Bottom Line
Smart Business
Thanks, but no thanks
Keeping your carrier from taking control of your paycheck through some of its 'benefits'

By Donna Ryun
Manager of OOIDA's Communications Group

You finally did it. After months of painstaking research and careful planning, you bought yourself a truck. You have the right to decide what you want to accomplish with that truck.

Now, it’s up to you to determine the best way to reach your goals. You are your own boss, and at last, you’re in control.

You’ve decided to get your feet wet by leasing on to a company for a while before becoming completely independent with your own operating authority, and you’ve checked out several motor carriers in your search for the best lease agreement.

It’s down to two companies now. Both are quite reputable; however, you’re leaning toward one because it offers a few more “benefits” that make it very convenient for you as a new business owner. Hmmm, decisions, decisions.

Let’s take a look at the benefits that are offered by the carrier that you currently favor. Who will actually “benefit” the most if this is the company you choose, you or the carrier?

“Benefit” No. 1:
The company gets your license plates for you. They know you’re a little strapped for cash because you just bought a truck, so they’ll purchase the plates and let you pay them back by deducting so much a week from your settlement checks. They’ll take care of all the paperwork, so that’s one less worry for you, right?

Not necessarily.

What if the company goes broke, or what if they decide to terminate your lease after you’ve paid for those plates through deductions from your settlement checks?

By rights, you should get a prorated refund when the carrier turns in the plates or transfers them to another unit. But what if they just toss them in a drawer and forget about them? In that case, you get no refund, and you have no plates.

Maybe this so-called benefit isn’t what it was cracked up to be. If you obtain your own base plates, you’ll be able to take them with you when you move on to another company.

“Benefit” No. 2:
The company takes care of your fuel taxes for you by deducting either a flat rate or a percentage from your settlement checks. This sounds like a great convenience. What could go wrong with this “benefit”?

What if you overpay and you’re entitled to a refund? Will the company fork over the money, or are you in for a fight to get it?

This “benefit” doesn’t seem so special when you end up paying extra for fuel taxes and never see the refund that you’re entitled to for an overpayment. Maybe it’s best to bypass the carrier and take care of your own fuel taxes.

“Benefit” No. 3:
The company obtains your physical damage, bobtail, unladen liability, or non-trucking liability insurance for you and deducts the premiums from your settlement checks. No fuss, no muss on your part, right?

Think again.

If you decide to leave your motor carrier, you will have to obtain new insurance coverage. What if your motor carrier fails to make a premium payment? Do you receive any notice if your insurance is canceled? Can you talk to a licensed agent about your coverages, or do you have to communicate through a third party who may not have your best interests at heart? Will the carrier provide you with a copy of the policy as required by the federal leasing regulations?

Some carriers have been known to pocket the premium money they deduct from drivers’ settlements in order to cover the rather high deductible on their company insurance. Then if an accident occurs, they use that pool of money to pay for the loss and avoid turning in a claim that could blemish their record and cause their insurance rates to go up.

If you don’t have a policy with your name and a description of your equipment on it, you have no guarantee that your claim will be paid. It’s definitely best to beware of this company “benefit.”

“Benefit” No. 4:
The company will give you advances for fuel and charge them against your escrow account.

This sounds good on the surface, but keep in mind that the carrier will likely deduct an administrative fee for any money advanced to you. Your escrow fund is actually money that you’ve paid into an account that is controlled by the carrier, so you end up paying to use your own money.

In addition, when the carrier calculates the balance of your escrow fund to figure how much interest is owed to the account, they can deduct a sum equal to the average advance made to you, which will reduce the amount of interest they have to pay.

Sounds like a great “benefit” – for the carrier, that is.

Once you really think it through, this carrier’s “benefits” quickly become less attractive, considering that the trade-off means giving away some of the control that you gained when you bought a truck and became your own boss. Where’s the real “benefit” to you in that?

It can be tough going financially when you’re first starting out with a business of your own.

owever, it’s always best to keep the carrier out of your paycheck as much as possible to avoid losing your hard-earned money for the temporary convenience of a payday loan.

You should just say, “thanks, but no thanks” when you’re tempted to allow a carrier to take control of your paycheck through some of the so-called benefits it offers. In the end, if you make careful decisions and exercise your authority in the operation of your business, you are the one who gains.

If you have questions about doing business as an owner-operator and/or an independent trucker, please e-mail them to or send them to PO Box 1000, Grain Valley, MO 64029. We can’t publish all of your questions in Land Line, but you will receive a response, even if your letter is not published.