CAN I MAKE MORE MONEY BY LEASING A TRUCK?

 This question finds its way into most new truck driver’s minds at one point or another. It's no wonder why it does. We work hard at this job. We make considerable sacrifices unheard of in most careers. When it comes to rookies just getting started, many of us seem a little disappointed with our pay. This lifestyle of being alone most of the time tends to limit our conversation to that of other truck drivers. We may end up parked at a terminal for a few days and hear our fellow road warriors complaining about their situation, or in some cases telling us how they have figured out some super secret way to beat the odds at trucking. That is typically when we hear these outlandish claims of making big money. I have actually heard guys claiming to make as much as eight thousand dollars per week!

Now that will get your attention! You just got a paycheck for $1,200.00. Here’s a guy, not particularly appearing as anything special, yet he just got a paycheck for $8,000.00. There’s something wrong with this picture! Yes there certainly is, so let’s talk a little about what is actually wrong. Hopefully I can help you out.

Lease operators don’t actually get a paycheck. That’s right. They are not even on the payroll of the company. Anybody leasing a truck who tells you how much his paycheck came to is “looney tunes.” The company never cuts him a paycheck. That is a very important fact for you to realize. A lease operator is a contractor. They get paid a contract price on each load. They do not receive a paycheck.

So, what are these big fat checks we hear about? You have to realize the propensity of these new lease operators to be unrealistically enamored with their new found way of making money. At first everything seems all shiny and new, much like a freshly minted penny. They have yet to get into the real give and take of the business. The checks they get are revenue checks. Their lease lays out all the parameters of how they get paid. It spells out their responsibilities and how they will be compensated. They are responsible for the expenses of running and maintaining the truck. It usually takes less than a year before those expenses take the shine off that new penny.

All that big money they brag about is to cover their expenses. They are now running a one truck operation. The dollars coming in to a lease operator are simply their share of the revenues they produce with the truck. It’s not even closely related to a paycheck. That’s how I knew the guy who foolishly thought I would believe he was making eight thousand dollars a week had no clue about what he was doing. Any driver claiming he is making that kind of money is not only lying to you, but sadly they are also lying to themselves.

The whole reason trucking companies lease their trucks is because it is profitable. In fact it is often more profitable than a company truck with a paid employee in the driver’s seat. So think about that for a minute. How does the driver make more money when it is likely the company is turning a better profit by leasing the truck to the driver? Can you conceive of any reason a business would encourage its employees to become private contractors just so they could pay them a lot more money? That goes against every common sense business principle there is. The whole ploy of leasing trucks to unsuspecting drivers is a gimmick. It's a way to lure people into a trap that seems to offer some really great bait. Those big numbers on those checks are the bait.

Businesses make decisions and choices to produce outcomes that are more profitable for them. Forcing the wildly unpredictable expense of running and maintaining their trucks onto private contractors gives them control over their costs. If they can control their expenses, they can accurately forecast their profits.  The lease operator sees some big checks coming his way, but he also has to maintain those big expenses he agreed to in his lease. Otherwise he won’t have a truck to run loads with. Those big checks are countered and consumed by big expenses. What’s left over becomes the driver’s pay.  He has no predictable paycheck and no employee benefits. Look at the things he gives up for this long shot chance of making a little extra money.

• No health insurance.

• No social security account being built up.

• No access to a company retirement account.

• No income tax payments withheld.

• No paid vacation.

• No seniority with load planners or dispatchers.

• No help with layover or breakdown pay.

• No bonus money that company drivers get.

Typically those things the driver gives up for this hope of getting ahead in the game far outweigh any difference he could possibly make by leasing the truck. I did a little calculation based on my last twelve months of driving as a company driver.  Here’s some real numbers that I would give up so I could lease a truck.

• $3,500 - that’s what the company contributed to my 401K

• $6,800 - that was the total of my bonus money

• $2,875 - that was my total extra pay for various things like layover

• $5,478 - that is my three weeks paid time off

Let’s see… that totals $18,653.00 and that doesn’t even take into account the lack of deposits in my social security account, or the funds they contributed toward my family’s health insurance. That’s how much I am going to throw into the trash just so I can risk taking a long shot at making maybe about 3% more by leasing a truck.  You can’t make that math work in your favor. Numbers don’t lie.

Most trucking companies operate near a 97% operating ratio. That means their profits are somewhere in the 3% - 5%  range. That’s not impressive, but it sure tells us something. It tells us by leasing the truck you only have a small percentage range you could increase your actual take home money. If there is only a 3% - 5% profit, then where do you think you are going to find all this extra money? I just did the math on my last twelve months pay. If I could make another five percent by leasing a truck I would increase my total pay by $4,750.00. Why in the world would I give up almost $20,000.00 so that I could get $4,750.00?  That makes no sense. That is what I call Owner/Operator math. It has never made sense to me.

In my situation as a competent company driver, I honestly think I would be cutting my pay by around $16,000.00 were I leasing a truck. I could be proud of the fact that I am “my own boss,” and I could run around bragging about the big checks I am getting. I have heard and seen these lease/operators strutting around like peacocks among common barnyard animals while mingling with the lowly company drivers. I just have to laugh inside. I know the truth.

I think the challenges of being a trucker really push people to try figuring out a better way to increase their income from this job. I empathize with each of you who thinks he is putting in more effort than expected. We’d all like to see more income when we consider the sacrifices we make. The problem with this is the way we fall prey to these foolish gimmicks. Leasing really is a gimmick.

You aren’t going to make more money by leasing a truck. It may feel good when you see several thousand dollars on a check, but you have to realize it’s not a paycheck. It’s basically a way to keep you pushing and trying to figure out how to make those big dollars actually end up in your wallet. There is that bait hanging right there in front of your face each week. Life would be really grand if you could just figure out how to keep the bait and not get caught in the trap!

Truckers are experts at keeping myths alive. This decades old myth that claims some trucking companies are out to squeeze every little drop of blood out of their company drivers, and then throw them under the bus, is still alive and well. It’s dead wrong, and goes against every business principle of success. Unfortunately every new driver entering the business is convinced of it from his internet research. This myth claiming we can make a lot more money by leasing a truck from one of these big trucking companies is just as bogus as it is ridiculous. The whole concept of leasing trucks to drivers was a profit driven incentive for the corporations who started this practice. Don't be bamboozled by such nonsense!