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Could Leasing be a Viable Option for Your Business?

So you business is growing, and you are in the market for some new trucks to move your inventory. You may be thinking to yourself, "Should I buy or lease?" Here is some valuable information to know about the leasing option.

The most obvious advantage of leasing a heavy truck is the initial cost. There is little, if any, money required to be put down up front. Because you are not committed to buying the vehicle, the monthly payments are less than what would be required if you buy it. Most leases last from 1 to 3 years. Because you will keep the vehicle for a shorter period of time before you exchange it for a new lease, you will always possess the latest in automotive technology.

There are different types of leases available, so you will be able to select one that fits the budget of your business. The varying dynamics and other factors of different businesses will mean different needs. One type is a closed-end lease, where the length of time is determined at the outset. With this option, there are mileage restrictions, and going significantly over them will mean additional costs.

Open-ended leases do not have mileage restrictions, nor a definite time period, but will also have a higher monthly payment than the closed-ended. It may also involve a depreciation fee if the truck undergoes especially heavy use during the duration of the lease.

Other types of leasing include the following:

  • Option to buy. You can purchase the truck at the end of the lease. It may be advantageous if you would have to pay an especially high depreciation fee.
  • Single payment. You will pay more immediately, but will pay less overall, as you will not have to deal with an interest cost.
  • Subvented. These have low interest rates, at the cost of having a smaller selection of models available.

Leasing is forecasted to become a more popular option over the coming years. One of the largest factors driving this is the increase in house sales, along with the anticipated healthy growth of the general economy. If you have any further questions about this matter, do not hesitate to contact us.

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