Where Owner Operators Thrive!
Blog for the modern day trucker
There are many different factors you need to take into account when you want to become an independent truck operator. One of the most important things you need to decide is whether you want to buy or lease a semi truck. Irrespective of your financial capabilities, leasing a semi truck is one of the best decisions you can take at the beginning of your owner-operator career.
Semi truck leasing is merely getting a truck temporarily from a company for a stipulated period. Although the truck does not belong to you after the lease term has ended, you have the option of buying the truck outright based on a predetermined price. Since semi truck leasing companies are concerned about getting the trucks back after the leasing period in the right conditions, certain restrictions are often applicable to the terms of semi truck leases. In some cases, there may be mileage restrictions. Also, the semi truck leasing companies may take care of the maintenance costs of the leased trucks.
Despite the perceived benefits of leasing trucks as an independent truck owner-operator, it is vital for you to get it right when leasing a semi truck from any company. Some semi truck leasing companies have incredibly stringent limitations on mileage, carriers to work with and other factors that may affect your profit as an independent truck operator. Therefore, you should be careful when dealing with any companies and make sure to find one that is the right fit for you.
If you are contemplating leasing a semi truck, here are some of the benefits you should consider:
Without a doubt, you may encounter difficulties getting semi truck leases with bad credit scores as this indicates to lenders that you are a much riskier investment based on previous financial precedents than those with good scores. Do not get worked up over this as there still are many companies that are ready to take risks on people with bad credit; it may just end up costing you more.
It should also be noted that the more your down payments or deposits, the cheaper the rates you will be able to get from any companies irrespective of your credit score. This is because the lending company is taking a smaller risk with significant down payments or deposits.
Apart from bad credit, other things that may militate against you when leasing semi trucks include:
As previously stated, different carriers have their opportunities and restrictions when it comes to semi truck leases. Depending on the company’s business practices and what kinds of things your contract includes, you could end up in financial trouble from leasing a truck. Nevertheless, there are certainly ways to lease a truck without ending up in a financial pit; here are a few things you need to do before you try to lease to get the most out of this investment:
Consult other independent truck owners Before embarking on the journey of looking for the best carriers that can lease you a truck, it is highly recommended that you speak to other drivers who have leased trucks or are currently leasing trucks. While some truck drivers are sentimental in their views, you are likely going to learn some things about which semi truck leasing companies are reliable when you speak to a couple of semi truck drivers. From their reviews, you can quickly make a list of the companies that can offer you excellent services.
Research about the companies on your own Do not take the words of truck drivers as your sole means of selecting a company, make sure to take some time to do some research on our own about each leasing company. Not only are leases usually tailored to individuals based on their needs and how well you can negotiate with the company, but some companies may have changed their policies recently, and you could end up with a better deal than others. You will be able to find lots of useful information online about each company, so there is no excuse for failing to research any company.
Understand the contract Since each company can offer different agreements depending on the individual seeking the lease, you must be mindful of the possibility of some dubious companies trying to sneak in certain terms to take advantage of you or put you in a situation where you won’t be able to make the necessary payments. You should carefully read each sentence in the contract and understand what it is all about. If you have any difficulties understanding any clauses in the contract, ask for an explanation (the leasing companies are required by law to help you if you don’t understand something in the contract). Alternatively, if you know someone who has better knowledge of contracts, you should try and bring them along with you. Some things to pay particular attention to are the terms of down payment or deposit, maintenance costs, cargo insurance, and towing costs. Never sign something that you don’t completely understand all the conditions too.
Consider the insurance and tax When leasing semi trucks, you should never overlook the tax and insurance involved. While working for a trucking company, you may have been provided with life, dental, health, and vision insurance; now that you are out on your own and leasing your truck, you will have to consider the cost of paying for insurance on your own. You will also be responsible for any taxes for money that you make throughout the course of the year, depending on how you get your checks you may have to put aside money for taxes at the end of the year. Make sure to consider the tax and insurance options available to you, whether this is through a company or on your own, before signing any semi truck leasing agreement.
Calculate the profitability of leasing a truck The main reason for you to get a semi truck lease is to make a profit and improve your finances; therefore, you must consider whether you will make money from the lease or not. You should run the numbers and see how much you can make each month from driving the truck and what your expenses are going to be. Some of the costs you need to consider include income, truck fuel, mileage fees, cargo insurance, licensing, permits, fuel surcharges, tires, tolls, legal fees, maintenance, truck washes, parking, unloading and other fixed and variable expenses.
With all essential things considered, you can sign the agreement and start making money with the semi truck.
In your preparation for a semi truck lease, it is imperative for you to understand some of the problems you may encounter. Over the years, there have been many different complaints by independent drivers about leasing companies; therefore, knowing these complaints may help you mitigate the problems associated with them. Some of the problems are:
However, if you have any problems with leasing semi trucks, do not be despair as you can turn to driver advocacy groups such as the Owner-Operator Independent Drivers Association for assistance. With the evidence of being mistreated or cheated by the semi truck leasing company, the driver advocacy group can help you file a lawsuit so that you can get the best solution. If you can prove your case, you may be awarded substantial settlements that may even be enough to compensate your loss. However, despite the possibility of getting settlements, you must never leave yourself open to being treated unfairly or illegally by any carrier. Know your rights, that way you won’t be taken advantage of, although there are companies out there that practice honestly, you should still be mindful that there could be people trying to deceive you and take advantage of you.
In a nutshell, you must understand that becoming an independent truck operator is not an easy task as it demands your ability to work diligently and wisely to get the most out of your business endeavors. It is just like having any other business; you have to make use of the resources available to you. Therefore, consider your readiness as well as ability to keep the terms of the leasing contract before committing yourself to it. If you can follow the information provided above on semi truck leasing appropriately, it should be possible for you to navigate the process of leasing a semi truck without much hassle.