What Will You Receive Here? Why Should You Spend Your Time Reading This Article?

Hello, my friend! My name is Dennis, and I’m an expert in the trucking industry with over 12 years of experience. I’m the guy who used to sell you company positions, lease, or lease-to-purchase opportunities. I’m also the one who searched for you online and gathered your data to offer you those positions. Over the years, I’ve worked with more than 1,500 drivers and the same number of owner-operators.

Now, I don’t want to waste your time. Instead, I want to explain what you’ll gain if you take a moment, sit down, and read this article from start to finish.

Congratulations! You’ve landed on the right page on the internet.

Here’s what you’ll learn:

• The difference between an Owner-Operator and Lease-to-Purchase arrangements.
• The responsibilities that come with being an Owner-Operator.
• Why truck drivers choose Lease-to-Purchase programs.
• The best scenario for starting a Lease-to-Purchase program on your own.
• Key factors to consider before joining a Lease-to-Purchase program.
• A link to the Top 5 Lease-to-Purchase Trucking Companies.
• A detailed overview, along with the pros and cons of these companies and their programs.
• My Conclusion

What is a Lease-Purchase Program?

If you're still reading this article, it means you’re either looking to start a new chapter in your life as an Owner-Operator or you're considering switching companies and buying a truck through one. Let’s first understand what it means to be an Owner-Operator and what a Lease-to-Purchase program entails.

An Owner-Operator (OO) is someone who owns their own truck—whether it's a pickup truck or a semi-truck. This means the person operates independently with their own equipment.

Lease to Purchase (L2P) – A program offered by trucking companies that gives truck drivers the opportunity to purchase a truck with financing, often at 0% interest and sometimes with no down payment.

A truck driver can choose a truck from the company's fleet that is eligible for the Lease to Purchase program, including options for make, model, mileage, condition, and year. Once you’ve selected a truck, an employee from the company (such as a fleet manager, recruiter, company owner, or salesperson) will perform the financing calculations for you. For example, if the truck costs $59,000, the maximum financing the company can offer may be for a 3-year term (36 months). This means you would pay $1,638 per month, or $409 per week. If you agree to these terms, you’ll need to sign a contract and begin working.

However, here's the most interesting part of the Lease to Purchase program and why it’s attractive to trucking companies:

When you sign a Lease to Purchase agreement and agree to pay, for instance, $409 per week, new responsibilities and payments will come into play. To purchase a truck through the Lease to Purchase program, you must commit to working with the company for the entire duration of the lease, typically 3 years (depending on the terms). This means you cannot leave the company until the truck is fully paid off. If you stop paying for the truck and quit before completing the payments, you’ll lose all the money you've already paid because you will not own the truck—the trucking company will still hold the title.

Additionally, you will be responsible for the following:

1. Maintenance and Repairs
(Some programs include maintenance packages, while others leave these costs to the driver.)

• Preventative Maintenance: Oil changes, tire replacements, inspections, and routine servicing
• Repairs: Major repairs not covered under warranty.

2. Fuel Costs

• Drivers are responsible for paying for fuel. (Some companies offer fuel surcharge programs to offset costs or provide discounts via fuel cards.)

3. Insurance

• Primary Types of Insurance Needed:
  • Liability Insurance: Covers damages caused to others.
  • Physical Damage Insurance: Covers repairs to the truck.
  • Cargo Insurance: Covers damages to the load being hauled.
  • Occupational Accident Insurance: Covers injuries to the driver.

4. Licensing and Permits

• IFTA (International Fuel Tax Agreement): Quarterly fuel tax filings based on miles driven in each state.
• IRP (International Registration Plan): Covers multi-state vehicle registration fees.
• DOT Compliance: Costs for inspections and other Department of Transportation requirements.

5. Trailer Rent

6. Dispatch Service
(Typically, 12%–20% of revenue from loads goes to the company as part of the dispatch service.)


7. Escrow Payments
(Some companies require drivers to contribute to an escrow account to cover future maintenance or lease-related costs.)

8. Miscellaneous Costs

• Tolls and Weigh Stations
• Communication and Technology (Costs for GPS devices, ELDs (Electronic Logging Devices), or communication systems.)
• Other Operating Costs (Parking fees, meals on the road, and other day-to-day expenses.)

Let’s calculate the weekly expenses for a better understanding:

• Maintenance and Repairs: You should save $500 per week to cover expenses when needed.
• Fuel Costs: If you’re driving 3,000 miles per week, you will need to pay around $2,500 per week.
• Insurance: $180 - $350, depending on the company and coverage level.
• Licensing and Permits: $40 - $65 per week.
• Trailer Costs:
  • Dry Van Trailer: $150–$350 (including insurance and maintenance).
  • Reefer Trailer: $250–$550 (including insurance, maintenance, and reefer fuel).
  • Flatbed Trailer: $200–$400 (including insurance and maintenance).
  • Specialized Trailers: $300–$600 (depending on type and additional requirements).
• Dispatch Service: 12% - 20% of the gross revenue.
• Escrow: Usually around $2,500, with $250 per week for the first 10 weeks.
• Miscellaneous Costs:
  • Tolls and Weigh Stations: $60–$175.
  • Communication and Technology: $20–$50. Plus, $300 - $600 for a good trucking GPS. You can find the best one in this article, or if you’re on a budget, you can start with a GPS app. Read more here to find the best one.
  • Other Operating Costs: $220–$490 (parking, meals, snacks, coffee, laundry, and showers at truck stops).

But not all companies can provide you with a $10,000 gross right now. In 2024, most companies can offer around $7,000, so here’s how the money breaks down each week.

The second calculation is more realistic for the current market conditions. You need to understand that when you join a lease-to-purchase program, the market situation impacts you more than if you were working as a company driver. You need to be smart and make the right move at the right time.

Most of the time, a truck driver works as a company driver and wants to grow by buying their own equipment because their friends are already Owner Operators or on a Lease-to-Purchase program. They tell you, "You’re doing the same job and making more money." Or, you might find this option online and start thinking, “Why not? Maybe I should buy my own truck and become more successful,” and you start searching for answers online, watching YouTube videos, reading forums, and eventually landing on this article.

You’ve seen the list of responsibilities for an Owner Operator. This is when you own your truck or take out a loan through a bank or financial company to buy your equipment, pay off the loan, and cover your family’s bills. Essentially, this list of responsibilities is the same as that of a regular trucking company. For many drivers, it’s difficult to handle all of this at the start, so they look for a less stressful option and try to make an easier transition.

Ok, let’s take a look at why trucking companies offer these programs in the first place.

Why Do Trucking Companies Offer Lease-to-Purchase Programs, and What’s Their Interest?

First, the primary interest for trucking companies in offering a lease-to-purchase program is to lock you in for the duration of the lease agreement, which is usually between 3 to 5 years. This means for the next 3-5 years, you’ll need to work for the company you chose for the lease-to-purchase program. In my opinion, this isn’t good for you or any other truck driver:

Trucking companies don’t worry as much about you because they know it’s harder for you to quit compared to a company driver position. If you leave the company, you’ll lose a lot of money. Most of the time, this includes:

• Your down payment
• All payments you made toward the truck
• Money you’ve paid for repairs
• Your escrow and any last statement (if the company has a one-week hold, you’ll lose that too).

Over the next 3-5 years, the trucking company will sell you everything you need to operate, all while benefiting from their interests. For operation, you’ll likely need the following:

• Trailer: You’ll rent the trailer from the trucking company, with their terms. Trailer rental rates may fluctuate over time, but they’ll never be lower than when you signed the agreement.
• Dispatch Service: For the next 3-5 years, you’ll be required to pay for and use the company’s dispatchers. You won’t be able to move to other companies. You can choose loads, but it won’t make much sense to do so. You can change dispatchers, but it won’t really make a difference. The top dispatchers in the company prioritize company trucks with company drivers to maximize profit for the trucking company. You’ll essentially need to close your eyes and follow the company’s instructions. Additionally, the percentage you pay for dispatch can increase over time. For example, the rate might be 12% when you sign, but after six months, it could go up to 14%. The explanation you’ll receive may sound something like this: “Sorry, the market is tough right now, and we need to increase this percentage. Once the market improves, we’ll reduce it.”
• You will need to use all of the company services, similar to salary expenses for the staff:
  • Accounting: This includes counting your money, preparing statements for you, and this service costs extra.
  • Billing: They handle invoices, check BOLs (Bill of Lading), send them to brokers, and track payments.
  • Safety: They manage your documentation, registrations, permits, calculate IFTA, etc.
  • ELD (Electronic Logbook Device): For the app and support.
  • Fleet Support: They arrange repairs, road services, and communication with service providers.
  • Insurance: The trucking company will add their own fee on top of the insurance cost, usually $15-$30, which you may never be aware of.
  • Fuel: The company will provide you with a fuel card to use. As an owner-operator paying for fuel, you can ask for a discount, and the company may give you a small discount (for example, 20 cents per gallon). However, they likely receive a much larger discount from the fuel card provider (e.g., 50 cents or more per gallon). Keep in mind, trucking companies will never miss a chance to make money off you. Important: You, as the owner-operator, can choose to use your own payment method (debit or credit) to pay for fuel if you find a better way to save money. You’re not obligated to accept the company’s offer if you can find a better deal.
  • Tolls: You will use the company’s iPass and PrePass for tolls, as you cannot register your own passes without being affiliated with a truck. Don’t forget, your truck is registered under the trucking company. Some drivers try to use fake information to bypass the registration, assuming the devices will work automatically. However, these devices don’t always work, and if a toll company sends a ticket, the company will charge you for it. Not all companies allow you to use your own devices, and if you leave the company and there are tickets pending (within 30-40 days), you may have to pay for them. You can request a monthly toll report to ensure they haven’t charged you extra, but it can be difficult. If the company agrees to provide it, they may charge you for the report, as it takes time to find your device number in the toll records and generate a report just for your device. Most companies won’t want to do this, as it requires analyzing large Excel files to track tolls.
  • Cart Rates: This is a bigger issue, but just know that not all companies will give you the full amount for the loads they book for you. For example, they might book a load for $1000, but only tell you it’s worth $900. It’s hard to verify this, and while you're in the lease-to-purchase program, it’s probably better not to know, because if you quit before the truck is fully paid off, you'll have more problems.

Now we understand why trucking companies offer this lease-to-purchase option. You, as an owner-operator, are a real business for them. You bring in money, don’t quit easily, and work hard for the next 3-5 years. If you do quit, the trucking company keeps all your money and takes the equipment back.

Key Factors to Consider When Choosing a Lease Purchase Program

Once you understand your responsibilities and the list of expenses, the key to choosing the right lease-to-purchase program and company is to go through this list and analyze each company on the market that offers such a program. You can find these companies on our Job Board’s lease-to-purchase page. Here is a short list of the most important factors to consider:

• Initial costs (e.g., down payment, credit checks).
• Maintenance responsibilities.
• Weekly mileage (which impacts your expenses).
• Dispatch service percentage.
• Length of the lease.
• Additional perks, such as fuel discounts or bonus programs.
• Escrow requirements.
• What the total weekly cost will be if the truck costs $50,000. (Ask them this question and request an email with a detailed breakdown of what they plan to charge you).

After analyzing multiple companies, you’ll need to choose the right one based on the information you gather from emails. Don’t forget to read reviews online, search for video reviews, or ask friends who have gone through the program with them. You can also create a new thread on our forum page to collect more answers from other users with experience in this program.

Potential Pitfalls and How to Avoid Them

There are several risks and pitfalls to be aware of, with the biggest one being choosing a bad company and working with them for the next 3 to 5 years without making a real profit, just to buy a truck. This can be very difficult and may not be worth the cost. Another significant pitfall is repairs, as you never know exactly when your equipment might stop working.

Another challenge is the down payment. It's crucial to find a company that doesn't require a down payment, as this can save you around 10% of the truck's price if you decide to quit.

Payments, escrow, and the one-week hold are also real risks. To avoid these, you should try to forget about this money because, in reality, you won't be able to get it back. The only way to mitigate this is if the lease-to-purchase contract has no penalties for quitting or closing.

Conclusion and Recommendation

If you've read this entire article, you should now understand the pitfalls and risks associated with the lease-to-purchase program. I hope you've realized that you could end up working for many years without making a significant profit, or you may lose money altogether. This is a very high price to pay for a semi-truck.

Additionally, as an owner-operator in a lease-to-purchase program, you'll bear more responsibility, and you need to be prepared for that. The issue is that it can be difficult to fully understand what's going on during the work process, especially when it comes to charges.

"My Recommendation to You! (For truck drivers who want to make the best possible choices: if you're able to do this based on your background, then you can certainly use a lease-to-purchase program, but keep in mind the knowledge I've shared and find the right company that clearly explains all your payments.)"

Buy a Truck from a Dealership
If you have the option to buy a truck through a dealership (you can find dealers here) and and apply for a credit line, this is the best way to go. Yes, you'll need a good credit score to apply for the credit line and secure a lower interest rate. You should also expect to pay a down payment of at least 10% of the truck's cost. However, this is an investment in your life, your peace of mind, and your freedom. What do I mean by that?

First: Before buying a truck, you need to be financially stable and know how to save money, at least for the following:

• Down payment: $15,000
• Registration: $3,000
• First fuel: $3,000
• First repair problem: $3,000

Total: $24,000

These are rough figures, but they show that purchasing a truck is a huge commitment, and you need to be ready for the financial demands. Saving money is an essential part of any business, and having a good credit score will be important, especially if you don't have a lot of previous credit or bad history.

Relationship

If you buy a truck through a bank from a dealership, you are a real owner-operator. From that moment on, all your dealings regarding the truck and payments will be with the bank or a financial company. The trucking company will have no influence over your truck and cannot claim ownership. Your relationship with the trucking company will change. At this point, you, as an owner-operator with your own equipment, will be coming to the company to buy their services. Essentially, you're a buyer, and at any time, you can leave the company (although you will likely lose your escrow and any hold for one week) and go to another company that offers better:

• Relationships
• Discounts
• Dispatch service percentage
• Trailer rental prices
• Gross income

The trucking company won’t want to lose you, and if you ask for benefits like discounts, they’ll likely consider your request and try to accommodate you in order to keep you on board.

Credit Line
When you work with your own equipment for a trucking company, you can also request the company to pay for repairs or maintenance, which will be deducted from your statement. In most cases, the trucking company will do this. This is a great opportunity to start building your own company and a credit line for your business. After you’ve purchased the truck and made proper payments, banks will trust you more and may even offer you another unit with a better interest rate.

Choose a Trucking Company
This is one of the most important factors to analyze before deciding to work with any trucking company. If you're still a company driver and you’re planning to buy a truck through a lease-to-purchase program or from a dealership, start your analysis now. Find a company that offers a lease-to-purchase program and evaluate it. Go work there as a company driver to better understand how they operate. During this time, you’ll have a clearer picture of whether you can build a business with them when you're ready to buy a truck. You’ll understand:

• How they operate
• How they are responsible
• How they pay
• Whether there are any charges from the start for company drivers
• Their communication with you

Good luck, my friend. Make sure you take the right steps!

We took this video from ET Transport! YouTube Channel.