For a driver looking to bridge the gap between being an employee and an owner operator, it’s worth a look into a lease purchase program with a trucking company. These types of programs can fast track the route from driver to owner. Here are 3 things to consider when thinking about working through a lease purchase trucking program.
What is a Lease Purchase Truck Driver Program?
But first, let’s take a look at how these programs work. A professional truck driver can make the move to be an owner operator by buying their own truck from a company via a series of lease payments. These drivers then drive for the company providing the lease, and make the lease payments for the truck back to the company. In addition the driver usually assumes all responsibility for maintenance and up-keep of the truck as needed. At the end of the lease, the driver completes the terms and will then own the truck.
1. Terms
When looking into a lease purchase trucking program, be sure the deal points are clear. For starters, there’s a monthly payment for the lease of the truck, but is it a fixed amount? Will it change over time? How many payments are there? And is the residual value of the truck at the end of the lease plan clearly detailed in the agreement if the final payment is different than the rest? Be sure you understand the monthly fixed costs and then how the final payments will work. And when exactly you will own the truck.
Be sure you understand all of the costs and details spelled out in the terms of the agreement when exploring this path to ownership.
2. Hidden Costs
These costs can be the deal breaker for some truckers looking to buy their own tractors. If you’re involved in a lease purchase program, are you responsible for ALL maintenance and repairs? Do you need to purchase an extended warranty? Are you eligible for any kind of discounts that your company may be eligible for? Go through the agreement with a fine-toothed comb before you sign anything.
If you’re pursuing this type of program, the hidden costs are usually the cause of the lease purchase plan to fail. As a new owner, being able to cover even one major repair could cause a significant financial impact.
3. The Carrier
Most companies that offer a lease purchase program, tie you to the company for the duration of the lease. In this case, you need to be sure that you’ve done your research and are comfortable with company culture, co-workers and the overall health of the company for the long-term. No matter what, if you enter into this type of program, you’re obligated to the payment and the terms. You want to be sure that the carrier will have work for you to do, and that you’ll be able to cover the payments. No matter what.
Lease purchase plans essentially make you an owner-operator of a small business. But you’re still an employee of your carrier. Drivers need to understand how this “business within a business” model actually works.
If you’re considering taking this route to owning your own truck, be sure you understand all the pros and cons of these programs. There’s obviously a tremendous upside to this. And the allure of “being your own boss” can be enormously powerful. But with this comes a lot of responsibility and assuming a lot of the risk of ownership. No matter what path you choose, we’re here to help you find a great-fit job at Drive My Way.
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