Financing a Truck and My Experience

[Longshot]

A little over a month ago a family member (CDL) came to me needing some help.
The short of it was that he had engaged in a lease on a 2011 Freightshaker with a lease payment of $700+ per week (WOW! per week? is that possible?) and he wasn't making any money - the rate paid by his carrier - .90 per mile.
I asked for a copy of his most recent weekly carrier statement - upon reviewing I almost threw up all over myself.
By the time lease payment, fuel, insurance, escrow (to cover the carrier's insurance deductible in the event of an accident), elog rental, yadda yadda was taken out there was obviously nothing left.
Wait, why was the carrier paying the lease payment "EACH WEEK" $710? I called the leasing company and told them I wanted to renegotiate the lease - NOT A CHANCE. I told them my relative was leaving the carrier. Their response "he can't leave the carrier and keep the truck". HUH? What? If the lease is in his name then he should be a free agent right? NO!
The leasing company told me the carrier acts like a credit booster and additionally they have many drivers with leases at that carrier and they did not want to jeopardize their relationships with the carrier. At that point I smelled and industry wide scam going on with carriers and leasing companies colluding to rip off drivers.

My discovery was that there are some really really bad people out there and I concur with Rawze book completely - I do not know how they sleep at night.
I also found out that the reason for engaging in the horrific lease to begin with was because his previous lease had broken down and he did not have the $26K needed for the repair so he walked away from the truck and of course that negatively affected his credit.

That is when I decided to try and help and the only solution I could find was to buy a truck myself. BUT I wanted to do it right if I could figure out a way to do that.
I had some money I was willing to put down +- $6000.
I needed financing so I went searching for commercial truck financing and mostly the traditional ripoff artists - appalling. Most would only finance if you have a CDL for at least 2 years, I do not have a CDL, or have been an owner operator for 2 years, I also have not been and owner operator before. I have good credit and some money and they would not lend to me - WHAT? When I inquired why they would not lend to me I discovered the not so secret, very disturbing industry wide scam - quote "we lease to drivers directly who have poor credit or no credit or little driving history - that is our model and that is why we make high double digit interest rates". Some had interest rates higher that 50%. So I went to my local home town bank, the guys who lent me the money to buy my house, the mortgage I have already paid off. They know me and I know them. They have never loaned money for a big rig before. When I asked for a loan their response was "go pick out a truck". I agreed to put down $5000 and they agreed to lend me the $35000 for a total of $40k truck purchase (my budget) @ 7.25% interest - that's right 7.25%. When one of the rip off leasing companies called me back and I told them to piss off and that I already borrowed the money at automobile finance rates they literally threatened me and told me that if I borrowed money in that way that I was in violation of DOT laws. Really? So the DOT is now regulating how I borrow money for a truck?
I doubt it, but that is what they claimed and they said it in a very threatening kind of way.

Did I do it right? Well as truck financing goes I think I probably did quite well, but I have circumstances that are likely different from most drivers going the owner operator lease route.

As a result of this experience and my discoveries I will start a new business specifically targeted at helping drivers acquire a vehicle in a financially responsible way including buying a vehicle with a warranty so that they have some protection from catastrophic repair costs. It would also be nice to include some income replacement when the truck is out of service for more than 2 weeks. This also implies operating in a way that builds reserve that can be used for repairs, maintenance, and even low rolling resistance tires and other types efficient operating strategies discussed here on the AWESOME Rawze forum.

I have another post chronicling our first vehicle purchase - it is not without mistakes and bumps in the road so check it out if you want to see a real life startup from someone with no trucking experience.
Longshot