The Road to Lease Purchase Ownership: 3 Keys to Success
In an environment where the unemployment rate is at an all-time low 3.6%, those in the job hunt are looking to the transportation industry, where despite this rate, there is a growing need for professional drivers and jobs are readily available. The door is open for those who want to start or expand upon their driving career.
For someone in this industry, earning potential is unlimited, and Owner Operators are averaging six figures annually. The question recruiting departments often hear is, “How can I move from a Company Driver to an Owner Operator without breaking the bank by purchasing my own truck?” A quality lease purchase program can put drivers on the road to six figure success.
1. Initial research is needed: Lease programs and lease purchase programs are very different. A lease program through a third-party provider will require drivers to put money down, and depending on the Agreement, drivers may have to meet strict credit requirements. This isn’t always the most practical option for a driver starting their path to truck ownership.
A lease purchase program allows drivers to pay a monthly fee and part of that payment is put toward the final purchase price. Per the lease terms, there may be a final balloon payment, or, at the end of the Agreement, the equipment is paid off. When choosing the lease-to-own option, make sure you take the time to research the company. Ask about lease purchase success rates. According to a survey conducted by Truth About Trucking, 77 percent of drivers fail to complete their lease-to-own program. At PGT, we pride ourselves on a purchase success rate above the industry average. Many of our drivers have gone on to purchase multiple trucks through our program, becoming Fleet Owners, and truly maximizing their earning potential.
“I’ve paid off three trucks with PGT’s Lease Purchase Program. Great revenue and overall great program. There’s obviously a reason I came back for a fourth!” said Cortez Hogan, PGT Lease Purchase Operator.
2. Know the equipment’s history: Many companies purchase their lease equipment at auction with little to no known history of the truck. They may have their maintenance team do a quick once-over to make sure it is initially drivable and place it on the sale list. Reoccurring issues after the fact? It’s the driver’s responsibility. How much is a driver willing to pay into a truck with no maintenance history before chalking it up to a loss?
It is in a driver’s best interest to partner with a company who offers used fleet trucks in their lease purchase program as opposed to auction equipment. These trucks are purchased new, and once offered in the program, an entire history of that truck has been recorded. Drivers can see how the truck has been maintained and cared for, where it has gone, and what it has hauled. Additionally, some companies guarantee the success of the truck. If there is a persistent issue, a reputable company will move the driver into another available lease purchase unit to keep them moving and making money.
"I started at PGT Trucking nine years ago as an Owner Operator. My equipment was old and needed a lot of work. PGT’s Lease Purchase Program allowed me to update my equipment with no money down and keep working. They stand behind you and make sure you’re making good money and always have a quality piece of equipment. I’ve upgraded my truck four times now, and have never had any issues,” Tony Sheehan, PGT Lease Purchase Operator.
3. Ensure the company will help along the way: While the thought of truck ownership and independence are extremely attractive, we often find the reason drivers fail is because they aren’t prepared for the additional administrative tasks related to running a trucking business, such as money management and out of pocket expenses, record keeping and taxes.
Work with a company who can assist in various aspects of being an Owner Operator, including load management, license plates, Federal Highway Use Tax, truck insurances, IFTA, and more. Having these resources and experts make the transition smooth and successful. Once the truck is paid off, you can still rely on this internal support system to help you manage your business. Additionally, partnering with a company like PGT provides lease purchase operators with deep discounts on fuel, tires, parts, and shop labor rates.
Also essential to the success of a Lease Purchase Operator is the relationship the driver has with fleet management. A dedicated Lease Purchase Fleet Manager knows what it takes to be a leading Independent Contractor, and works with their drivers toward strategic career growth.
“Start with the basics. Learn the freight, routes and the customers. Work closely with your manager to ensure your success. If you are looking to get into the lease purchase program, you need to have the right business mindset and act like an Independent Contractor prior to making to the jump. You have to be committed!” said Tremaine Abner, PGT Lease Purchase Operator.
Making the move from Company Driver to an Owner Operator takes planning, research and support. The trucking industry opens a lot of doors for business owners who want to work hard and make a great living. A quality lease purchase program can help a driver meet their professional and financial goals. Be selective in your equipment and in your partnerships, and keep in mind these three keys to success.
About the Author: Darren Coast is PGT Trucking’s Chief Operating Officer, accountable for the company’s assets, drivers, facilities and agents with over 25 years of experience in the transportation industry.