Tuesday, September 2, 2014

The Rise and Demise of Truck Lease-Purchase Programs

Large numbers of truck drivers have been learning about lease-purchase plans that are being pushed by so many different trucking companies and are probably wondering whether this is something that they should get themselves into.

Many of these contracts are also getting a very bad rap, with the benefits being placed primarily on the side of the trucking companies – not the individual truckers who get signed up into one of these programs.  On the surface it may certainly seem so! After all, the trucking company gets to pass along the prices of fuel, licensing & maintenance costs and health insurance right onto the truck driver, while foregoing the need to provide them with a proper 401k plan!

This article will highlight some of the advantages and disadvantages of truck-lease purchase programs to see if they are something that can benefit you.

The Benefits of Truck Lease-Purchase Programs

Commercial truck leasing provides enormous benefits to the truck company that is leasing their trucks out as mentioned above, but part of these benefits are certainly transferred over to the actual truckers, even if it is done indirectly. The operating expenses of a firm can be seriously affected by the costs of buying new trucks and leasing can be a vital strategy, to keep buying and maintenance costs as low as possible.

Since companies who buy new trucks often have to deal with the harsh realities of getting a loan from the bank, leasing is an excellent way for them to avoid this. But wait! You may be asking – that’s great for them, but what’s in it for me? Well, in order to make these offers more attractive for drivers, the company can quickly draft up a lease-purchase agreement that requires no credit checks, down payments or any other large security measures used in traditional loan applications. Instead, all the money simply comes from the trucker’s pay check.

You can also look at this way – leasing is a precious way to spare cash for the company on cost of buying new trucks. This cash can then be used to provide better wages and conditions for the company’s employees – at least one hopes so. With that in mind, let’s move onto the drawbacks of getting into these lease-purchase programs, and there are many!

The Negatives of Truck Lease-Purchase Programs

Trucking is not a very predictable business. What happens if you incur any injuries, accidents and illnesses while on the job? Guess what, your paycheck stops but your lease-purchase contract doesn’t! And when that happens don’t expect the trucking companies to suddenly become a charity for you.

Also, you never really own your truck and you are stuck with the company you rented from. If you are renting your truck from a company, it is really owned by them. This means you can’t just leave to a different company if you get tired of their terms.

Be sure to always read the fine print of any contract. Many contracts are cleverly drafted to ensure that any problems will always be your fault. Learn from the errors of other people who have been in such contracts to get a better idea if this is something suitable for you.

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