While I have been a proponent, to an extent, of the efficacy of the lease-purchase model for new owners and others lacking the capital to secure favorable financing, I’ve always accompanied that with a warning of the potential pitfalls. Having tried several different company programs over the years to lease a truck toward ultimate ownership, I’ve learned several hard lessons about programs structured to set the operator up for failure. Those lessons I've shared with Overdrive readers.
The most-efficient way to protect lease-purchase operators from predatory companies? Kill off the programs. Recent news from the newly formed Truck Leasing Task Force shows they’re at least considering a recommendation that FMCSA do just that. In the words of Task Force member Paul Cullen, as reported here …
“Why get into the nitty gritty of fixing these lease-purchase agreements? I would like to keep it on the table that instead of creating regulations, no debt related to a lease-purchase program should be held by the carrier or affiliated company. This would address the majority of the problems we are discussing."
Cullen’s talking specifically about carrier-administered lease-purchase programs, and to an extent I agree with him. Neither carriers nor their affiliates should hold the keys to the truck while at the same time controlling the amount of miles the driver is offered -- that’s like owing your soul to the company store.
Yet I’m not certain outright prohibiting carrier lease-purchases is the right answer. To kill the model entirely would exterminate an opportunity for drivers to become business owners and improve their financial situation.
In my early years, my lack of business knowledge set me back -- like others, I failed to recognize unfavorable lease terms. Because I didn’t know how to run a business, I failed to know my cost numbers -- as long as money was coming in I thought I was doing fine. Yet learning my numbers and taking more control on the revenue side with solid customer relationships helped me discover when and how I was being cheated by my lease company.
