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7 Reasons to Lease a Used Commercial Truck

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Many companies and self-employed people throughout Canada require commercial trucks in order to facilitate their businesses. Truck leasing has become a common if not preferred financing option due to the many benefits it provides, but perhaps what is most intriguing is that more and more of these leases are for used trucks rather than new vehicles. With that in mind, let us consider seven reasons to lease a pre-owned vehicle rather than one fresh off the line.

Reasons To Lease A Used Commercial Truck

  1. Avoidance of Significant Depreciation

    Among the most daunting aspects of owning new commercial trucks is depreciation. Your new truck depreciates the moment you sign on the dotted line. A used truck, on the other hand, has already undergone that initial depreciation and is now just subject to the year-to-year devaluation. It’s worth mentioning that commercial truck leasing and vehicle leasing, in general, do account for depreciation to some degree but certainly not all of it, and since there’s less value to lose, that lesser amount is reflected in the cost as well.

  2. Relaxed Credit Standards

    Credit standards are something that all businesses and especially self-employed sub-contractors have to deal with. Even with a successful business and positive creditworthiness, how lenders evaluate you as a credit risk can and often will change based on the economy and many other factors. There is much less risk for a lender when it comes to pre-owned vehicles. There can be other factors as well, such as lower or greater demand, more competition and so forth. This motivates many banks and other financial institutions to extend favourable loans that may not be possible with a similar but new truck.

  3. Lower Upfront Costs and Monthly Payments

    A small down payment and low monthly payments may be the most obvious reason on the list, but that doesn’t make them any less important. Sure, it is one of the driving factors that lead people into considering commercial trucks to leases and used vehicles. Choosing to lease a pre-owned means that you retain or require less capital. It also means that your fixed expenses are lower, which means more money to put back into the business.

  4. More Opportunity to Drive Up-Spec Equipment

    Upselling is a technique by which salespeople sell you on upgrades. In the commercial trucks industry, up spec or specifications refer to options and configurations beyond the basic. Leasing often gives you the ability to purchased advanced models with all the bells and whistles without the expense. Upgrades often factor in a lot to the initial depreciation and don’t have nearly as much value in the second-hand market as you might imagine. Your ideal truck is a much more practical acquisition when you choose to lease rather than purchasing outright.

  5. Lower Insurance Costs

    There are a lot of factors that go into commercial vehicle insurance, but as with standard passenger vehicles, the bulk of your overall cost is predicated on the book value. When you lease — or purchase — pre-owned, that book value is lessened by years of depreciation. This isn’t necessarily limited to actual value but can influence liability and even costs associated with cargo. These insurance costs have to be factored into the total cost of ownership in order to appreciate them fully.

  6. Lax Mileage and Other Restrictions and Penalties

    Mileage and other restrictions are one of the great challenges you can face when agreeing to truck leasing for new commercial trucks. After all, mileage is the greatest factor in resale value, and so the owners of these trucks are very protective of how much mileage can accumulate. It’s very difficult to negotiate a favourable lease for a new commercial truck. The restriction thresholds are often tough to remain below unless you only travel locally, and the penalties are often so severe that they undermine whatever savings that contract afforded you in the first place.

  7. Lease Completion Incentives

    An exciting option that truck leasing allows for is lease completion incentives. These are sometimes called end-of-lease incentives. Such incentives mean you have the option to end the lease with little to no penalties or because the owner wants to encourage you to remain below certain thresholds. If you can help the owner sell the vehicle for a higher price when your lease is complete, for instance, that benefits the owner. Another option that leasing often gives you is ownership at a reduced cost.

    For more information, please call Truck Loan Center at 1-866-230-0094 or contact us here.

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