Overdrive Magazine | Trucking Business News & Owner Operator Info
Issue link: https://read.dmtmag.com/i/107898
into ownership A mong many truckers, leasepurchase programs have a less-than-stellar reputation. Some programs are easy to enter, offering no-money-down nocredit-check guarantees. But they also can make it hard to achieve the ultimate goal: truck ownership. "There are some good companies out there with lease-purchase programs that help the driver, but the fail rate with most lease-purchases is very high," says Allen Smith, founder of Truth About Trucking, a website and Internet broadcast that gives new and prospective drivers an inside look at over-the-road driving. Smith, a former household-goodshauling owner-operator who now works as an intrastate company driver in Florida, tried three leasepurchase programs in the early 1990s and never found a way to make them work. His 2011 Truth About Trucking survey showed 77 percent of drivers never complete their leasepurchase agreements. Some failed because they didn't understand the nature of the owneroperator business and weren't prepared for major repairs and other big costs. Others say they couldn't make the truck payments because their companies reduced their miles near the end of the lease – a common complaint among critics, including Smith: "Most lease-purchases are set up for the driver to fail." Unscrupulous practices such as that have earned these programs the unsavory "fleece-purchase" moniker. Andre Jackson thinks it's unfair to put all lease-purchase programs under the same umbrella. If you pick the right program with the right carrier, Jackson says, lease-purchase deals don't have to be financial pits waiting to swallow their next victim. The 42-yearold trucker from Dayton, Ohio, is eight months away from owning a 2007 Freightliner Century financed through a lease-purchase with Chattanooga, Tenn.-based U.S. Xpress. "You have got to know what you are getting into," Jackson says. "This is my third lease-purchase. I did two one-year leases before this one. It gave me insights into what's going on." He used the first two lease-purchases to trade up, with plans to pay this one off and own the truck outright. Jackson has 24 years of trucking experience, 12 years as an owner-operator, and says the U.S. Xpress support system helps him with business-related or personal issues that could affect his business. In return, he offers his guidance to other U.S. Xpress drivers considering a lease-purchase. Grailing Jones, owner-operator Schneider National driver Bob Owens of Louisiana, shown here with Schneider Finance Client Relationship Manager Stacey Marineau, recently signed a lease-purchase. "After my wife and I did the math, this was the best deal we could find," Owens says. development director with Schneider Finance, a subsidiary of Schneider National, also believes support is a must for drivers making the transition to truck ownership. "Each client's situation is unique, and their goals are different," Jones says. "We sit down with each new client and go over their goals. Each new client is assigned a customer relations manager to give them the resources to meet the goals they have set." Many company drivers considering a lease-purchase mistakenly expect an instant pay bump, says Zach Little, vice president of operations at Bay & Bay Transportation. "You will take home and net less money the first few years as a leasepurchase owner," says Little, a former owner-operator who started as a leasepurchase driver. Little says the rewards come in the third year and later, depending on how hard the driver has worked and how he has run his business. "Sometimes it is not about making more money – it is finding ways to reduce expenses," he says. "Being an owner-operator out of the gate is a tough grind." Jackson stresses discipline. "Once I have my bills paid, I put everything else in a savings account to build," he says. Many drivers "who fail in a lease are those who haven't saved for a major breakdown. These trucks are mechanical, and something is going to happen at some point." These tips can help you succeed in a lease-purchase deal. LEARN THE OWNER-OPERATOR BUSINESS MODEL. If you simply like driving a truck and think being an February 2013 | Overdrive | 19