Avoiding the ‘never- never’ lease plan

by Bill Cameron

The never-never plan is a phrase that younger drivers won’t recognize; it’s not a term that gets much press anymore. When I started driving, it was a common phrase, and well named. The modern, politically correct term is ‘carrier lease purchase.’

There were numerous versions of what ‘never-never’ stood for. It was typically defined as combinations of any of the following, and likely dozens more: Never own the truck, never make money, never get home, never escape debt.

A couple decades ago, these plans seemed, almost always, to be nothing more than a scam, where the carrier increased profits by luring unsuspecting drivers into a company-sponsored truck purchase, one which usually resulted in financial failure and the carrier repossessing the partially paid truck.

These plans were rife with stories of drivers being pushed beyond their physical limits, hauling loads nobody wanted to undesirable locations, under threat of losing the truck if they refused. These drivers were usually the last dispatched during slow periods, in an effort to financially bleed them even further.

In the early nineties, I cautiously inquired to a well-known, reputable flatbed carrier about its lease-purchase plan. I was shocked at the brutal honesty from the recruiter.

“I don’t have any right now, but leave your number. We take them back all the time. I’ll have one for you soon.” Honestly, I can’t make this stuff up.

The term seems to be used considerably less in recent years, likely because manufacturer financing became so easy to obtain. I fear though, that with a continuing sluggish economy, this practice could regain its old name.

Lately, I’ve become aware of a lease purchase being offered which sounds suspiciously like it qualifies as a ‘never- never’ plan. The carrier offers new iron, company spec’, with no money down.

Current company drivers are encouraged to become owner/operators through this program, with the promise that if they default on payments in the first two years they may turn in the truck, and regain their company driver position, without penalty.  Isn’t that generous? With the notorious downtime associated with new trucks, the first two years are the critical time when new truck gremlins are eliminated, usually involving plenty of downtime.

This carrier is nearly guaranteed, like the never-never days, to take back most trucks, partially paid for, with most reliability issues cured, destroying the morale of their own people. I’ll never understand this attitude, which, like low driver pay, directs so much effort toward financially destroying the best front line staff.

Some trucking companies, bless them, have a fair, transparent lease purchase program, which benefits both parties. The driver gets a kick-start to no-money-down truck ownership, knowing they will be kept busy because in a fair program, the carrier doesn’t want to repossess the truck.

No-money-down can be very appealing, in an age where people are getting more financially responsible, and may be trying to rapidly pay a mortgage or put kids through school, so cash down payments are difficult at best.

I’ve heard of one carrier, who I wish I could name to give appropriate credit, that has created a program where your payments and a future repair fund are deducted as a percentage of revenue. If the wheels aren’t turning, you pay nothing. This carrier, a very big one, if you can imagine my praising a large carrier, obviously wants to grow their company in a mutually beneficial manner.

You may assume that with a company as small as mine, I’d know nothing about carrier lease purchasing. On the contrary, we’ve offered it, albeit with used equipment (which meant lower payments and usually only a one-year term) so I’ve seen how this can be either beneficial or disastrous to both parties.

One tractor purchase helped a highly skilled, efficient driver rebuild his damaged credit rating, while enjoying a reliable truck and a good job. A trailer purchase later wasn’t quite as successful; the driver left for another company at the term’s end, with no notice, and his final payment bounced.

We had to chase him to his new employer, a carrier we did business with.

The final transaction was a tractor for a driver that wasn’t nearly the operator he was initially thought to be. In the second month, after apparently rarely performing a pre-trip, and not noticing a previously stable truck steering strangely, he almost lost a front hub assembly after running it out of oil from an undetected leaking wheel seal, destroying a hub and spindle.

His belligerent attitude got the truck impounded at a repair shop which demanded advance payment before the repair was made. I paid out double his current lease payments in repairs, and drove 200 miles to retrieve my now filthy and smoke-filled truck. The key to properly entering or avoiding a lease purchase is the contract. We’re truck drivers, not lawyers, so the best money you can spend is having any contract – either employment or lease-purchase – reviewed by an accountant and/or lawyer, something that, strangely, almost nobody does.

Spending several hundred dollars to discover a pending financial disaster isn’t a waste, it’s an investment. Nobody will protect your financial future as well as you will. Please, both driver and carrier, do your due diligence, and avoid a ‘never-never’ nightmare.


Bill Cameron and his wife Nancy own and operate Parks Transportation, a small flatdeck trucking company. Bill can be reached at williamcameron.bc@gmail.com.

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  • The “ONLY” reason companies want lease ops is simply because the profit margin is much higher that a company owned truck with a company employed driver on it.

    It’s sad to say but so many people that fall for these leases are about as smart as a stick.