Should You Lease Your Truck To Get Started?

If you’re considering getting into trucking, know that it’s an expensive industry to break into and it’s difficult to make it. The best way to success is to research all of your options and to have a well-developed trucking business plan put into place.

Part of starting out is getting your own truck and that’s pretty obvious. How can you haul stuff without it? Well, when getting your truck, be sure to consider every angle. Think about getting a new truck versus a used truck and you can even look into leasing to get started.

Should You Lease Your Truck To Get Started?

Sometimes leasing a truck can save your rear at the end of the day, because semi trucks are expensive. For a reliable, used older truck costs can be upwards of $60k. If you need a loan to purchase it what happens if you have bad credit and get rejected or your credit causes to rate your monthly payments to be too high?

Well, then you lease your truck! Leasing is a way to start your operation in newer equipment at a lower monthly rate and it could provide tax deductions. However, some leasing companies have step up payments, meaning your monthly payments could increase after a few months have passed. Watch out for that in your contract.

Leasing offers a shorter commitment to your truck because you agree to pay a company a fixed rate for a period of time in exchange for using their equipment. A typical lease lasts about 3 years while buying a truck is forever. This way if you see that trucking isn’t for you can walk away. However, if your trucking business takes off, you can confidently purchase your own rig.

Leasing your truck will also show you the true responsibilities that come with owning a truck. You will have to handle all of the finances for it, such as fuel, big repairs, small repairs, and more. Plus, depending on how you operate as an owner-operator you’ll be responsible for all of the insurance costs like cargo insurance.

Don’t let the word ‘repairs’ scare you. Leased trucks are often newer, so they require less maintenance. Also, they have less of a chance of breaking down if you take care of them properly. You will put a security deposit down for leasing your truck and can earn it back for taking good care of it.

With the way technology is moving these days as soon as you get the latest gadget a new, better one comes out literally 10 seconds later. Leasing gives you the opportunity to upgrade to newer trucks more often, whereas with owning your truck you’re stuck with what you have for a while! But that’s not necessarily a bad thing, some truckers can end up loving their rigs more than their spouses.

Also, there is less risk involved with leasing. If you buy a new semi and your business fails you could lose a lot of money trying to sell it because of its depreciation rate. If you can’t pay for your truck and it gets repossessed your credit will take a serious hit.

However, if you need to end your leasing contract you will have to pay an early termination fee and you will lose your security deposit. The repercussions on your credit score will be much less severe.

Is Leasing Your Best Option?

As leasing your truck provides less of a financial commitment than buying a truck, it can be a great option if you’re trying to get your trucking business off the ground. It also comes with the flexibility to get newer trucks more often.

But the only person who can answer that question is you. You should run your numbers and talk to an accountant or financial advisor to discover the best option for your personal needs and financial situation.

Visit TruckLogics for more trucking blogs and please share your advice about leasing trucks in the comment section below.