Lease Owner Operator Plans – 10 Reasons to RUN the Other Way!

Lease Operator Programs have been around for many many years in the trucking industry.

But over the past few years or so, I’ve noticed many more trucking companies are offering these truck lease purchase programs for their drivers.

The programs I’m speaking of are those where a trucking company directly leases one of their trucks to one of their drivers.

What is a Trucking Lease Operator?

A trucking lease operator is really a company driver with all of the expenses of an owner operator. They pay all related costs for the leased truck, including payments, fuel, repairs, maintenance, fuel tax etc.  Normally, the trucking company holds the title for the truck. The driver leases the truck directly from the carrier.

There is often no down payment, or a minimal amount of money required to get on board with one of these lease programs.

Pretty attractive, isn’t it?

How the Truck Driver Shortage Affects the Big Push For Lease Operator Programs

I’m of the belief that in the midst of the current ‘trucker shortage’, more and more trucking companies are using these powerful finance plans to attract drivers to their company.

If the carrier can’t attract drivers to drive company trucks, or if there isn’t a company truck available to a driver, companies will offer these ‘instant ownership plans’ to the potential driver.

Why Lease Operator Programs can be a Terrible Career Move

The carrier then has the driver on board with a heavy commitment to make payments on the leased truck, as well as all truck related expenses.

Because the lease operator agreement will be written in the trucking company’s favour, the new lease owner operator will be obligated to stay with the company, as the company owns the truck.

And why be ‘just’ a company driver, when you could be an instant truck owner at a carrier AND be an owner operator?

Many drivers who dive into these programs are attracted to leasing a truck because of the appeal of instant truck ownership. Getting into truck ownership with a minimal amount of money required as a down payment is pretty attractive.

So the trucking companies are capitalizing on the driver shortage by promoting and actively using these programs, as a recruiting tool.

Paid CDL Training Schools Target New Truck Drivers For Lease Operator Programs

This practice is becoming more widespread in company sponsored CDL training programs too.

When the trainee has completed their training, carriers are marketing these programs to brand new truck drivers.

This can be a recipe for financial ruin for a new driver. New drivers have plenty to think about, know little about the trucking business and have enough on their plate, without concerning themselves with the business of owning and running their own truck.

I’ve know of a few 20+ years experienced truck drivers who have been through a few lease to own plans and managed to make it work.

But I would not recommend these plans for new drivers.

Related > Company Sponsored CDL Training – The Honest Answers You’ve Been Looking For

What We’ve Learned About Lease Operator Programs

Although we’ve never personally been through one of these programs, we can offer some honest warnings and tips for protecting yourself.

However, we have surveyed over 500 truck drivers who have participated in a lease operator program with a trucking company.

From our survey, we will offer some tips and advice to truck drivers from the valuable information we have learned from the survey.

  1. Cannot Change Carriers 

    The driver must remain with the carrier they are leasing the truck from. Freight shortage? Too bad. You’re stuck.

  2. Company Has Control

The company has control over the truck, the number of miles and how much and when the expenses are paid on the truck.

The company then deducts all expenses from the driver’s settlement.  If the freight movement for the company is slow and there aren’t enough miles to be had, the operator won’t earn enough to meet his financial obligations.

It’s not uncommon for the operator to actually owe the company $$ at month’s end, if the expenses are high and the miles just weren’t there. Sometimes the company creates a maintenance account, funded by the lease operator, which the company also controls.

  1. Leased Truck Can Be a Junker

The new operator can be stuck with a truck that is a piece of junk, which leads to high repair bills.

  1. Could Be Loss of Employee Status

 If a driver moves from being a company driver and therefore a company employee, this could mean loss of health benefits when their status changes.

  1. Many Don’t Understand What They Are Signing

Those who sign a lease purchase program agreement with a trucking company, often don’t fully understand the obligations of the agreement. The carrier provides the agreement, so the lease is setup so the trucking company cannot lose a thing.

  1. Lack of Business Sense

Many drivers who enter into these plans don’t have any business sense, which can often bring about financial ruin to the operator. Just because someone is qualified and good at driving a truck, doesn’t necessarily mean they would have the skills necessary to operate a single truck business.

  1. You May NEVER Own the Truck

    Because the company owns the truck and the operator pays all truck expenses as well as relies on the company to earn sufficient money to meet his obligations, the odds can be high that he may never own the truck. Too many factors are out of control of the operator.

  2. Hefty Buyout at End of Contract

At the end of any lease, there is normally a payout where the lessee can buy out or officially own the said vehicle. This can range anywhere from $1 buyout up to $20,000+ buyout cost. If the payments on the truck are low, there’s a good possibility the buyout at the end of the lease, could be big. Be sure to check this out in the lease contract before signing.

  1. Success Depends Heavily on the Trucking Company

Much of the success of these plans depends on the trucking company. If the carrier’s freight lanes slow down, they will definitely filter the freight they do have to their own company trucks before the leased trucks.

Some carriers are more honest than others. A dishonest carrier could easily cheat an operator on their pay, by altering the documents that loads pay or not giving verification of the true value of a load. This is a common scenario with many leasing carriers.

  1. Lease Operators Seen in Truck Stops With Little to No Money

We have seen and interacted with drivers upon several occasions, as have many other drivers we have spoken to, seeing lease operators at truck stops asking to borrow money from other drivers (as well as borrow money from us) for food. We have been approached on several occasions for money by these operators asking for $10-$20 for food. Every time we’ve been asked for money, it was a l. operator, not an owner operator or a company driver. A lease operator.

Each of the stories these lease operators presented were all very similar. Their most recent paycheck was under $100 or more commonly, they owed the trucking company money on the pay settlement.

  1. These Plans Have a History of Being Shady

  • Midwest Distribution. One of the first well-known trucking companies, Midwest Distribution are known as the originators of the Never Never Plan.

This company was sued by the government for their crooked lease operator business practices and went out of business.

In fact, some of the owners of the company actually did jail time for their involvement.

  • Prime Leasing. Recently, we’ve  learned of Prime’s ‘Walk Away Lease’. $1000/week.

This is a super high lease payment!!! And repair costs added on to this? YIKES!!!

Related > How to Become a Successful Owner Operator 

Owner Operator vs Lease Operator – The Differences

A lease operator sounds much like an owner operator. They are similar but there are some very distinct differences.

However this truck ownership model has all of the expenses that an operator has. Yet it does not have the nice perks of being an owner operator.

It’s kind of like being a slave for the trucking company. They are obligated to do as the company wants, and when they want it.

After all, the trucking company runs the show.

Remember, trucking companies are focused on profit. After all, that’s the name of the game in the trucking industry.

Carriers make a hefty profit from these programs. They have little or nothing to lose as they have full control of the lease operator/driver.

They are also committed and under contract for the carrier. If things go wrong, they are NOT free to pack their bags and leave! They are stuck in a bad relationship with the trucking company.

Lease Operator vs Company Driver – The Differences

There is a very big difference between company drivers and lease operators. Company drivers have no financial responsibility for the truck they drive, whereas lease operators carry all financial responsibility for the truck.

Nowadays, a company driver can earn excellent wages with the right carrier. And company drivers are free to walk away from a carrier if things aren’t going well.

A lease operator who leases a truck directly from the carrier, doesn’t have that freedom. And that can bring about a very unhappy situation and financial disaster for the operator.

Want to Become an Operator Operator? Do it RIGHT

If you want to own your own rig, do it the right way.

  1. Save enough money to make a down payment on a vehicle. Then go to a reputable finance company/institution and seek out an honest carrier to work with.

That way, you can maintain control of the vehicle. If things not turn out well with that carrier, you have the freedom to seek out another carrier.

Be in control of your owner operator business.

  1.  Have a lawyer review the contract and advise you on the matter.
  2. Spec your own truck to get what you want or buy a used truck from a reputable used truck dealer.
  3. If you have poor credit, one of these programs is NOT the answer to truck ownership. Save and buy a used truck. Or wait and clean up your credit or stay a company driver.

A Company Driver Is a Great Way to Go

  • No financial worries concerning operating a truck.
  • Just deliver on time. Get the truck, trailer, freight to its destination safely.
  • Sometimes simple is best.

Related > 7 Tips For Buying Your First Truck as an Owner Operator

Lease Operator Plans — Destined For Failure — The Never, Never Plans

There are some drivers who have finished out the lease with a carrier who we have heard from. But the majority of the feedback we get about these plans, is the drivers have not been able to finish paying for the truck.

In fact one of the lawyers who represented the OOIDA in some legal battles against companies is of the belief that these plans are actually set up for failure. These trucking companies make their money when the driver fails to keep up with the lease payments, then they can pass off the same truck on to the next new lease operator.

I have always referred to these plans as the NEVER NEVER PLANS as the truck driver NEVER NEVER owns the truck!

Lease operator plans are designed to benefit the trucking company.

They are NOT based on good will to help you out as they often like to lead drivers to believe. They are not helping fulfill the dreams of company drivers of becoming an owner operator.

It’s a business model designed for benefit to the trucking company. Not the lease operator.

So here’s my recommendations after 40 years in the trucking industry……

Stay away from these programs.

Although we’ve not ever signed up for a lease plan with a carrier, we know for sure there is a high potential for disaster. It’s not always necessary to go through the motions to know something just isn’t worth the risk.

Yes, there may be some companies out there where some drivers manage to finish paying for their trucks and own them outright eventually.

But these scenarios are few and far between.



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