Does this include the big companies as well? you would think they wouldn't like the idea of an unknown number at the end of the lease, that number being what you mention above. Am I missing something? Perhaps the big companies negotiate a zero payment at the end of lease maybe?

 

Like I said, many of the large companies actually own the trucks through a subsidiary. Most of the others negotiate a guaranteed buy-back value at the end of the lease, which I imagine just happens to coincide with the residual value :roll:

Truthfully, anybody should be able to negotiate a similar deal. You might end up paying a little more than you otherwise would, but it can be worth is if your goal is 100% accuracy in forecasting your equipment costs. There would be no uncertainty related to the truck market.

The balance sheet implications should be inconsequential, unless you're upside down in the loan. After all, even though the loan is a liability the vehicle is an asset. In most cases it's a wash on the balance sheet. Although anymore I suppose that plenty of folks are upside down.

 

no_worries, could you post an example of one of the bigger companies and their subsidiary? I think it will be easier for me to understand this if I actually looked into the companies.

Thanks

 

When I worked for Schneider, Schneider Leasing actually bought the trucks then leased them to Schneider National Carriers. All the paperwork showed SNC as the lessee and Schneider Leasing as the owner. That's why, when you look in the Truck Paper, you see Schneider actually selling their own old trucks. Same with Werner, I want to say their company is Highway Truck Sales, but I can't remember for sure. They've got a yard right next to Werner HQ in Omaha and I know I've seen an office in Portland. Wait, I'm wrong. Highway Sales is Dart's affiliate. I can't remember the name or Werner's outfit.

Other companies obviously go the standard leasing route. You'll see Arrow Truck, for instance, getting in "huge fleet trade-ins" several times a year. Always red Volvos. I'm pretty sure they're U.S. Xpress trucks. Arrow, of course, is owned by Volvo N.A. You'll see a lot of Maverick's trucks on the Selectruck lots, along with a ton of others :roll: :lol:

 

Werner's is Fleet Truck Sale, I think they got others in Texas and North Carolina and other states where Werner has a yard I think. I don't remember

 

You could call it anything you like, but that interest is a 100% tax deductible!