Owner Operator Best Practices Series: Lease Purchase Programs | Breaking Up is Hard To Do
Event Date: October 31, 2017
Author: Ben Droessler
This 3 part series is for trucking companies offering, or considering offering equipment leasing programs for owner operators. As trucks become more expensive and owner operators have difficulty buying a truck on their own, lease purchase programs are a great way to attract owner operators.
Part 1: The Basics
Part 2: Physical Damage – Costly Mistakes
Part 3: Breaking Up is Hard To Do
Give careful consideration to exit strategy for your equipment leases to save frustration and expensive legal battles with disgruntled lessees. Two of the most common tripping points are:
Truck condition: Trucks will likely have damage when leases term. Damage might be normal wear and tear, or more significant damage from an accident. Inspect the truck prior to releasing the lessee from the lease to ensure a claim can be filed against the lessee’s physical damage policy. Hold a security deposit to cover other expenses related to reconditioning the truck per the terms of the lease (tires, mechanical repairs, etc).
Take it or leave it: If the lessee wishes to leave your motor carrier, but continue to lease the truck from your leasing company, let them! Certain states penalize motor carriers with “lease back” arrangements where trucks can only be leased to lessees running for the related motor carrier. Giving the lessee the ability to “take it or leave it” reinforces your leasing company is independent of your motor carrier. You can require the new motor carrier deduct and guarantee lease payment from the lessee’s settlement.
Take action! A portion of Cottingham & Butler’s Owner Operator Scorecard evaluates lease purchase programs. It’s free, confidential and results are instantly emailed to you. Complete Independent Contractor Risk Scorecard.
Contact Ben Droessler with Cottingham & Butler’s Contractor Services Team.
Ben Droessler CIC
Vice President, Independent Contractor Risk