Equip. You only have expenses for office equipment when the truck is actually going down the road?


Another good point. Same answer as above.


3. Under Variable Costs, you list Telephone. This again, is a charge that you incur every month, so it should be a fixed cost


Another good point. Same answer as above.


4. Under Variable Costs, you list Legal Fees. What is this legal fee - a membership in a legal defense fund? Again, a fixed cost.


Another good point. Actually incorporation costs. Probably a one time deal.


5. You are basing your fuel costs upon a 90% loaded miles projection. You have not factored in OOR (out of route) miles, and I think that 90% loaded is very optimistic.



Actually, you may have missed the last page of the site. Crete says their miles are practical, even so, I figured about 10% unpaid. Then that left 112500 paid miles.



This cost of operation is obviously based upon running for Crete. How much does Crete pay per mile, without FSC? According to Crete's website, the pay scale for loads between 701-1200 miles is $0.93 per mile. Furthermore, this will only account for 78% of your loads. Another 19% of your loads will be at $0.83 - $0.84 CPM. Yet your operating costs sheet shows your cost per mile to be $1.15 per mile. How do you plan to make up the other $0.22-$0.32 per mile of operating cost? And yes, the FSC isn't factored into that, because you already took out the FSC when you factored your fuel costs.


First, I used those same numbers you mention in that last page and used those percentages and $.cpm against the 112500 paid miles.

On that page I show the projected total gross income and it comes up short by $19,000.00 dollars of the projected annual operating cost.

On the FSC, I only calculated it being paid on the loaded miles, but I may have included the deadhead miles, which they pay at $.67 cpm, however I suspect they don't pay FSC on them. My bad. Nonetheless, I was close, I only calculated the FSC being paid on what I calculated to be paid miles. Not all miles.

You sir, are an astute obserrver and you have no idea how much I appreciate the feedback and suggestions.
How refreshing!!

[Rev.Vassago]

Just so you know, there is software on the market that will calculate all of this for you, and then show you how much profit you will make per trip.

LOAD PROFIT ANALYSIS SOFTWARE (http://www.truckersbookstore.com)

And yes, I am replying over here and over at TN, because this information is useful to know.

[David_Reed]

Just so you know, there is software on the market that will calculate all of this for you, and then show you how much profit you will make per trip.

LOAD PROFIT ANALYSIS SOFTWARE (http://www.truckersbookstore.com)

And yes, I am replying over here and over at TN, because this information is useful to know.

On order, enroute now.

I, too, have built a spreadsheet for a load by load analysis. It will be interesting to learn what I didn't think to put in it, or what I did wrong with what I did put in.

ps Me, too ;)