Lease purchase programs have become incredibly popular for truck drivers, and for good reason. This type of agreement blends the advantages of leasing with the option to purchase the truck at a later time. Lease purchases are particularly attractive to rookie truck drivers, who may not have the capital or the credit rating to purchase a truck up front. Here is a look at how lease purchase programs work, along with an overview of some of the best lease purchase trucking companies in the United States.
What are Lease Purchase Programs?
A lease purchase program allows you to rent a truck for a specified period of time, which is typically two to four years. At the end of the lease period, you can either return the truck or purchase it for the price and sales terms that were spelled out in the original lease purchase agreement.
A lease purchase program can lower both your upfront costs and the monthly payments you will owe when you purchase the vehicle. Additionally, the residual value of the truck is determined at the beginning of the contract, not at the time you are ready to buy. For these reasons, a lease purchase can be an excellent choice. Still, it is important to understand exactly what you are signing. Always read the full contract carefully, and ask a lawyer if you have any questions. In general, though, here are some things you should know.
Types of Lease Purchase Programs
The lease portion of your agreement may be a capital lease or an operating lease. Both have their own advantages and disadvantages. A capital lease is treated as an asset, and it must be listed as such at tax time. However, because it is an asset, you may be able to claim depreciation on it.
An operating lease is not considered an asset. All advantages and disadvantages of ownership rest solely with the company that leased you the truck. However, you may be able to claim the rent you pay as an operating expense.
Note that both types of leases can dramatically affect your taxes, so it is important to speak to your tax advisor before making a decision.
How to Purchase the Truck
At the end of the lease, you will have the option to purchase the truck or return it to the company. If you choose to purchase it, you will have the purchase price and terms in the original agreement to refer back to. However, it is always worth making a slightly lower offer. Depending on the policies and current inventory of the trucking company, you might be able to save some additional money. Note that the company is not likely to accept a much lower offer, but any savings is better than none.
Choosing a Lease Purchase Program
The best lease purchase programs deal in high volume. They typically have a set value for the truck at the beginning of the lease and clear, easy to understand policies. Look for a truck with a high residual value, generous mileage restrictions (or none at all), and no charges to you for wear and tear. Beyond that, figure out what is important to you. Do you want to paint the truck? Put decals on it? Install additional equipment? Some lease purchase programs let you do these things, while others do not. Of course, once you buy the truck, you can do whatever you like. During the lease period, though, you must honor the policies of the trucking company.
Top Lease Purchase Trucking Companies
While the decision of which lease purchase trucking company to go with is highly personal, here are our picks for the Top 8 lease purchase trucking companies in the United States:
Swift Transportation: With offices in 42 states plus the District of Columbia, Swift Transportation is local to the majority of drivers in the United States. It also boasts one of the biggest fleets in the business, with 16,000 trucks and 60,000 trailers. The company is known for its high-tech equipment as well as its commitment to backing its lease purchase drivers.
Schneider: In the trucking business since 1935, Schneider has grown into a full scale transportation and logistics company. With offices in 44 states and a variety of truck types, Schneider is a go-to choice for a lease purchase agreement.
JB Hunt: JB Hunt is one of the biggest names in the trucking industry, and for good reason. The company has more than 50 years of experience in trucking, and is known for its dedication to its’ drivers work-life balance. JB Hunt strives to help its drivers settle into a stable and rewarding career.
USA Truck: With more than 30 years’ experience throughout the continental United States, Canada, and Mexico, USA Truck is known for its passion for its drivers. A thoroughly modern fleet and the opportunity to speak directly with the company’s executives make USA Truck an excellent choice.
CRST Expedited: With more than 50 years in the trucking industry, CRST has customer service for its drivers down to a fine art. The company is actively recruiting lease purchase drivers with a bevy of benefits, including a no credit check, no money down program, massive fuel discounts, guaranteed home time, and even the opportunity to hire a co-driver from their fleet.
Covenant Transport: Covenant Transport trucks feature a variety of conveniences, including your choice of a manual or automatic transmission. The company is aggressively recruiting driving teams with a $40,000 signing bonus, and single drivers can go through Covenant’s matching program to find a suitable partner. HazMat drivers are also in high demand. If you are looking for a nationally known company that takes care of its drivers, Covenant Transport is a terrific choice.
Southern Refrigerated Transport: Southern Refrigerated Transport keeps giving out raises, making their pay among the best in the industry. What they are really known for, though, is their impressive Texarkana headquarters, filled with amenities of every description for their drivers. From free laundry facilities to a brand new fitness center to a maintenance shop with 32 bays, Southern Refrigerated Transport is working hard to anticipate and fulfill its drivers’ needs.
If you are in the market for a truck driving job or lease purchase agreement, CDLjobs.com is your one-stop resource. Simply apply today, and watch the offers roll in from trusted trucking companies around the country.