There are many different factors you need to take into account when you want to become an independent truck operator. One of the most important things you need to decide is whether you want to buy or lease a semi truck. Irrespective of your financial capabilities, leasing a semi truck is one of the best decisions you can take at the beginning of your owner-operator career.

What Does Semi Truck Leasing Entail?

Semi truck leasing is merely getting a truck temporarily from a company for a stipulated period. Although the truck does not belong to you after the lease term has ended, you have the option of buying the truck outright based on a predetermined price. Since semi truck leasing companies are concerned about getting the trucks back after the leasing period in the right conditions, certain restrictions are often applicable to the terms of semi truck leases. In some cases, there may be mileage restrictions. Also, the semi truck leasing companies may take care of the maintenance costs of the leased trucks.

Despite the perceived benefits of leasing trucks as an independent truck owner-operator, it is vital for you to get it right when leasing a semi truck from any company. Some semi truck leasing companies have incredibly stringent limitations on mileage, carriers to work with and other factors that may affect your profit as an independent truck operator. Therefore, you should be careful when dealing with any companies and make sure to find one that is the right fit for you.

Benefits Of Semi Truck Leasing

If you are contemplating leasing a semi truck, here are some of the benefits you should consider:

• Low deposits and down payments – Unlike buying a new semi for more than $80,000 or used semi trucks for about $30,000, you can save yourself the stress by merely getting a new or used semi truck for lease for a much lower price and with low down payments or deposits.

• Little or no credit checks – If you have a bad credit score, you can still lease a semi truck as some semi truck leasing companies do not check your credit scores before assisting you with their semi truck leasing services. However, most will still run one because it lets them gauge how risky of an investment you are to them and will determine the payments you have to make on the vehicle. This does mean that you will end up paying more during the lease than someone with good credit, but it is still a good option as long as you know that you can make the payments. Make sure you know how much it is going to cost before entering into any agreement; you don’t want to end up with payments that you aren’t able to afford.

• Buy-out options – Normally there is a buy-out option at the end of the lease agreement, at this point, you will be able to purchase the vehicle for a much lower cost than if you had initially tried to buy. The buy-option clause allows you to pay a predetermined amount to own the truck outright. This can be as little as $1 depending on how long the lease agreement was for and how much you paid each month (the more you paid over time, generally the lower the buy-out payment will be).

• Short term commitment – The duration of semi truck leases are usually for three to four years; hence, there is no long-term commitment. If you want to terminate the agreement before the agreed time, you will most likely only have to pay some penalties. Since it often involves only short-term commitment, leasing can also be the best way for new drivers to test their luck in the industry as their businessman as they can back out easily whenever they have any problems without losing too much money. Getting into the industry by immediately buying a truck can be a very risky investment if you don’t know if it will be profitable for you.

Getting Semi Truck Leases With Bad Credit

Without a doubt, you may encounter difficulties getting semi truck leases with bad credit scores as this indicates to lenders that you are a much riskier investment based on previous financial precedents than those with good scores. Do not get worked up over this as there still are many companies that are ready to take risks on people with bad credit; it may just end up costing you more.

It should also be noted that the more your down payments or deposits, the cheaper the rates you will be able to get from any companies irrespective of your credit score. This is because the lending company is taking a smaller risk with significant down payments or deposits.

Apart from bad credit, other things that may militate against you when leasing semi trucks include:

• Having a recently repossessed truck – You will have to add real collateral to get semi truck leases if this the case. Furthermore, you may not be able to get a lease at all, consult a leasing company for more information on this.

• Bankruptcy that is not discharged – Most companies will choose not to do business with you if you have a recent bankruptcy that has not been entirely removed.

• Child support issues – With child support issues, you have little or no chance of being offered a truck through semi truck leasing.

>What To Do When Leasing A Truck

As previously stated, different carriers have their opportunities and restrictions when it comes to semi truck leases. Depending on the company’s business practices and what kinds of things your contract includes, you could end up in financial trouble from leasing a truck. Nevertheless, there are certainly ways to lease a truck without ending up in a financial pit; here are a few things you need to do before you try to lease to get the most out of this investment:

Consult other independent truck owners
Before embarking on the journey of looking for the best carriers that can lease you a truck, it is highly recommended that you speak to other drivers who have leased trucks or are currently leasing trucks. While some truck drivers are sentimental in their views, you are likely going to learn some things about which semi truck leasing companies are reliable when you speak to a couple of semi truck drivers. From their reviews, you can quickly make a list of the companies that can offer you excellent services.

Research about the companies on your own
Do not take the words of truck drivers as your sole means of selecting a company, make sure to take some time to do some research on our own about each leasing company. Not only are leases usually tailored to individuals based on their needs and how well you can negotiate with the company, but some companies may have changed their policies recently, and you could end up with a better deal than others. You will be able to find lots of useful information online about each company, so there is no excuse for failing to research any company.

Understand the contract
Since each company can offer different agreements depending on the individual seeking the lease, you must be mindful of the possibility of some dubious companies trying to sneak in certain terms to take advantage of you or put you in a situation where you won’t be able to make the necessary payments. You should carefully read each sentence in the contract and understand what it is all about. If you have any difficulties understanding any clauses in the contract, ask for an explanation (the leasing companies are required by law to help you if you don’t understand something in the contract). Alternatively, if you know someone who has better knowledge of contracts, you should try and bring them along with you. Some things to pay particular attention to are the terms of down payment or deposit, maintenance costs, cargo insurance, and towing costs. Never sign something that you don’t completely understand all the conditions too.

Consider the insurance and tax
When leasing semi trucks, you should never overlook the tax and insurance involved. While working for a trucking company, you may have been provided with life, dental, health, and vision insurance; now that you are out on your own and leasing your truck, you will have to consider the cost of paying for insurance on your own. You will also be responsible for any taxes for money that you make throughout the course of the year, depending on how you get your checks you may have to put aside money for taxes at the end of the year. Make sure to consider the tax and insurance options available to you, whether this is through a company or on your own, before signing any semi truck leasing agreement.

Calculate the profitability of leasing a truck
The main reason for you to get a semi truck lease is to make a profit and improve your finances; therefore, you must consider whether you will make money from the lease or not. You should run the numbers and see how much you can make each month from driving the truck and what your expenses are going to be. Some of the costs you need to consider include income, truck fuel, mileage fees, cargo insurance, licensing, permits, fuel surcharges, tires, tolls, legal fees, maintenance, truck washes, parking, unloading and other fixed and variable expenses.

With all essential things considered, you can sign the agreement and start making money with the semi truck.

Possible Drawbacks With Semi Truck Leasing

In your preparation for a semi truck lease, it is imperative for you to understand some of the problems you may encounter. Over the years, there have been many different complaints by independent drivers about leasing companies; therefore, knowing these complaints may help you mitigate the problems associated with them. Some of the problems are:

• Strict and confusing contracts that offer the independent drivers little or no benefits (again make sure you understand everything in your contract before you sign)
• Huge deposits, repairs costs, and escrow that put the drivers at a disadvantage (some leasing companies will handle repairs for you, but you will end up having higher monthly payments. You must decide if this is right for you).
• Compulsory repairs at the repair facilities owned by the semi truck leasing companies with unfavorable repair rates determined by the companies
• Overcharging of the independent drivers by the companies for fuel taxes
• Attachment of high minimum spending limits to accessing of the funds for repairs and tires; thus, making it extremely difficult for the drivers to ever make use of the funds
• Huge insurance fees

However, if you have any problems with leasing semi trucks, do not be despair as you can turn to driver advocacy groups such as the Owner-Operator Independent Drivers Association for assistance. With the evidence of being mistreated or cheated by the semi truck leasing company, the driver advocacy group can help you file a lawsuit so that you can get the best solution. If you can prove your case, you may be awarded substantial settlements that may even be enough to compensate your loss. However, despite the possibility of getting settlements, you must never leave yourself open to being treated unfairly or illegally by any carrier. Know your rights, that way you won’t be taken advantage of, although there are companies out there that practice honestly, you should still be mindful that there could be people trying to deceive you and take advantage of you.

Is Leasing A Semi Truck A Good Idea?

In a nutshell, you must understand that becoming an independent truck operator is not an easy task as it demands your ability to work diligently and wisely to get the most out of your business endeavors. It is just like having any other business; you have to make use of the resources available to you. Therefore, consider your readiness as well as ability to keep the terms of the leasing contract before committing yourself to it. If you can follow the information provided above on semi truck leasing appropriately, it should be possible for you to navigate the process of leasing a semi truck without much hassle.