Should You Rent or Buy a New Truck?
Both leasing and purchasing a truck come with pros and cons. To help you choose the right option for you, here are the advantages of each approach.
When it comes to leasing vs. buying a truck, pros and cons for either option aren’t always apparent. One will prove a better choice than the other based on your needs, preferences, and financial capabilities.
Needless to say, this decision is even more important for professionals.
While deciding between leasing a truck vs. buying a truck for your personal use affects only your house budget, choosing whether to lease or buy a truck will affect your entire business. This is especially true if you’re looking at acquiring multiple vehicles.
One thing’s certain: there’s no universal right or wrong answer here.
Ultimately, you’ll make a choice based on your priorities. But you’ll first need to know all of the essential information to make an informed decision.
In this article, we’ll be playing the devil’s advocate and explain the benefits of leasing a truck as well as buying a truck.
Why Leasing Could Be a Better Option
Before going into the details, it would be best to establish what leasing a truck means.
Leasing is pretty much the same as renting, albeit with something of a twist. You’d sign a lease contract to rent the truck for a more extended period – usually three or four years. But at the end of the lease period, you’ll have two options: return the vehicle or purchase it.
This point is a crucial factor for many when weighing between leasing a truck vs. buying a truck. Financially speaking, there are some considerable benefits to leasing. Here’s what you can look forward to if you choose this route.
Benefit #1. No Large Expenditure
Getting a commercial truck is usually a massive expense if you decide to buy. Besides the price of the vehicle, there are often hidden costs involved in the transaction, many of which you’re required to cover upfront.
With leasing, you likely won’t have to deal with the same taxes and finance charges that apply to buying. Naturally, this is only the case if you opt to return the vehicle after the lease contract ends.
The lower monthly payments of a lease can be less cumbersome for your business compared to taking out a loan. Simultaneously, you won’t have some of the headaches that usually come with owning a vehicle.
Benefit #2. No Depreciation Costs
One of the detriments of truck ownership is that the vehicle’s value will decrease over time. This depreciation means you’ll never be able to sell the truck for what you bought it for. While this is quite common sense, the underlying issue could be that depreciation lowers your company’s net worth.
This problem doesn’t exist with leasing.
Depreciation costs don’t affect your business in the slightest and you can have a new vehicle available every few years. That’s why when measuring leasing vs. buying a truck pros and cons, depreciation plays a significant role, even more so in the case of commercial vehicles.
Benefit #3. Hassle-Free Maintenance
Purchasing a new vehicle can be risky. You never know if there are some unexpected maintenance or repair costs around the corner. And even if everything’s fine initially, every truck will be due for regular service at some point.
When you have a full-service lease on a truck, the costs of routine inspections, oil changes, and repairs don’t fall under your responsibility. In fact, with a leased new vehicle, the warranty could cover all of those expenses.
Why You Might Still Want to Consider Buying
With everything said above, you might think that there’s no dilemma about whether to lease or buy a truck. However, buying a truck comes with its own benefits that you should consider.
Even though leasing can be profitable due to lower monthly rates, you might find that paying off and owning the truck is a sounder long-term financial strategy.
Benefit #1. Leasing Terms Can Be Confusing
While leasing doesn’t come with the same additional expenses as purchasing a truck, it’s far from free of hidden costs. Unfortunately, leasing terms aren’t always straightforward about those fees and expenses. Instead, they may seem deliberately obscure.
When returning a leased truck, you could get an unpleasant surprise in the form of additional expenses you never knew existed. On the other hand, you’ll be completely done with financial obligations after you pay off a truck, avoiding any complications and the resulting confusion.
Benefit #2. No Mileage Limits
Leasing comes with particular limitations regarding mileage. Often, this limit’s set at about 24,000 km per year, which is very close to the distance covered by the average driver.
Such a limitation could present a complication for professionals who use the vehicle for work, as breaking the limit comes with considerably high additional fees.
Dealerships impose this limitation to ensure that the vehicle’s still in good condition for further leasing or a subsequent sale. From the customer’s side, though, there are no positives.
Of course, when you decide to purchase a truck, you can use it however you want.
Benefit #3. You Can Resell the Truck
Granted, the truck’s value will drop considerably with time due to depreciation. This means you can’t get the money paid for it back. But if you own the vehicle, there’s at least the option of selling your truck.
With leases, you’ll pay the monthly rate until the term ends and then return the vehicle. Alternatively, you could opt to purchase it, but this opens up a whole new discussion about whether it’s profitable to buy a new truck this way.
When you own a truck and keep it in good condition, the sale can still bring you thousands of dollars. That’s always better than nothing.
Make an Informed Decision
Whether you decide to lease or buy, hopefully, you now understand some of the most significant advantages of either option.
Although leasing can grant you access to vehicles you couldn’t afford to buy and saves you certain complications, it introduces some of its own. Buying will allow you all of the freedom that comes with ownership and leave you with a truck in your possession.