Article

Which Drivers Make Good Lease-Purchase Candidates?

Many fleets recruiting owner-operators are having a hard time finding enough qualified applicants -- so are turning to grow-your-own tactics with lease-purchase programs.

July 2013, TruckingInfo.com - WebXclusive

by Jim Park, Equipment Editor - Also by this author

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Many fleets recruiting owner-operators are having a hard time finding enough qualified applicants -- so are turning to grow-your-own tactics with lease-purchase programs. (Read more about such programs in the July issue of HDT.)

But who qualifies as a good prospective lease-purchase candidate? If you said anyone who can fog up a mirror, you're out of touch. While capacity is important, the DOT's new CSA enforcement regime and ever-nosier agencies like the IRS make it clear that you simply can't take people that need to be led by the hand into a lease-purchase program. The oversight required to keep them on track would bear a dangerous resemblance to an employer-employee relationship.

Scheider National, for example, maintains that separation through a company called Schneider Finance Inc. It's operated at arm's length from the carrier. Grailing Jones, the small business owner-operator development manager at SFI, calls the program the Schneider Career Path Option.

"We don't recruit and we don't draft people into the program," he says. "We offer it as an option – like the name says – to people with ambitions of starting a small business with a future."

Most of the clients are referrals, Jones says, but the program accepts clients from several streams. Former military drivers, CDL school graduates, current Schneider National company drivers and literally walk-ins. Depending on the individual, Jones is looking for six months to a year's experience as a company driver, or previous owner-operator experience.

"It's not something we offer to everyone," he says. "The individual has to have the desire and then explain to us why they want to be an owner before we'll consider them. We're not being elitist; it's our money. If we're going to take a risk, we're going to do it on our terms."

Jones says it's important that the client fits the company and vice versa. They usually insist on a minimum six-month period for each party to get comfortable with each other – a familiarization period and on-the-job training rolled into one.

"That gives us time to look at them and them to look at us," he says. "We're not in this to make money from leasing trucks; we're in this to provide capacity. The last thing we want to do is waste our company assets on an individual who is not sure."

Both Grailing and David Strand, president of Wholesale Truck & Finance, say one of the traditional barriers to truck ownership, credit scores, isn't critically important, but it is considered.

"We look at what the whole person is about," Strand says. "I can think of a dozen reasons why good people get stuck with bad credit. As long they are not in open bankruptcy, and they don't owe back child support, we'll look at them." 

What Strand wants to see is some personal commitment – a $4,000 down payment. When they have some skin in the game, they tend to take ownership more seriously, he says.

"We often have carriers asking if they can make the down payment for the driver, but my very simple answer is it doesn't work. We will take $2,000 from the sign-on bonus, but the driver has to have at least $2,000 of his or her own money in the deal."

Strand also looks at employment history. He won't look at anyone with more than two jobs in the past three years. "We want to see some evidence that they've tried to work with carriers rather than just bailing at the first sign of trouble or anytime the grass starts looking greener somewhere else."

Comments

  1. 1. Bob [ July 09, 2013 @ 07:23PM ]

    Does anyone remember Midwestern Distribution, (Fort Scott, KS) Why for only dollar you too can be an owner-operator !!! The guys pushing these programs are used car salesmen. Pay drivers for "all" the time they are at work and the retention problem will disappear. The industry should quit giving shippers and receivers free time. Lease Purchase programs are giving false hope to drivers who need substance, not gimmicks.

  2. 2. Beau Carlisle [ July 09, 2013 @ 08:56PM ]

    If you want an inside look at Schneider National/Schneider Finance, visit my site to learn about opportunities available:
    http://www.beaucarlisle.net/transportation-jobs.html
    Please fill out the contact form & i'll be in touch within 24-48 hours.

  3. 3. Jody [ July 13, 2013 @ 11:45AM ]

    A person needs to talk to some of those that did, or got involved in a lease-purchase and see how many really expect to own the leased truck. I have heard horror stories about Schneider's deals. This new concept of leasing to drivers has nothing to do with helping a driver. Is it really in the best interest of a company to have a driver pay-off the truck and then have the option to go wherever they so choose with the truck? The whole gimmick is to push lease-purchase onto drivers so they are obligated to run hard for the company and must be committed to them-its like they now own you even more after a few months into the purchase. Lastly, if you ever do consider a lease purchase, spend a few hundred dollars to have your lawyer go over the contract and find anything that may mean problems down-the-road for you. Remember, these companies are not your friends!

  4. 4. Denny [ January 12, 2014 @ 04:33PM ]

    YES I remember Midwestern Dist.Inc. Po Box 189 Ft Scott KS 66701 DRIVERS, Own a new truck like this one call 1-800-835-0581

  5. 5. Denny [ January 12, 2014 @ 04:49PM ]

    Me again,I forgot 400 National Ave on my last post,B and D motors I believe did the maintenance work, "Nothing like a shiney,tiney,290. " Midwestern Dist also had a wedge division, Maxcines Bar was up the road a block er two. Beer n soda bop only!!!,

  6. 6. john [ February 13, 2014 @ 03:36PM ]

    thanks denny, i forgot the name of that little bar. ran for them back in 1977 ,21 years old young and dum but alot of good timesin fort scott.

  7. 7. jimmy nelson [ February 19, 2014 @ 03:22AM ]

    I use to drive for Midwestern Express and trained a lady named Kristine and shed was from south bend Indiana but I cant remember her her name and I know this is a long shot but any info would be appreciated

  8. 8. Bryan Hugo [ April 10, 2014 @ 05:21PM ]

    Hay Bob, I started with Midwestern Dist. out of Ft. Scott,Ka in 1974. I used my GI Bill to go to Ryder Truck Driving school in Fresno,Ca and Midwestern was recruting out of of there. Drove my @$$ off as second driver, then he OKed me to get my own truck for a buck. Then they ran us all over with lay overs ect. If you were thier favorite, you got great runs, and home time. if not you sat all weekend waiting and then got short runs and dead head returns, and rare time home.

  9. 9. Gerald [ June 15, 2014 @ 11:27AM ]

    I went to work for Midwestern in the early 80's getting 6 cents a mile as a co-driver. The driving school was about 10 days total. A total nightmare with a dumpy truck.

 

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