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Considering Your First Truck Lease?

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If you are thinking of purchasing a truck, then you will have two options at your disposal: you can get a commercial lease for your truck or you can opt for a truck loan instead. It is also worth noting that both options will allow you to take your truck out on the road in order to transport goods and the like, and both will also require that you make payments on a monthly basis.

Considering Your First Truck Lease?

However, there are a few fundamental differences between the two options. Here, we will discuss what is involved in taking out a truck lease, and compare and contrast it to a commercial truck loan.

Truck Lease

There are many similarities between a commercial truck lease and renting out an apartment for the first time. That is, you will be able to use your truck as desired, but there are also certain rules and regulations that you will need to adhere to in order to continue utilizing your truck. In addition, the party that has leased the truck out to you will be responsible for the majority of the maintenance and repair work on the truck, assuming any damages incurred were not caused by misuse or negligence on your part.

What’s more, you will be expected to make monthly payments on your truck for the duration of the lease, and most truck leases will run between three and five years. Furthermore, the company or person that has leased the truck out to you actually owns said truck, but they will allow you to drive their vehicle for a predetermined period of time.

Some companies will allow the driver to have the option to purchase their truck outright after the lease has ended. You can also opt to return the truck to the owner if you feel you no longer need the truck or cannot afford to purchase it.

Truck Loan

You will be required to make monthly payments on a truck loan, similar to the payments that you would make on a truck lease. However, the primary way in which they differ is that you will be making your payments towards the actual value of the vehicle when you take out a loan. In other words, once you have made all of the necessary loan payments on the truck, it will become officially yours to do with as you please.

Pros and Cons of Truck Loans and Leases

A truck lease has some benefits over a truck loan. For instance, the payments that you will be required to make on your truck lease will actually be lower, in most cases, when compared to a conventional truck loan for a semi truck. This is because you’re actually not paying for the cost of the truck when you are leasing it.

In addition, you will usually not be required to place a down payment on the truck if you have opted for a lease instead of a loan. Another advantage of taking out a lease versus a loan is that you will not have to deal with any debts, which can help reduce both psychological and financial stress, and, as an added benefit, will allow you to upgrade to a superior truck in the future after the lease term has ended.

However, truck leases are not perfect and there are certain drawbacks that you may want to consider before you take one out. For instance, if you decide to lease the truck and then, after the term has ended, decide to buy it, then you will usually end up paying more overall than if you had opted to take out a loan instead.

Furthermore, if you decide to lease the truck, then some companies may require that you pay extra for additional insurance to ensure that their investment is protected in the event of an accident, which will further increase your expenditures.

It is also important to note that you are not making an investment when you lease a truck, as it is the property of another person or company. As such, you will not be able to upgrade the truck that you are driving if you decide to lease the truck instead of taking out a loan on it.

However, as mentioned, the monthly payments of a truck loan tend to be higher than the monthly payments of a truck lease, and you may have trouble trying to resell it if you opt to upgrade it in the not too distant future.

A Final Caveat

As can be seen, both truck leases and loans have advantages and disadvantages. You need to decide what you are looking for in terms of your goals and what you hope to get out of your truck lease or loan. For instance, are you planning to build a business around your truck or are you thinking of only using it for a few runs or for a year or two?

If in doubt, talk to a financial expert, as they will walk you through the entire process of taking out a loan vs. leasing a truck, and what you can expect along the way. Taking out a loan or leasing truck is a serious business venture that should not be taken lightly, and you should not hesitate to bring up any issues or concerns that you may have so that there are no unpleasant surprises to worry about after you have signed the contract.

Truck Loan Center

If you would like to lease or take out a loan for a truck, then please visit our website or give us a call at 1-866-230-0094, for a free, no obligation quote and consultation so that you can address any questions you may have. At the Truck Loan Center, we ensure that our clients get the lowest interest rates, and we also guarantee easy approvals and offer many lenders for peace of mind.

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