It may seem like switching to owner-operator status is the easiest way to for drivers to make money, but pitfalls exist. Johnny H. wanted to own a truck. After two failed deals with other drivers, in 2002 he started a lease-purchase program to purchase a 2001 Freightliner Classic. He received the truck’s title in July 2007.
In the past several years, the lease-purchase option for truck ownership through carriers has surged. Lease-purchase programs often appeal to drivers who don’t have cash for a down payment or a good enough credit history to qualify for buying a truck through a dealer. Leases range from one to five years, usually with zero or minimal down payments. Payments and other program expenses come off the top of weekly settlements. Operators usually are responsible for their own maintenance and other expenses, though some programs may cover tolls, permits and plates. During the lease term, escrow money accrues in a maintenance account and is released after the lease expires.
At the end of the lease, the operator may be given the option of buying the truck. In some cases, the operator may seek outside financing to buy the truck he’s been leasing. Johnny admits that he struggled some months while leasing his truck. “Some weeks I didn’t get a check,” he says. “You really have to watch every penny and your fuel.”
During his lease, he paid more than $30,000 for repairs, including an in-frame and a re-manufactured transmission, which the carrier helped him finance.
Once you’ve decided you want to pursue a lease-purchase option
- Choose a carrier that fits your needs
- Research it at the beginning-You choose the carrier-The carrier doesn’t choose you
- Make sure it fits your business and the type of freight you want to haul and where you want to run
- Look at the credibility of the company
- Talk to other drivers who have completed the company’s lease program
- Examine the lease carefully. Spend a couple hundred dollars on a lawyer to read it over.
- If you have a choice of truck, ask to see the maintenance records