Previously in this two-part series: Early career missteps lead to current small fleet success for Hallahan Transport
Given early-career experience with spending money on the wrong things as an owner-operator, Hallahan Transport owner Robert Hallahan structured a lease-purchase program within his fleet to try to help drivers in the program learn money management, so they can always have that nest egg for unforeseen repairs and other issues when they arise.
“It’s not one of the ‘You pay me three times what the truck’s worth’ programs,” Hallahan said. “I go out and buy the truck," using his good-credit backbone for favorable terms. Or the unit might be "a truck I already have and somebody wants to learn how to be an owner-operator or become an owner-operator for the first time.”
Hallahan will give the driver an offer to buy the truck, and then in the case of a new unit that driver will just make Hallahan’s payments on the truck. As part of the program, the operator chooses what they want their take-home to be, and the rest of their paycheck goes into an escrow account.
“If a guy says he wants to make $1,000 a week, he’ll make a $1,000 paycheck every week, guaranteed, and all his other money goes into his escrow account,” Hallahan said. “And when he has a breakdown or just needs a tire, all he does is use his escrow money and pays for it. When his toll bills come in, plates, he uses his escrow money. That way he can understand that that money has to be in an escrow or he has to save that money to be able to pay for things down the road.”
Then, Hallahan added, if the escrow money gets high enough that the driver could take it to a bank to get a loan to buy the truck, Hallahan will simply sell the truck for the remainder of the balance. Since starting the program, he's had two operators successfully complete it. One driver completed it in just six months, then in another six months had the truck paid off, then traded it for a newer truck.
“It actually works out really well," he said, "because, I know when I started, I thought, ‘Wow, I’m getting these big paychecks, we can go out and buy a boat, buy a car.’ Then my truck broke down and we didn’t have the money to fix the truck. It’s just little things at first, then next thing you know, you have a clutch or a transmission or a turbo [go out]. That’s why I do it.”