Life on the Road – Trucking News Blog

Lease purchase programs are not for everyone. But it is a way to get a start to owning your own business. You really have to know what to look for, however, when it comes to signing on with one of these programs. First and foremost, is there a down payment required? While some companies require no down payment, others do. How good is your credit? Most companies advertise that they do not care how bad of credit you have (of course not because the interest would probably choke a horse!). How much is your payment going to be? Payments vary by year and type of truck (of course). You may also want to check with the company to see when your first payment will come out.

Some companies will prorate the payment based on when you start and some companies will give you a month before they begin taking the payments out. If you sign on with a company that gives you that month of no payments, take advantage and put back money for rough weeks you may face! Of course you will want to know if what you are buying is worth what you will be paying so a little research beforehand goes a long way. After all, who wants to end up with a five year old truck with a million miles on it while making a $500 a week payment that has a $40,000 buyout option at the end of the lease? Lastly, there are some companies who require you to drive them for a certain period of time before you can lease a truck from them. I can see this as being an excellent idea because it will get you accustomed to the company and the way they run things.

Next you need to look at all the little incidentals you will be charged for. Does the truck have an APU unit? If so, what is the charge for it per week? Will you be able to purchase insurance for your truck through the company you will be leasing from or will you have the option to look elsewhere (if you can get a better price)? Will you be required to have an escrow account? Some companies require an escrow account in order to cover the costs of a terminated lease or to help you in times of emergencies. Most of these escrow accounts have a set dollar limit per week and have a cap on them as well. Does the company have a maintenance program? If so, how much do they take out? Most companies take out so many cents per mile. This is usually put into a maintenance escrow account and usually has a cap. But you will have to find out if the company requires you to have work performed at their maintenance facilities or if you can have the work performed wherever you want it performed.

Does the truck have an OBC? If so, what will the charge be per week? Most companies “rent” the equipment to you. Is there a “pet” fee? If you have a pet that you would like to take with you and the company allows having a pet in the truck, how much are you willing to pay? I have heard of at least one company that charges a $2500 (yes, you did read that right!) deposit for having a pet in the truck. Does the company have a rider program? If the company does allow a rider, they may charge so much per month to “allow” the person to ride with you. Does the company pay for base plates and permits? Most companies do, but there are a few that require you to be with them for a year before they cover the costs. Does the company cover tolls? Most do. Few do not. Most generally you will get reimbursed for tolls. Some companies do have Pre-Pass or EZ Pass but you have to pay a small fee for the luxury of the use.

Taxes – now there is a big question. Will the company you lease from pay your quarterly fuel taxes? Most do because they keep track of your mileage via the program they route you on. Most companies say it is a “suggested” route. Along with paying quarterly taxes, usually heavy vehicle use tax, and personal property tax come out as well. As far as personal taxes (federal, local, etc.), that is your responsibility because you will receive a W-9 at the end of the tax year – remember it is YOUR truck so you are the one responsible for paying taxes. Most companies offer a tax service which usually runs about $20 a week to help you keep things in order. I would highly suggest either using them or a local tax person to keep things in order.

See Part II Tomorrow.