Post by FUSION on Jan 18, 2015 9:51:29 GMT -5
of a lease-purchase agreement in attaining a truck or becoming an O/O:
CRST has immediate openings available for experienced professional drivers interested in taking their career to the next level.
If you have 6 months recent CDL over the road driving experience, a good work history and safety record you may qualify for the industry's #1 lease purchase program.
- Late model conventional tractors. Freightliner Columbias & Cascadias 2011-2013
- Get Paid! 70% of revenue plus fuel surcharge- current fleet earns up to $1.60 per mile to the contractor.
- Lead Driver opportunities- Double your profits by training CRST's recent driving school graduates.
- $0 down payment, low truck payments and fixed costs. plenty of room for profit.
- Train a partner and run a team operation. CRST has competitively priced CDL schooling available for
- $0 down with low weekly payments.
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Note: Over the past three years, the percentage of carriers intending to add capacity through the use of independent contractors has decreased by 50 percent, from 30 percent to 15 percent. Smaller companies are more likely than larger carriers to still seek out independent contractors (21 percent vs. 13 percent).
“Contractors left the industry as their profits and cash flows were depressed in the recession, and many are not interested in returning, even as more carriers offer lease purchase plans to attract them,” Mikes said.
Just 8 percent of larger carriers intend to add capacity by buying an existing company’s fleet. Adding capacity through buying used trucks has declined from 8 percent in October 2011 to virtually nothing today.
P.S. that 70% of revenue plus fuel surcharge - earns up to $1.60 per mile to the contractor; Are you checking with your company to see if you are earning this?
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Also, look at this: recently, OOIDA’s Business Assistance Department has noticed an alarming increase in people signing on to lease-purchase programs with large motor carriers.
Our experience in reviewing these contracts and receiving numerous complaints over the years tells us these programs almost never benefit anyone except the motor carriers and should be avoided. Admittedly, at first glance a lease-purchase agreement can seem attractive – no credit check, no down payment, and truck payment generated from load pay.
Sounds like a good deal, right?
Well, what may not be clear if you fail to read the fine print is that if you sign one of these, you will have no ownership rights until the truck is paid off. One real big catch is that the truck must remain leased with the company that “owns” it. That is the motor carrier.
What that means is you are tied to that company and unable to drive the truck wherever you want. Also, truck payments are usually deducted weekly instead of your making a monthly payment, and the truck payment is taken out before you receive your paycheck even if it means you receive a negative pay slip.
And that’s just a start.
Typical complaints we receive include:
•Truck needs constant repairs;
•Never receive a paycheck;
•Miles have been cut;
•No paycheck and getting further and further in the hole with the company;
•Can’t generate any money, and the company refuses to let you move the truck;
•Couldn’t make it so I turned the truck in and went back to being a company driver, but the company is still charging me payments on the truck; and
•Company requires a separate maintenance (escrow) account, but I never get to use it when the truck needs repairs. There may be other escrow accounts, too.
Over the years, we have dealt with carriers that leased out trucks on which they did not hold titles. Some carriers that filed bankruptcy or simply closed their doors would often leave the equipment unsecured or not paid for, which meant the lessee lost the truck and all the money already paid toward it.
In one case, we dealt with a company whose company shop charged unbelievable fees for repairs on equipment they took back after a default. Trick is, they never made the repairs.
This same company would continue to charge lease payments to the original lessee on equipment they had already leased to another driver – with that driver making payments as well.
When the original drivers refused to pay and demanded the maintenance and escrow money back, they were provided with bills showing outstanding balances owed to the company. This company went a step further by turning these outstanding debts over to a collection agency. To this day, the drivers who were in this company’s lease-purchase program are fighting the effects of a bad credit score.
Probably the best way to avoid being ripped off in a lease-purchase situation is to not enter into one. But if you still think you can be one of the rare success stories, here are some things to check before you sign the dotted line. Run the numbers. Even if you are lucky enough to complete the lease, in most cases you may pay far more than the equipment is worth.
1.Ask about the title. Does the company have a clear title or is the equipment financed?
2.Is the finance company aware the equipment is being leased?
3.What assurances can they give you that when you make your payments, they will make theirs?
4.How many lessees has the equipment had? (This is a big one. If other drivers were in a lease on this equipment, what happened to them?)
5.Check the mileage. Does it make sense for the year of the truck?
6.Ask for maintenance records.
7.Ask about freight availability. You can also check into the availability by talking to drivers before you have your meeting with the company.
8.Beware of companies that have a company driver fleet as well as a lease-purchase fleet. The company pays the expenses on company trucks so those trucks will be dispatched first and for the best loads.
9.What items are going to be charged back to you besides the truck payment? You need the cost breakdown, not just the list of items, and then run the numbers again. Determine how much revenue you will need to generate each week to keep your head above water. Then balance that out with the number of miles you believe you will realistically be dispatched.
10.Review the contract completely to understand each and every condition specified in it. Watch for additional charges that will be assessed for excessive mileage, or clauses that allow the company to take the equipment back should you default. Also understand the conditions that warrant a default.
11.Many agreements state you are in default if you fall behind on even one payment. This is important because the company controls the amount of revenue you generate.
When considering a lease-purchase program, remember that until the final payment is made, you are paying the bills, expenses, insurance, maintenance, repairs and taxes on equipment owned and controlled by someone else. At any time during your agreement you could lose the equipment and your investment. Are you really ready to sign up for that?
Keep in mind this question: If there was so much money to be made by owning a truck, why would the company be trying so hard to sell you theirs?
Want to avoid getting burned by a lease-purchase agreement? It's simple. Just don't sign on.
This article was prepared by OOIDA’s Business Assistance Department, with OOIDA Executive Vice President Todd Spencer. (A real organization with proven results.)
For more info link to this...
www.thetruckersreport.com/truckingindustryforum/lease-purchase-trucking-forum/109961-who-has-completed-lease-purchase-fully.html
