Are you an independent contractor who leases your truck from a leasing company or a trucking company?
Chances are, you’ve probably heard horror stories from other drivers about specific companies or leasing programs that didn’t treat their drivers well. Whether it was because there were hidden fees in the contract or the driver signed the contract without reading it, it can be frustrating to feel like you’ve been misled.
Feeling like you’ve been duped by your leasing company or trucking carrier can result in a lot of hurt feelings and potential financial burden. Maybe you’ve been in this position before and you’re not quite sure if it’s time to give up on leasing a truck and try a new career altogether.
As a leasing manager, I help drivers just like you lease their trucks. I focus on transparency and truth in trucking so you know what you’re getting into before you sign the lease, not after you’ve already been charged a hidden fee or been forced into something you’re not comfortable with.
I want you to make the right decision for you and your family and not feel trapped or misled by a lease contract.
I’m prepared to give you all the insider knowledge you need to know and questions you need to ask before you sign the lease, from understanding if you’ll be penalized for early termination to maintenance costs you might be responsible for.
You Could Be Penalized for Early Termination
Find out if there is a penalty for early termination of the lease.
You should ask about what happens when your lease ends — from where you need to turn your truck in to avoid a truck abandonment to any fees you may be responsible for by ending your lease early.
Some companies may not penalize you for ending the lease early, while some companies will have penalties depending on when you leave the lease.
For instance, if you leave the lease within six months of signing the contract, you may be responsible for paying several weeks or months’ worth of payments — especially if that company gave you a few weeks of no payments for signing on with the company.
You May Lose the Money in Your Maintenance Account
Be sure you clearly understand how your maintenance account works and what happens to it when you leave the lease.
Trucking carriers will have a specific amount of time to get your old truck prepped and ready for the next driver. Then they will release any remaining funds back to you. For instance, if they only had to do $2,000 of prep work and you had $4,000 in your maintenance account, you would receive a total of $2,000 back to you.
Once you turn your truck in, it will need to be restored back to factory conditions so that it’s safe for the next driver to use it. That means they’ll not only replace the mattress and clean and detail the truck, but they’ll also complete preventative maintenance and an inspection to make sure any potential issues are taken care of.
So, if you’ve failed to take care of a repair because you didn’t feel like paying for it during your lease, you will end up paying for it at the end of the lease. Don’t put off repairs because you don’t feel like paying for them. You will pay one way or another, and if you let the issue go too long without getting it fixed, you may end up with bigger, costlier problems.
Make sure you are clear on what is considered acceptable wear and tear versus what you will be responsible for having repaired/replaced.
You Might Not Be Able to Buy the Truck After the Lease Ends
Some companies will let you purchase the truck after your leasing period ends. Some companies will not.
If the company does allow you to buy the truck after the lease, be sure you know what their balloon payment policy is. The balloon payment is the cost you will have to pay upfront to receive the truck title.
The payment is typically the value left on the truck after all your payments throughout the lease are taken into account. Many drivers will opt to finance this payment from a third-party institution.
Some companies have a minimal balloon payment, so be sure you understand what will be expected of you.
You Might Not Get Your Sign-On Bonus
Some companies offer a sign-on bonus or a bonus for when you complete the lease. While every company has a different bonus policy, be sure that you know what you can expect to receive and when you can expect to receive it. Ask if there are any reasons you may not get it.
For instance, you may not receive your completion bonus if your maintenance account is in the red and you have an outstanding shop bill or you owe the company money for some reason.
There Could Be Hidden Fees
Some companies will make you pay trailer rental fees. They might make you pay for permits or you might have to pay your pilot cars out of pocket. Before you get started, be sure you know exactly what you need to pay for each week or month.
You Might Have to do Maintenance in a Specific Location
Some companies require you to have your truck serviced in specific locations. For instance, you may need to go to headquarters or to one of their terminals.
They may not want you or your friend down the street working on your truck because it could be a liability or a warranty requirement.
Ask where you need to have maintenance done and if you need to go to a specific location for preventative maintenance appointments.
You Might Not be Able to Modify Your Truck
Keep in mind that all companies are different with what they will and will not let you do in regards to truck modifications. Most companies will not allow you to modify the truck in such a way that it cannot be restored back to factory quality.
For instance, if you drill a hole in your cabinet or cut something out, they will have to replace the entire piece. Those pieces can be expensive and hard to get, so you will have that fee tacked onto your bill at the end of the lease term.
Read your contract or ask your leasing company what you can and can’t do to your truck.
Your Lease Contract Can Change
Some companies may change the terms of the lease while you’re under the lease. For instance, they may change the duration of the lease from one year to four or they’ll change cents per mile contributions.
Know ahead of time what they can and can’t change on you.
You Might Not Get Your Final Settlement Check
As long as you leave the company in good standing and with no outstanding balances (for instance, if you took out multiple advances on your checks), your final settlement check should be released to you.
Your check may be held from you if you have an outstanding shop bill that isn’t covered by your maintenance account or if you abandon the truck.
You Might Need to Find Your Way Home
What happens when you return your truck to its authorized location? Will the leasing company help get you home?
Ask.
Some companies will get you a bus ticket to get you home; they won’t send you on your way without a ride.
Finding the Best Company to Lease With
When you attend truck driver orientation with your new carrier, they should cover all of the information I’ve discussed so far. If not, it’s your job to take initiative and ask those questions before you sign the lease agreement. Advocate for yourself.
Don’t leave anything up to question. Even if your question seems dumb, ask it. Look at good and bad reviews of the company. Talk to drivers that lease with that company and see if what you’re being told matches what their experience has been.
If you start leasing at a new company without taking the time to find out what you’re getting into, you may find yourself scorned.
As a leasing manager, it’s my job to help you make the right leasing decision for you. When you’re making your decisions about leasing, you’ll also have further questions about the best companies to lease from and whether you should lease new or old equipment.
We’ve put together a list of the best companies to lease from to make the decision a little easier for you.