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How to Become an O/O: To lease or not to lease
February 1, 2010
| by: Max Kvidera
To lease or not to lease
Owner-operator Johnny Hall (right) receives the title to his truck from NCI Leasing’s Ed Kentner.
It may seem like the easiest way to many drivers to switch to owner-operator status, but pitfalls exist.
Johnny Hall wanted to own a truck. After two failed deals with other drivers, in 2002 he joined National Carriers and started a lease-purchase program to purchase a 2001 Freightliner Classic. He received the truck’s title in July 2007. “I didn’t have [good] credit or the money, so that’s why I went lease-purchase,” he says. “It was hard, but it can be done.”
In the past several years, the lease-purchase option for truck ownership through carriers has surged.
“Ours was borne out of the fact it was something in the industry that had gained momentum, and it had become a competitive piece to the puzzle in recruiting that you had to offer a lease-purchase program. It was also a retention tool,” says Shannon Crowley, vice president for risk management at John Christner Transportation.
Lease-purchase programs often appeal to drivers who don’t have cash for a down payment or a good enough credit history to qualify for buying a truck through a dealer. Leases range from one to five years, usually with zero or minimal down payments. Trucks typically are late models, though a few programs occasionally offer a limited supply of new models.
Payments and other program expenses come off the top of weekly settlements. Operators usually are responsible for their own maintenance and other expenses, though some programs may cover tolls, permits and plates. During the lease term, escrow money accrues in a maintenance account and is released after the lease expires.
At the end of the lease, the operator may be given the option of buying the truck. An alternative is to upgrade and lease another vehicle. In some cases, the operator may seek outside financing to buy the truck he’s been leasing.
A lease-purchase program isn’t for every driver wanting to be an owner-operator. “For a guy who manages his time and money and truly has a desire to make it work, we have great success with them,” says Ed Kentner, director of leasing at NCI Leasing, wholly owned by National Carriers.
Hall admits that he struggled some months while leasing his truck. “Some weeks I didn’t get a check,” he says. “You really have to watch every penny and your fuel.”
Hall did the lease-purchase through National Carriers for more than two years and financed a buyout of $30,000 for another year and nine months before gaining his title. During his lease, he paid more than $30,000 for repairs, including an in-frame and a remanufactured transmission, which the carrier helped him finance. “They helped me out a lot,” says Hall, who remains leased to National Carriers.
Mike Rose, another owner-operator leased to National Carriers, leased four trucks to the company in the late 1990s before a heart attack laid him low and forced him into bankruptcy. When he recovered, he returned to the company and leased a 2001 Freightliner Classic through the lease-purchase program. After four years of leasing, he bought the truck and still drives it.
“The leasing program was good for me because it got me back in the trucking business again after my heart attack,” Rose says.
Lease Purchase How To
Once you’ve decided you want to pursue a lease-purchase option, choose a carrier that fits your needs, says Eric Cook of Peak Trucking Consultants. “Research it at the beginning. First thing is to make sure you choose the carrier and that the carrier doesn’t choose you. Make sure it’s the right company to work for, that it fits your business and the type of freight you want to haul and where you want to run.”
Next, look at the credibility of the company. Cook advises talking to other drivers who have completed the company’s lease program. “Ask if they had any problems, how repairs were handled, if there were any surprises,” he says.
Examine the lease carefully. Spend a couple hundred dollars on a lawyer to read it over. “If you have questions, ask,” says Ed Kentner of NCI Leasing. “If you don’t understand something have legal representation go over the contract.”
If you have a choice of truck, ask to see the maintenance records. “You don’t want to be leasing a lemon,” Cook says.
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i would like to be an owner operater
halo ;Mr cutis D. preston.
iwould like to be owner operator. cant you give me all the imformation. how to be come an owner operator . my experient as driver only 6mount to 1. years . I’M qualivat for it or not. please email me ; in farghm@verazon.net
thank yuo .
how do I Become an owner operater
thank u
National Carriers
has a truck lease program that is unattainable do to the fact that it takes about 2200 miles before you can make a profit and they will only run you about 2200 miles so that you just break even every week or end up in the negative. It is a total scam. They also charge for equipment that they require you have without you having a choice whether you want it or not such as qualcom etc. There settlement sheets are so difficult to read so that you can not figure out where they are ripping you off. I have had several CPA’s try to ready these settlements
and it is impossible. Also they keep all the money in your escrow and maintenance accounts if you decide to leave. They lease trucks that have not been maintained or up to DOT standards and ending up sticking you with the repairs needed. Total scam all the way around. This use to be a great Company and then a man by the name of Ed Kentner took over and now its a total scam. He talks down to you and will belittle you and treats drivers really bad and everyone at National knows this is just says that is the way he is. Stay far away from this company.
http://www.ripoffreport.com/trucking-companies/national-carriers-li/national-carriers-liberal-ks-caf26.htm
If you really what to do a lease Purchase go to USXpress with them you can make the miles to pay you’re lease and still have a very good paycheck to pay you’re bills and feed you’re family.
@NotHappy,
My father tried the lease-purchase through national carriers and they had treated him the exact same way…they lured him in with the fancy trucks and convinced him that the lease purchase would be extremely successful. He figured at first that he wasn’t making money because he had one of their junk peterbilt 379’s. he found out everything you said the hard way and when he left the company they kept his 7000 dollars in his escrow account…these people are theives who put their drivers through hell. DO NOT JOIN THIS COMPANY!
I was a owner/operator for four years. The money was great but so was the headache. I found a great deal on a truck and leased to own. Once I paid it off I was doing a lot better.
did the lease with prime 3 time trying to make it work but everytime after we hit the 6-7 month miles drop went 5-6 months with out a pay ck was going to try the last time to stick it out but wife would let me she said tired of working for free but we did get cash av to pay bills i wanted to see what it was like after a year mabe it got better but never found out is there anyone who has made it past a year with them ? that can let me know if it got better love the company great team of pepole mabe didnt get the right disp so many ? never answered thxs
I did not drive for Prime but I have heard that a lot of companies will screw drivers over. When o/o’s get close to paying off the truck, I’ve heard that some companies will shorten their miles and make it difficult to make payments. I don’t know for sure, because I have not experienced that. And you know how rumors are in this industry…
***BEWARE*** THIS COMPANY GETS THIER TRUCK PAYMENTS PAID, FUEL PAID AND FRIEGHT HAULED FOR FREE, THANKS TO THE DRIVERS OUT THERE WITH DREAMS OF BECOMING AN OWNER OPERATOR.
My husband signed a lease with National Carriers in Jan 2009. NCI Never reimbursed him for the train ride there. He went 4 or more months with no paycheck (except the 16 cents he recieved one paycheck). He spent 4 to 5 weeks out at a time..NCI promised to get him home every 2-3 weeks. THAT NEVER HAPPENED…
NCI showed child support taken our however the Child Support agency never received the payments (were dealing with that now). They double charged him for a bed warmer blanket and still has not reimbursed him. When he left in Feb 2010, they did not even give him a way home as they said they would. They kept over $5000.00 he had in his escrow account for truck repairs. He made alot of repairs on that 2004 Peterbuilt and when he left, NCI raked him for more repairs.
My husband busted his butt for this company and got nothing. NCI got $35,000 paid on a truck for them.
What’s Ed do about it? Ha…he dont care, he gets a paycheck. He can feed his family, most NCI drivers cannot..
I wonder how many families NCI has destroyed with thier famous LEASE PROGRAM…
NCI gives drivers just enough miles for NCI to make money. LEARN FROM OUR MISTAKE “STAY AWAY FROM NATIONAL CARRIERS”.
Not everyone is cut out to be owner operators I have had some come here and try to run an O/O couldn’t handle the money, always taking advances,not able to handle the regulations, and one I just fired never showed up for his drug test.
I am going to monday contact DAC and let them know to put on his record no show for drug test, I waited for him at the clinic for an hour.
Not everyone can make it, you have to figure out how much you need to get started, we had 7500 set aside for fuel and household expenses lasted 45 days which is when the checks started to come.
Not everyone will finance you if you want a trailer, we were in business for 3 months when I found 2 dedicated runs. we bought one trailer for 2,500 cash and financed the other trailer they wanted us in business for 2 years before they financed us. We proved we had two dedicated coming to 1900 a week off them, I think I can handle 600 a month payment.
So I put some money down and finance the trailer.
Now were buying a building after 5 years in business where we can fix our trucks and cars and others. The thing is don’t go buy a new truck just to avoid fixing it, the payment is between 1000-2000 a month.
buy used if your being a O/O make sure you know how to fix the truck so you don’t have to pay out of the pocket around 2-300 just for oil change and filter change we do ours for a lot less. Carry spare tires in the Rack emergence service just going out is 200 for the call after hours and then tire, labor can come to 800.
We have had someone impound our truck and charge us over 5,000 when they had no hold on us. My driver had an accident with the trailer in Chicago, driver drove truck back to their yard, when he went to deliver the load on their trailer they took our truck and impounded it.
Had to go to court to get some of the money back, they held our truck for someone else’s trailer.
Have an emergency fund of 2-3000 set aside, our truck broke down in the Carolinas and needed a radiator, 1600 for it on the road, radiator actual cost 600, labor 1000.
New to the game. In the middle of carrier transition from military life to civilian. After reading all the responses I have a couple of questions. First of all no one really said when is the best time to become an owner operator, thanks for the heads up about NCI. Second looking at coming into this Bus. with possiblly Werner or Swift, also looking at CSTR. What is anyones opinion about these companys?