- October 12, 2021
- Posted by: Sergey Grushetskiy
- Category: Semi Truck Financing
If you’ve needed a new car in the past, you probably did some research on buying vs. leasing—and almost every financial expert will tell you that you’re better off buying. When it comes to semi trucks, the same is true. The benefits of semi truck financing vs. leasing are significant. In fact, it’s even more important to buy a semi truck instead of leasing it because it’s an investment in your business as an independent owner operator. Here’s what you need to know.
A Leased Semi-Truck Is Not Your Own
When you’re leasing a semi, you’re basically renting it. Just like an apartment, you’re limited on the modifications you can make, so it never truly feels like your own. This might not seem like a big deal, but when you spend so much time on the road, you want a cab you feel comfortable in. Even more important, if you’re a semi truck driver, your truck is your business. Not owning your biggest asset is a liability—should you decide to change careers or if an injury leaves you unable to work, when you finance a semi, it’s yours to sell and collect any difference between the sale price and what you owe. You net nothing when you have to give up a leased semi.
Financing Is Less Expensive in the Long-Term
Advocates of leasing argue that you need less money upfront, making it a more affordable option for many new drivers. While this is true, over time, you’ll spend less if you finance, especially if you decide not to buy your truck once your lease is up. At the end of your lease, you may also find that you have to pay unexpected costs for damage or not maintaining your semi truck to certain standards. With financing, you can look forward to the day that your truck is paid off and what you used to pay for it each month becomes pure profit.
Leases Have Pitfalls
If you work for a trucking company, they might offer you the opportunity to lease a semi truck. This could seem like a good deal on the surface, but it’s important to read the fine print. Some companies make it so you’re no longer eligible for health benefits if you lease a truck from them. Your lease payments may be deducted from your paycheck and you may have to set aside money in escrow to cover necessary repairs. When you purchase a semi truck via financing, the agreement is much more straightforward. In addition, it doesn’t tie you to one employer—you’ll have the freedom to be an independent owner operator.
Insurance Rates Are Less Expensive
When you own your own semi truck, your insurance rates will be less, which helps you save money—and this can add up over time. Insurance companies see drivers who own their own semi trucks as less of a risk than those who lease them.
Financing Is Better for Taxes
When you lease your semi truck, you’re not considered the owner for tax purposes, so you can’t deduct your payments as an expense. You can do this if you finance your semi truck, and you can also deduct any depreciation, saving you even more on your taxes.
Learn More About 10-4 Financing
Are you interested in financing a semi truck? Contact us today at 888-908-7701 to speak with one of our representatives and get started with 10-4 Financing.