Leasing vs Buying

It is possible that you are even wealthier and smarter than the person who made the original quote, so I have no argument for either of you.

 

It's all about the bottom line. If you clear $100K per annum with either truck, then it's just a matter of which one you would rather be seen in.

 

OK ... seeing you need to get a few things straight, here goes.

First off leasing a car or pickup truck is a rather losing thing. You end up with no asset at the end of the lease and may owe more money than you intended to pay in the first place. The lease was and always is a business thing, giving you an instant write off on costs. However the auto companies thanks to low interest rates can dump more of their junk on the market through leasing to make instant sales than they can with conventional sales.

Second the truck leasing that we commonly hear here is lease to own or company leasing, which for many doesn't work out, I don't know why, don't really care because I will never do that ever in my future. For some it works out great and they end up with a truck that they know, and the truck is taken care of by force (contractual) through the company.

Third is the standard truck lease, which is the Ryder/Penske/ mom and pop type system which is either short term or long term leasing - like 6 month or a year. This lease can be very cost effective and work out for someone who has their company setup right. It won't work for many who think they can make a fast buck. Yes they will report your late payments and they will ding you for things like maintenance costs (per mile cost are always in leases) but if the truck pukes on you, it is their responsibility to fix it or get another one to you and their up time is usually trouble free for the most part (they will do the oil changes, hub seal and other repairs to make sure it runs). I lease out one of my trucks for a flat rate plus mileage, the truck has a million plus on it, the lease payments are reduced to reflect that and the per mile charge has built up enough money for an Inframe and trans replacement if needed. The reason this guy leases the truck from me is he writes that costs off instantly, he doesn't want to deal with the the related costs of taxable income with owning a truck even with depreciation due to how he has business setup.

Hope that helps.

 

I read here that a guy with a CDL can't just walk into a place like Ryder and lease a truck. You have to be an established trucking company. Is this true?

 

also am curious about this.

 

what would you say in general would be the right setup for a company to make leasing work?

 

How about you think about the long term. Leasing means you will have a payment every month.

Buying and eventually having $0 a month for payments sounds better right?

Why would you want to have a 100-400/payment a month for the rest of your life?

Now I was talking about cars. Leasing/owning a truck is different.

 

absolutely about the cars.

but as far as trucks and it being my business, I like the idea of getting a 6 month lease every years busier season and running hard and then doing something else profitable with my 6 months off, and not having to worry about making my truck payment or a lot of the other hassles of owning a truck. just lease a truck from Penske or one of them and then sign on with one of the owner op companies like landstar, from what I heard ill be able to do that but definitely not sure.

just an idea in the head of a beginner driver I'm sure there is a lot I'm not considering yet, just thinkin about what I wanna be doing after a few years exp

 

I don't know about that, I did just that when I needed a truck when I got back into this business, I went to Ryder, rented a truck and had it for three months. It wasn't under a company name but a DBA.

That is the question. It depends on you and your accountant/lawyer or other advisers. See each person is different, each person has or should have a plan (business plan) and a set of goals/accomplishments they want to achieve. Once that is all on paper, then have people who you pay advise you on which business structure you need and how to setup your accounting practices. I would not get an LLC by the way, it won't provide anything other than a pass through tax system, there is still the liability there no matter what anyone says otherwise - lawyers may say to get one but will they defend you for nothing if you have to deal with a lawsuit?

 

You may have $0 monthly truck loan payments but how much will an out of warranty truck with 6-700,000 miles going to cost you each month in repairs and maintenance?.

Lease a brand new truck every 3 years and repair costs will be minimal or even non existent with the option of an extended warranty. Won't even have to buy tires for the thing before you hand it back. There is also the tax benefit of writing off the depreciation.

I may never be in a position where I want to be a trucking business owner, but if I was, I would choose the lease route.