A country with 50 states and different time zones, the United States covers a considerable landmass. Logistics and freight management are essential for moving raw commodities from producers to retail customers. Trucking plays a crucial role in the transportation process. However, there is always a shortage of drivers in the trucking industry. The Covid-19 pandemic worsened matters since it seriously disrupted supply chains across the United States. Trucking businesses use financial incentives to entice more drivers to address the driver shortage. A significant step in that direction is the zero-down lease purchase option. This scheme is beneficial for forging a long-term relationship between the employer and the driver.
What is a Lease Purchase Program?
Every person driving a truck dreams of owning one someday. The lease purchase program can turn this dream into a reality, where a truck driver can become an owner-operator. The trucking company retains the title in a lease-purchase scheme, but the driver is the actual owner. The driver leases the truck from the company with zero or minimal down payment. Toward the end of the lease, the driver can buy it outright from the company for a minimal cost.
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Benefits of a Lease Purchase Program
Easy Finance
Instead of shelling out over $40,000 for a brand-new truck, you can own one at a much lower price. With down payments between $10,000 to $14,000, it becomes easier to raise the initial capital. Additionally, since the lease purchase transaction is through a carrier, drivers do not need to set up their lines of credit.
Ease of Administration
It is always beneficial to partner with a reputed company. The benefits accrued are manifolds like tracking hours of service (HOS) and managing your loads. Since leased owner-operators continue to operate under the IFTA licenselicence of their carrier, some will have the company handle their IFTA reporting and taxes.
Choice of Operator and Vehicle
You can choose the hauling type you want to undertake and the kind of vehicle you want to buy since it will be a new venture. You can choose a used truck available for a lower price or a brand-new truck that will save you maintenance costs. It is always beneficial to partner with a carrier who will provide you with enough loads.
Additional Benefits
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The lease purchase program many times covers maintenance and service. Some operators may partially or fully cover preventative maintenance costs, performance reports, and driver training. In cases where the leasing company does not cover these costs, you need to be prepared to pay to avail of these benefits.
Ready Permits
Getting permits for your lease-purchased truck is easier as the carrier can get all the requisite regulatory licenses to set your wheels rolling.
Points to consider before entering Lease Purchase Trucking
Monthly Outgoing
The first thing to look out for will be the monthly outgoing and frequency of payments to be made to the carrier. There should be no ambiguity in the amount and terms of payment. Do not sign any contract or document unless completely satisfied with the terms and conditions. In many contracts, the initial payment schedules are unusually low, and a large chunk is recovered as a final bullet payment. You have to be cautious on that front, as you may be looking at paying a big bullet payment at the end of the lease, which may prove to be too much for you.
Tenure of Lease
The primary point when deciding to opt for lease purchase trucking is to understand the length of the lease. In addition to knowing the monthly installment, whether it will remain constant or subject to change, it is critical to know the tenure of the lease as there may be clauses that prevent you from exiting the lease whenever you want. Certain leases levy penalties on early pay-offs. The lease period ranges between one to four years. On completion of the lease, you can have the option of purchasing the truck.
Awareness of Coverage
Being aware of the terms of your lease purchase is necessary, as you are the owner-operator of the truck. As an incentive, many carriers offer to cover some of your expenses. In addition to truck warranty which is a necessity, carriers offer License and permit fees, Federal Highway Use Tax (FHUT), Qualcomm fees, trailer fees, and cargo insurance fees. Any kind of coverage is welcome as it translates to savings for you in the future.
The Operator
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You must research the operator and their lease purchase program. There should be a healthy work culture in the organization. Though you may be the owner-operator of your truck, you still are an employee till such time of the lease. There is a thin line that you need to tread carefully. Make sure the carrier will have work for you to complete and that you will have the money to pay the bills.
Six Best Zero-Down Lease Purchase Trucking Companies
There are many operators offering lease purchase facilities. Following is the list of the six best zero-down lease purchase trucking companies. The objective is to give an insight into the various features offered by these companies and how you can benefit from them.
Matrack devices have been tested & proven in fleets across the United States. Following are some features of the various fleet tracking devices offered by Matrack.
- Matrack XT-2469 OBD
The XT-2469 OBD is a real-Time GPS fleet tracker which is easy to install. It is a diagnostic and monitoring gadget that can track your vehicle’s speed and location.
Product Features:
- Customized alerts with several configurations. Alert options are available for low battery, speeding, and ignition.
- Geofencing for defining a virtual perimeter. Each account can have as many as ten geofences.
- Real-time tracking & travel logs offer details of location, battery life, engine status, speed, direction, etc.
- IFTA fuel tax reports for regulatory fuel tax reporting.
- Configuration of maintenance alerts when your vehicle is due for maintenance.
- Matrack XT-2169 Hardwire
The XT-2169 Hardwire has been designed, for fleet and transportation. The tiny GPS fleet tracker’s direct battery connection and wealth of features make it simple to attach to the vehicle. It can monitor the vehicle’s speed, position, and idle periods.
Product Features:
- Dispatch manager system designed to map jobs into the Matrack GPS tracking platform. This makes the allocation of jobs and the mapping of routes easier.
- IFTA fuel tax reports for regulatory fuel tax reporting.
- The arrival tracking system allows in-transit delivery tracking.
- Matracks tie up with Blink Roadside Assistance with discounted pricing for the fastest emergency services.
- Customized alerts.
- Matrack MA-HW Silver
With unique increased fail-safe capabilities, the MA-HW Silver GPS Solutions device serves as a telematics system and asset tracking tool. The hardware can be set to, give updates as frequently as once every minute or every 12 hours. The MA-HW SILVER is waterproof and tamperproof.
Product Features
- Virtual ignition mode- In the event of a power outage, this mode activates an internal battery connected to a particular motion sensor to keep providing tracking updates based on vehicle movement.
- Aggressive Tracking Mode – The prevention and recovery of stolen property is the objective of tracking mode. If your assets are stolen or disappear tracking mode can enhance tracking frequency.
- IFTA fuel tax reports for regulatory fuel tax reporting.
- Real-time tracking and travel logs.
- Geofencing.
- Maintenance alerts.
Conclusion
A lease purchase is a great way to make your dreams a reality. However, it is necessary to research the carrier with who you want to do business. Partnering with the right company will help your business do well and prosper. We hope this article will help you with options while considering your business partner.
Source: https://t-tees.com
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