TruckLenders USA - #1 in Commercial Truck Finance: Why ...

Why commercial vehicle leasing is a better option than buying for small businesses When choosing to add new commercial vehicles to your small business fleet, there are pros and cons to both buying and leasing. What follows are some of the benefits of leasing a commercial vehicle rather than buying: When buying a commercial vehicle for your business you make a down payment (usually of at least 20%), and make monthly payments (if you set up financing through a commercial vehicle lender). In this scenario you must pay sales taxes, and you are able to sell or trade the vehicle at some point in the future. This gives you a certain amount of flexibility as a long term owner of the vehicle, in addition to the cost saving of not making monthly payments if you retain the vehicle for a number of years after it is paid off. One of the inherent risks here however, is the potential for mechanical failure and costly repairs that will likely occur as the vehicle ages, in addition to the fact that newer technologies will inevitably cause some amount of obsolescence in the vehicles capabilities over time. When leasing a commercial vehicle, on the other hand, you are only paying for the cost of the vehicle that you actually utilize during the lease period. Depending on the lease incentive you may be able to save money by avoiding down payments and other up-front or monthly lease related fees. Some states also do not require sales tax to be paid for leased commercial vehicles. Some of the most immediate benefits are the fact that you can replace your commercial vehicle every two to three years and take advantage of all of the latest technologies that are developed, in addition to the fact that with a newer vehicle there is less risk of incurring the costs of mechanical repairs and less long term responsibility for commercial vehicle maintenance. Additional benefits to leasing are that monthly payments are tax deductible and some leases include coverage for repair and maintenance of the vehicle. Since the vehicle can be turned in for an upgraded model at the end of the lease, it removes the time consuming process of trying to sell the vehicle, whereby a business may lose a good amount of their initial investment due to the depreciating value of the vehicle. Keep in mind, however, that leased vehicles may have mileage limits, and charges when mileage has been exceeded, which may or may not fit in with the needs of your business operation. Also, leased vehicles cannot be customized to provide specific services, or for advertising purposes the way that vehicles that are purchased can be. For many businesses, however this is not a factory when choosing to lease a commercial vehicle. One of the biggest benefits of leasing is to have the vehicle covered under warranty which, even with an extended warranty, would eventually expire if purchasing a vehicle. In the end, while leasing a commercial vehicle rather than buying a commercial vehicle may not be the right solution for all businesses, it no doubt offers an enticing amount of cost savings, and worry free incentives for most businesses, most of the time.

Source: http://trucklenders-trucklendersusa.blogspot.com/2013/01/why-commercial-vehicle-leasing-is.html

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