Is leasing a realistic option?

right, decided i’m going to give this artic job a go,talked to a couple of firms who offer a minimum milage contract type deal and i think at least to start with,thats the way i’m going to go. as far as a wagon goes i’ve probably three options, chop the rigid in and put a couple or three grand to,which would get me a 10/11grand unit but leave me very skint,chop rigid in and take a lump of finance out for a newer truck,leaving me with a reasonably low weekly payment but again not a lot in the bank for the first month or so of no money coming in,or i can lease a simular truck to that i’d buy outright for something like £80 a week,thats just a straight lease deal over three years with no maitanence,shorter terms available with a bigger weekly payment etc.
question is,are older wagons actually worth leasing or would i be putting a noose round my own neck? the same wagon with full r&m is £170 a week which to me says “we’ll lease you this wagon which is spot on but it’s gona cost £90 a week to maintain it”. no thanks.
these examples are from just one firm,if anyone knows of better deals or can recomend someone i’d appreciate it.
thanks
paul

We have R&M on 2 of our trucks, and when mine is replaced in the next couple of months that will go on to it as well.

The boss loves it, he knows what is going out each month, remember that it covers your 6 weekly inspections as well, and ours does the mot as well.

IMHO it really comes down to what your comfortable with, and how well you trust the dealer that is covering the R&M. Ours is with the bosses local Volvo dealer, but I wouldn’t trust the dealer near me at all ( had 2 bad services with them recently, staff couldn’t give a toss, too many jobs not done)

I’m on my third lease truck at the moment, I lease them for three years at a time, and will get another in December when this one goes back. I like it in that the monthly payment covers everything except insurance, fuel and tyres. Not nasty repair bills and It covers me for Euro wide breakdown as well. Very easy to keep control of your costs and the full monthly payment is tax deductable which isn’t the case when you buy as you are into the area of depreciation then.

Neil,

How will you go about moving your ‘MAUT’ kit over to the next truck?

Ref Pauls original post:

I’d got the feeling from other posts, when this subject was brought up before, that starting with an older truck you could buy outright was the better option.

I must admit, I always thought the idea of knowing your overheads at the plannng stage (i.e. lease or contract hire, R&M etc) was the ‘safer’ option even if it curbed your chances of ‘making a million’ in the first year or two!! :wink:

Paul, how old is the other truck you’ve looked at? I guess you’ve got to decide if the extra £90 per week is cost effective ‘insurance’ against having to fork out for a new engine etc!!

I’ll need to take this vehicle to a service partner and have the box removed in the last week that I have it and then take the new vehicle and have either it refitted, after the details stored in it have been changed. or have a new one fitted the first week I have the new truck.

Hopefully by November/December there will be service partners in the UK which would make it easier but if not I’ll have it done in Germany again. It will cost me for the deinstallation/installation.

basicaly the different options are all based on the same wagon,in this instance a 99 ec11 which as above i can lease for three years @ £79 per week or with the full monty £170 per week alternitavely i could buy a simular wagon for 9 to10 grand outright. the basic lease works out @ £12,324 over three years or for the full job £26,520 :open_mouth:
thats a hell of a lot of money to maintain the wagon.
to be honest the more i look into it the more it becomes obviouse that you have to do a fair bit more than the gauranteed mileage of 1500 a week to actually make the job pay!
this is how it stacks up,
earnings based on 1500 mile per week @ £1.08 per mile based on 48 weeks = £77,760
less-
fuel @ 7mpg = £34,632

insurance = £5300
parking/operaters center = £1,040
lease with full r&m = £8,840
trailer rental £5,720
total £55,532
giving a balance of £22,228 less tyres,fuel used when not earning ie back to yard fridays etc,phone,over night parking etc
based on the above you’d be lucky to clear £20,000 before tax!
so in reality you’d need to be doing 1700 mile a week minimum to get any where near making it pay.when you consider that drivers working directly for the same company are taking home £450+ a week with paid hols etc it’s not hard to see why the firms so keen to take on subbies.

…and so have you just answered your own questions, Paul??

Are you still keen to do it or do you just need to find a different contract??

I suppose taking away the R&M costs (£8,840) makes the figures look a bit better but then you’d have to buy a truck outright for, maybe, less money; can you find a reliable enough vehicle?

well the thing is this,this contract,by all accounts is about the going rate so how are all the subbies already on, making it pay?
they’re either doing alot more than 1500 mile a week or have the job set up far more profitably than above.

ERF encore finance figures :question: EC11 380hp :question: A bit down on “poke” for 44t work :confused:
Hanbury Davies traction figures :question:
:bulb: PM “North Surrey Haulage” I think he’s averaging around the 1800/2000 miles/week with HD,so your figures should look better with this mileage and you should be able to rent your skelly cheaper.

paul b:
well the thing is this,this contract,by all accounts is about the going rate so how are all the subbies already on, making it pay?
they’re either doing alot more than 1500 mile a week or have the job set up far more profitably than above.

You could always ask them how many miles they get on average per week to find out. I would guess they’re doing a lot more than 1500 as they’re unlikely to offer you a minimum of 1500 unless you’re doing at least that most weeks or it would be a financial disaster for them paying all the subbies for mileage that they’re not doing. If you assume an average of 2000/week you’re looking at 103680 quid per year, and the only other cost that will increase that you have mentioned is the fuel so you would then using your numbers have:

103680 income
46176 fuel (assuming 7mpg and 74ppl+VAT as you did)
20900 for insurance, unit lease, parking and trailer rental (assuming these all stay the same regardless of mileage)

That gives you a balance of 36604 before all the same things you had last time, which is more than 14 grand more and starting to sound like a reasonable proposition. Of course the extra mileage will cost you more in tyres as well so you have to consider that.

This is surely the only way they canb make any money (unless they’re all running around in old units without R&M and getting lucky with breakdowns).

Paul

Big Truck:
you should be able to rent your skelly cheaper.

How much would it cost to actually buy a second hand skelly? If you’re paying over 5 grand a year rental there’s possibly money to be saved here too.

Paul

big truck, you assume correctly on both counts :open_mouth: i’ve tried to pm n.s.h but for some reason it won’t send the message and it’s still sat in my out box,anyway moving on,certainly if you can do 2000 miles aweek it alters the figures dramaticaly and does actually make it an attractive proposition,just wonder how things pan out if work slackens off would i as the new boy be left with the minmum milage whilst others who’ve been on a couple years get looked after?
yes,i’m sure i could rent a trailer cheaper or indeed buy one as for the ec11 just used it as an example,what do you think would be ideal for the job?
still sounding the job out really don’t know if boxes is the way to go,HD are also offering traction only pulling their trailers at a slightly lower rate, if i could work out of dony which is just up the road then that might be the better bet,we will see.
thanks for the replys boys and a happy new year to all
paul

paul b:
HD are also offering traction only pulling their trailers at a slightly lower rate, if i could work out of dony which is just up the road then that might be the better bet,we will see.

How much less for traction only? Doing the maths, at 5720/year for trailer hire, the cost per mile works out as follows:

1500miles/week = 7.9p per mile
1750 miles/week = 6.8p per mile
2000 miles/week = 6.0p per mile

So assuming the minimum mileage every week, it needs to be more than a quid a mile to make traction only cost effective. If you manage to do 2000 miles a week then they need to pay 1.02 or better. If they don’t you would be better off paying the trailer hire and taking the higher mileage rate.

Paul

the traction only rate £1.04@41t , £1.05 @ 44t so theres not much in it.

paul b:
big truck, you assume correctly on both counts :open_mouth: i’ve tried to pm n.s.h but for some reason it won’t send the message and it’s still sat in my out box,

Paul, that means the message has been sent but it will sit in your outbox until NSH logs in next time and gets his PMs. The fact it is in your outbox still just means he hasn’t logged on since you sent it.

paul b:
the traction only rate £1.04@41t , £1.05 @ 44t so theres not much in it.

You have to do almost 3000 miles a week before the 4p per mile less you get works out to more than 5720/year (based on a 48 week year), so traction only would seem to make sense then really unless you can get yourself a trailer second hand dirt cheap or find a lease one for under 3k/year.

Paul

all becomes clear :blush:
thanks mate.

Paul b,

Maybe it’s times like these that my signature makes most sense!!

Paul b,
I have plenty of good info about pulling for HD when I was considering it from NSH in my PM’s but I can’t get it sent onto you :imp:
I think they dish out the work fairly and you’ll find that because of WTD the subbies are getting most of the distance work and the company drivers are staying closer to the depot.
As for the truck,an ERF with a LX/Olympic cab (for tramping) will do the job for a new start but the 380 ■■■■■■■ might need a “jig” for 44t much better to look for rarer one with the 440 ■■■■■■■■■■ go for one the same as yours truly a Foden Alpha XL cab 440 ■■■■■■■■■■■■■■■ plenty about at sensible money. :smiley: :wink:

sorry got things wrong a bit,the better rate is working on the container side,you can hire a skelly off the firm for £110 a week,the lower rates are for running out of one of their distribution centers where you need a curtain sider which you can hire at £85 per week or alternatively buy or rent either trailer your self.
i’d not looked at the details for awhile :blush: