Trucking: Carriers Lease/Purchase programs, cargo liability, inflated costs

Question
I've been running OTR/Regional for 8 years as a "company driver" and really feel that I want/need to get my own business going as an O/O.  I see more and more carriers offering these Lease/Purchase programs for new O/O's and most of these "deals" look extremely expensive for the driver.  What are the pro's & con's of going O/O with one of these L/P programs?  Is it smarter to just bite the bullet and purchase from a dealer?  I've noticed that with many of the L/P programs the carrier is also including certain insurance, base plates, permits, etc. which I would have to pay for anyway - they're just lumping it all together in the monthly payment - or are there still some inflated costs?
Thanks in advance for you help.

Answer
Hi Robb.

There is good and bad with the Lease/Purchase programs.  OOIDA really hammers some companies that try to take advantage of drivers.  My first bit of advise would be to research their website (www.ooida.com) on carriers that you might run with.

The pros, though, are numerous with L/P.  You can get into a truck for little or no money down.  If your a Joe off the street, a dealer is going to want $5k to $10K down on a USED truck.  Then, you get everything as a group.  From health insurance, 401K to fuel/tire discounts and the all important (and expensive) cargo/liability insurance.  Like you said, they sometimes will throw in base plates, permits, etc.  When you start adding up the cost of everything on your own, it can be quite overwhelming.

Cons will be if you have to sign on with them for a certain amount of time.  You probably won't be able to break the contract earlier (without messing up your credit and giving up the truck).  I always hear OOIDA suing companies for illegally withholding escrow funds and for unauthorized deductions from the drivers.  Your still at the companies call, so to speak.  As an O/O will you still have forced dispatch?  Can you choose where you want to run?  Your also competing with company drivers for loads and until you have that title in your hand, no modifications to that truck and the governor stays set where it is.

I think because of the money issues, you almost have to go with the L/P programs unless you have deep pockets.  Another route is to look into smaller companies with only a handful of trucks.  They won't offer the perks like the big companies, but you'll have more freedom.  If you have issues, or questions, you can talk to the owner and not someone in dispatch.  It's usually more relaxed and more flexible than a large company.

You've got 8 years in and so you've got a good knowledge of trucking already.  My last bit of advise would be to take any paperwork for a L/P and go over it with a lawyer.

Good luck!

Bob Stephens