Newbies - Company Driver to Owner Operator

No Money Down? | No Risk? | Dealer Leasing

There is significant income potential with a lease program, if everything goes right. Keep in mind, if you are leasing a truck you are typically responsible for all, I repeat, all expenses. That includes maintenance, insurance, lumpers, tolls, scales, etc. After all expenses are paid, then you get to pay yourself. But wait; first you have to pay Uncle Sam. After the federal, state and local government is paid their taxes then you get the money, right? Yes, if you don't want insurance, retirement, etc. You are responsible for all expenses.

No Money Down?
Leasing a truck is like leasing a car. You need money up front (even if the advertisement says no money up front needed). If you don't have the money for a down payment and/or security deposit, then the company will take that payment out of your first few settlements. Most companies usually take money out of your settlement for maintenance reserves too. You can fully expect to take home little or no money the first 8 to 10 weeks. Are you ready for that?

What about home time? As a company driver if you take home time you aren't paid. The same is true when you lease a truck, with one exception. When you take home time you still owe the truck payment, the insurance payment, etc. Quite honestly, if you take home time at all during the first 8 to 12 weeks, you will be in the hole financially.

The general point is that if you want to lease a truck, and have decided to do so, you need to be prepared financially. It shouldn't matter if the company says you don't need any money down. It shouldn't matter if you think you want to stay out on the road for two to three months before getting home. You still need money up front. You should have enough money to get you by for at least a month, and that includes your truck expenses and your personal expenses. If you don't have that money set aside at the outset, you are setting yourself up for financial disaster.

No Risk?
Before you lease, you should consider a couple of other things as well. First, try not to be lured into leasing because a company advertises for no credit check, no risk, no money down and high income potential. These may all be true, but it makes no difference if you aren't ready. Have you ever asked yourself why companies lease a truck without running a credit check? It's because there is no more risk to that company than if you were a company driver. The truck is still theirs if you don't pay the lease, and they can just re-lease it or even put a company driver in the truck if you quit. What about the no risk claim? True, there is little risk to the company, but the driver has a great deal of risk. Remember, you are responsible for all expenses the truck incurs and, if you quit, the company will likely report you to a credit bureau and try to collect the remainder of the lease payments. That is a lot of risk. Make sure you are ready to lease first and that you truly want to. Don't be pressured into it.

Dealer Leasing
If you are ready to lease, why not go to a dealer first? Dealers have a lot more risk involved with the leasing of a truck and if you can't qualify with a dealer, you probably aren't ready. By leasing from a dealer you aren't constrained to one company if you are dissatisfied. You can always arrange for other employment. You should have another job lined up before leaving and communicate this change with the dealer.

Another thing to consider is the question of why you should lease a truck instead of buying one of your own. Chances are if you can qualify to lease you can qualify to buy a truck. The purchasing of a truck affords you a little more freedom and more tax advantages. Also, at the end of the payments the truck is yours, although you should consider trading the truck in before it is paid off.

If you are like most drivers you have dreamed of becoming an independent operator through either purchasing or leasing a truck of your own. Is leasing a truck a good idea for you? It all depends on whether you are ready or not. Leasing is serious business because it is a business and must be treated as such. Leasing means you will have to take care of your personal finances and business finances; it means you will have additional tax opportunities and liabilities; it means that you will need to schedule your time and loads to maximize your profit. Leasing a truck is a business venture not to be taken lightly.