Most truckers have a dream of owning their own rig someday, but the $130,000 to $200,000 cost to purchase makes it seem more fantasy than possible reality to many. There is one way to make that dream come true, and that is with a lease to own or lease to purchase program.
Your first question may be, what is the difference between lease to own and lease to purchase trucking programs? The answer: nothing!
Both phrases mean you are entering an agreement where you make payments on a truck over time. Once you complete the payments you own the truck.
If we have your interested piqued, keep reading for the pros and cons of this option to buying a truck.
Financial Benefits of Lease to Purchase
If you have seeking options on a trucking purchase, you know financial obstacles can quickly deflate your dream. Entering into an agreement by working for a trucking company that offers the lease-to-own benefit to their drivers makes it easier to qualify for a loan than with a traditional lease. If you make $1,500 to $2,000 per month prior to taxes, you are likely to meet the qualifications.
Because the lease agreement is with a carrier, you do not need to establish a line of credit. You can usually secure a lower monthly payment than with a traditional financial institution.
Build Your Reputation
When you are an owner-operator of a truck, your reputation is the most important asset to your business. When you make money truck driving for a company as a hauler while paying for your trucking purchase, you are holding the golden egg. That golden egg is a reputation that will help you secure trucking jobs as an owner-operator in the future.
Permits and Maintenance
When you have your own truck on the road, there are several permits you must obtain. These permits may be provided by the company you obtain the lease from.
Ask about handling maintenance on your rig under a lease-to-own program. Many lease-to-own companies will allow you to participate in their company maintenance program. This may cover all or part of the costs for maintaining your truck.
Maintenance and repairs on a truck cost are 10% of total costs or about $0.10 to $0.15 per mile. This does not include an annual tire replacement of $1,000 to $4,000.
Cons of Lease to Own Programs
One of the downsides of these programs is the need to have enough miles/hours of trucking to provide the income to cover your lease payments. Make sure your contract provides you with a guaranteed number of hours or miles so you can cover your living expenses and truck lease payments.
Read the fine print carefully on your lease-to-own contract and make sure you understand all terms. If possible, have an attorney review the contract for any potential problems.
Some red flags on lease-to-own contracts include an unreasonably high penalty for missing a payment or the inability to guarantee a sufficient number of miles. Be aware of a clause that requires a high balloon payment at the end of the contract or requires you to stay on with the company even after you have the truck paid off.
If the company is pushing you to make a quick decision to sign or discourage you from getting a second opinion, it likely has some questionable clauses in the agreement.
Are You Ready to Lease to Purchase?
Lease-to-purchase programs are an excellent way to earn a truck driving job income while working toward your dream of owning your own truck. If you are looking for a CDL driving job and are interested in a lease-to-purchase option, contact Morris Trucking today. We are looking for independent owner-operators with two years of Class A CDL experience.
For more information call us at 1-812-232-1984 or fill out our online application to join our team.