Trucking Company Lease-Purchase Programs have gotten a bad name in the industry. There are of course many success stories. These successes depend primarily upon the honesty and integrity of the trucking companies plus the business expertise of the truck drivers. In these cases the lease-purchase agreements are often successful and the truckers actually end up owning the trucks.
The majority of trucking company lease-purchase agreements are intentionally designed for drivers to fail. New truck drivers are aggressively targeted to become owner-operators. Oftentimes, drivers enter into lease-purchase agreements with trucking companies having very limited knowledge of what this entails. This is particularly true of new truck drivers, yet they may be constantly pressured to become owner operators. Many of them know very little if anything about the responsibilities of becoming owner operators.
We suggest that new truck drivers stay away from trucking company lease-purchase programs until they gain some experience as truckers. Additionally, they should have some knowledge about how to successfully operate a trucking business. The majority of trucking company lease contracts are structured to benefit the trucking companies as opposed to the drivers. They are often deliberately designed for drivers to fail. Many are in fact outright scams. Far too many drivers end up with no truck, a loss of all funds paid plus ruined credit histories and DAC Reports.
Many new truck drivers don’t know anything about trucking company lease purchase-agreements and what they entail except what the company employees tell them. Upon becoming an owner operator also known as an independent contractor the employers save many expenses which the drivers incur. This includes the cost of truck maintenance and repairs which can be quite expensive. It also includes the costs of fuel, truck insurance and health insurance. Furthermore, if a company offers a matching 401k for employees, they don’t have to do so for owner operators.
Many trucking companies are dishonest. They entice truckers with lease-purchase contracts which offer no down payments and weekly payment plans. Drivers are typically given the impression that they can earn huge sums of income. We recommend that drivers resist a hard sell and avoid signing any lease-purchase contract until having it reviewed by a qualified attorney. Also, drivers should be sure they understand the terms of the contract.
Trucking companies often often push trucks they no longer want on unsuspecting drivers. Did you know that drivers might not even know what truck they will be receiving until after they’ve signed the contract? That’s right! Many companies don’t allow drivers to select their own trucks. They tell them what truck they will get. They may even send them to out of town locations to pick up their trucks. It’s very unlikely that anyone would buy their personal vehicles in such a manner.
Drivers should know in advance what truck they will be purchasing and have it checked out for any mechanical problems. Also request to see maintenance records. It also helps if drivers have some mechanical skills themselves. This would help to cut costs on repairs and maintenance.
Furthermore, trucking companies often set the prices for trucks for more than they are worth. Also, they could have mechanical problems and require substantial repairs before they can even be put on the road. Some trucks need several hundred if not thousands of dollars in repairs. When drivers complain they are often told by staff people “Sorry, It’s your truck now” and the drivers must cover the costs. Companies may advance the funds to pay for the repairs but they will take their money back out of drivers settlements. Beware, that once you sign the contract you are indeed responsible for the cost of maintenance and repairs.
One major way the majority of these drivers get scammed is that once they lease a truck through a carrier, they must stay with that carrier throughout the terms of the lease. This gives the trucking company total control of the drivers freight. Oftentimes, when drivers gets close to completing the terms of the contract companies often starve the truck drivers out by telling them freight is slow. Since the drivers can’t leave and go to a different company they are stuck in a situation where they barely get freight. If they can’t continue to make truck payments the company takes the truck back and starts the process all over again with a different driver.
Of course there are honest companies out here. If you’re considering a lease purchase talk to other drivers to help you determine which companies are honest. This could prevent you from going with a bad carrier and being a victim of this trucking company scam. A better way is to enter into a lease-purchase agreement is to finance through a bank or finance company as opposed to a trucking company. This way you are free to change carriers if necessary. Many truck drivers have successfully completed truck leasing agreements through outside financing.