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​Buying Vs. Carrier Based Lease Purchasing

By Matt Fuetter, Finance Manager, Trux, Inc.

August, 2019

Lease purchasing a truck from a carrier is a popular way for many drivers to purchase their first truck. But before signing on the dotted line, there are a few things to consider.

The first consideration is if the payments are affordable. Many carrier lease purchases can run as high as $650 to $1,000 per week. However, most do not require a down payment. The company can manipulate your money in the form of holdback for expenses. Most require an escrow account to be established for this purchase and may withhold money for maintenance, insurance and plates. After all the expenses are held back, a lease purchase driver often makes less than a company driver. A carrier lease purchase does not report on your credit history, in other words, it does not help or hurt your credit. One of the biggest things to consider is the fact that you cannot take “your truck” and lease it to another carrier until the lease is completed. During the course of the lease, you are literally paying the truck off for the carrier and have to haul their freight. If you do not complete the lease, they still own the truck and all of the equity you have built in it as well. Most of the times you must also purchase your insurance through the carrier and funds must be in your account to cover the lease purchase payment. Many carriers may also require you to have your maintenance done in their shop, where you may or may not be treated fairly. 

That is why it is important to do the math to see what you will actually pay for the truck by the end of the carrier-based lease purchase agreement. While there are many reputable carriers that offer fair carrier-based lease purchase programs, there are just as many that offer carrier-based lease purchase programs designed to turn the driver into an indentured servant who pays the truck off for them while hauling their freight. If you fail, they simply lease the truck to another driver. During a carrier-based lease purchase, you are not really a true owner-operator, and not a company driver, but something in-between. If your truck goes back to the carrier, they will more often than not keep the money in your escrow account. At the end of the day, you will most likely pay more for the truck with a carrier-based lease purchase than you would if you were to purchase one outright.

If you choose to purchase a truck, you will need to have a down payment, which can range from $1,000 to $10,000 for first time buyers, depending on the selling price of the truck. You will, however, build your credit and have the option of leasing to any carrier of your choice. If the carrier doesn’t treat you right, you can leave and lease to another one. When you pay the truck off, you now have an asset that belongs to you and can be used to trade against another truck or sold for cash. The downside is if you cannot keep the payments up, the truck will be repossessed, and it will hurt your credit. If you get in too deep, refinancing or selling the truck can be options, instead of repossession. Remember, it is the little things that add up when it comes to operating efficiently that will save you money. Most owner-operators try to keep a maintenance fund for repairs and tire purchases and, when you purchase your truck on your own, this account is NOT controlled by the carrier.

At Trux and Equipment, we want to help the first-time truck buyers succeed. That is why we sell good, mechanically sound trucks at a fair price. We strive to set up first time buyers with weekly payments of $350 to $475. We have multiple finance sources and options for first time buyers, experienced owner-operators and small fleet owners. Not only do we want to sell you your first truck, but many more trucks after that. 

If you are interested in comparing a carrier-based lease purchase versus buying a truck, please give us a call at 330-721-8512 and we will be glad to compare the costs for you.