- July 16, 2024
- Posted by: Sergey Grushetskiy
- Category: Semi Truck Financing
If you are considering investing in a commercial truck, there is a good chance you have been trying to determine the best way to go about it. Do you lease the truck? Do you buy a commercial truck? What is the best option?
Both will lead you on the path to a commercial truck, but they do have a few different factors to consider.
This article explores the pros and cons of leasing vs. buying commercial trucks.
The Pros and Cons of Leasing Commercial Trucks
Leasing a commercial truck often sounds like the most ideal way to get your trucking business started, especially since there are no high upfront costs necessary. But, while it may be a great idea for some, leasing is not for everyone. There are perks and then there are drawbacks.
The Pros
When you lease a commercial truck, you don’t have to have a large sum of money and good credit. This makes it easy to go in and sign the paperwork — and walk out with your truck. You will know exactly how much your payment is as they will be set for the term of the lease.
Leasing also allows you to look at premium models of trucks and get all the bells and whistles you may be hoping for. This means having the latest technological advancements that will help to find and retain drivers if you are looking to run a fleet.
When it comes to your bottom line, you don’t have to worry about depreciation because you don’t own the truck, you are leasing it. And, the money you were going to use to make your purchase can now be used for something else in boosting your business.
The Cons
There is no denying that the pros of leasing do sound pretty good. However, there are a few downfalls to choosing this method of getting a commercial truck.
Many lease terms come with restrictions and you will want to read the fine print carefully. Should you ever need to break your lease, it could cost you big time. Although you may not see any reason that you would need to do so right now, nobody knows what the future holds.
What’s more, the money you are putting into your investment isn’t going toward anything that will build value in your company. Rather it is paying to lease the commercial truck that will be returned at the end of the term, leaving you with nothing to show for the expense.
The Pros and Cons of Buying Commercial Trucks
Buying a commercial truck is often a goal for many drivers and fleet operators. But, that doesn’t mean it doesn’t have its own set of pros and cons, too.
The Pros
When you own your commercial truck, it becomes an asset to the company, helping you to build equity over time. And once it is completely paid for, you own it fully. You can drive without having to worry about any truck payment at all.
Going this route also means it can be used as collateral down the road to make new investments in your business. Sure, the initial investment may be higher, but you may find it has a lot of value in the long run.
Additionally, you will have control over what you do to the truck, especially when it comes to things like adding upgrades or branding.
The Cons
One of the biggest cons of purchasing a commercial truck is having to have a large sum of money or a sizable down payment for financing. And, depreciation will need to be accounted for, as well.
Keep in mind that you will be responsible for repairs and maintenance. If anything breaks or needs to be repaired, you will have to front the cost.
Weighing all of these factors can help you determine whether or not a big purchase is best for your trucking business.
Learn More About Owning a Commercial Truck
Finding financing is often the toughest part of purchasing a commercial truck. But, at 10-4 Financing, LLC, we make it easy – even with bad credit!