The decision between purchasing or leasing is a significant consideration. Every business owner and manager must make prudent financial choices to ensure the continued success of their enterprise. Whether you are initiating your first business fleet or expanding an existing one, it is essential to ask yourself an important question: would it be better to buy a commercial truck or to lease one as needed? Hopefully, this will help you find the answer you’re looking for.
Costs Of Leasing a Commercial Truck
When considering a commercial truck rental, you have to take a lot of costs into consideration. In many instances, the monthly expense associated with leasing a vehicle is considerably lower than the amount one would incur in loan payments when purchasing a vehicle outright. However, the cost associated with leasing a commercial truck will vary based on factors such as the truck’s size, model, and age, as well as any additional features or services incorporated into the leasing agreement.
Costs of Commercial Vehicle Insurance
When leasing a vehicle, it is essential to consider various additional expenses, one of the most important being insurance. Unlike personal auto insurance, commercial vehicle insurance encompasses coverage for both driver and business liability, necessitating different types of coverage. The expense of commercial vehicle insurance can often exceed the actual leasing costs. On average, commercial auto insurance ranges from $800 to $1,200 per month for each vehicle, so that’s definitely a cost to add to your budget.
Fuel and Routine Maintenance Are Important
Fuel and maintenance are costs that you would be responsible for, with or without a lease. You can approximate the monthly expenditure on fuel by employing a straightforward calculation: divide your average daily mileage by your gas mileage, and then multiply that number by the price of gas per gallon. That provides you with a rough estimate of your monthly gas costs.
The costs associated with routine maintenance are an easier number to calculate since you probably already have a maintenance routine that can be extended to your new vehicle(s).
Commercial Lease Payments are Tax-Deductible
There are also tax implications to take into account. When acquiring a commercial truck, the interest on the loan may be deductible. In contrast, leasing allows for the deduction of the full monthly lease payment from your business taxes, which can significantly reduce your overall tax liability. Leasing a vehicle is classified as a deductible business operating expense, making it a valid component of your business tax deductions.
Consequently, leasing a commercial truck can lead to substantial savings on both incoming and outgoing expenses, as it typically results in lower monthly payments compared to loans, along with tax deductions on the lease payments.
Leasing a commercial truck or fleet necessitates the careful evaluation of the associated costs so that you’re making the right purchasing choice. In addition to the fundamental lease payment, it is essential to account for insurance, maintenance, debt ratio, and taxes.
If you’re interested in renting a commercial truck for use, be sure to contact the company nearest you to see what options are available.
