If you are thinking about becoming a lease purchase owner-operator, there are a few things to consider before signing any agreement. You will want to make sure you compare what different carriers have to offer and make your decision after doing some research. You don’t want to be locked into a contract that is too long, where you are paying too much money.  

In order to help make this decision a little easier, check out a few things we suggest you know before signing a lease-purchase trucking agreement.

Know what your monthly truck payments are going to beTruckers Agreeing On a Lease Purchase Trucking Agreement

Leasing a truck through a carrier means you will have to make monthly payments to the carrier in order to drive the truck. Carriers should clearly state how much the monthly payment is going to be and when you have to start making payments. If a carrier is not clearly stating the amount of the monthly payments, you should not sign an agreement with that carrier.

Some carriers also offer different truck payment options depending on the truck model and age. Knowing how much you will have to pay each month is something you must understand before signing a lease-purchase agreement. It can also be one of the more important factors to compare to other carriers when deciding what carrier to drive for.

Know how long the term is

Another important thing to know about the lease-purchase trucking agreement is how long the term of the lease is. It is common for carriers to have lease terms between one and two years. After the term is up, you will have the option to start up another lease agreement with the carrier, or walk away. Some carriers will also provide the option to purchase the truck after the lease term is up with the monthly payments you have been making applied to the purchase price.

A lease-purchase agreement is a contract between you and the carrier. Not all carriers allow you to simply walk away from a lease-purchase agreement whenever you want. That means it may be difficult or costly to get out of an agreement before the term is up. This makes knowing the term of the lease agreement even more important.

Know what costs will be covered by the company

As a company driver, you are an employee of the carrier you pull for. This means they will cover the costs that come with driving a truck. As a lease purchase owner-operator, you are the boss of your own trucking company. This means you will be responsible for the majority of the costs. However, some carriers will offer to cover a few of the costs in order to incentivize you to sign a lease-purchase trucking agreement with them.

One of the more common cost coverages you will see is a 100% bumper-to-bumper warranty. This coverage will save you from all maintenance costs including oil, preventative maintenance, and repair bills. Some of the other costs that may be covered by your carrier are Qualcomm fees, trailer fees, and cargo insurance fees. There are many costs associated with being an owner-operator, so any costs that are covered by the carrier is a nice bonus.

Know what kind of truck you will be leasing

You may not choose the carrier you sign a lease-purchase agreement with based on the truck they provide, but it’s still an important thing to consider. The variety of trucks you have to choose from differs from carrier to carrier. Most of the trucks will be three to four years behind the current model. Many carriers offer only one brand and model of a truck while others offer two or three.

Aside from spending most of your time in the truck, knowing what kind of truck you will be leasing is important for two reasons. If you are leasing a truck that is older, the cost of maintenance will typically be higher. The other reason is if your goal at the end of the lease is to purchase the truck, you won’t want to purchase an older truck that will cost more to maintain and upgrade. These are just two of the more important reasons for why you should know what kind of truck you will be leasing.

Know what kind of bonuses different carriers offer

If you are having a hard time deciding between two or three carriers that you want to sign a lease-purchase trucking agreement with, consider the bonuses and incentives that the carriers offer.

Previously, we spoke about some of the costs a carrier will cover which can be considered a bonus that you can use to help make your decision. Another bonus that is often seen is “no money down” or “no fixed expenses” for the first couple of weeks you are in the truck. Additionally, a common bonus that carriers offer is a sign-on bonus for choosing them. Lastly, many carriers offer a fuel surcharge to cover the varying cost of fuel. Definitely consider the bonuses each carrier offers when making your decision. Just don’t make it the only thing you consider.

Ready to sign a lease-purchase trucking agreement?

Hopefully, you find this information valuable when deciding which carrier you want to lease with. These are all things that are very important for you to know before signing any contract or agreement. If you have any questions or concerns about signing a lease purchase trucking agreement, feel free to give us a call at (888) 640-4829.

SHARE THIS:

Related information

How to Prepare for Roadcheck 2019

Roadside inspections are a critical part of the trucking industry. Failing a roadcheck will result in time off of the road and money lost for you and/or your trucking business. In order to avoid violations the next time you are stopped, follow these tips to make sure you are prepared for roadcheck 2019.

Read full story

What are the Most Overlooked Owner-Operator Truck Driver Tax Deductions?

Owner-operators are not just responsible for calculating and paying their own taxes, they’re also responsible for deducting expenses, which can significantly lower their tax burden. Because of this, we often get asked about the common tax deductions that owner-operators can take advantage of. In this article, we will help answer this question by discussing five of the most overlooked owner-operator truck driver tax deductions.

Read full story

The Ten Most Popular ATBS Articles from 2018

Looking to jumpstart your trucking business in 2019? Check out the articles that were read the most during the past year and become a more well-rounded truck driver and business owner!

Read full story

KEEP YOUR BUSINESS BETWEEN THE LINES WITH USEFUL INFORMATION SENT RIGHT TO YOUR INBOX.

Sign Me Up