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What are the pros and cons of leasing a commercial vehicle?
When it comes to weighing out the pros and cons of leasing a commercial vehicle, there are a few things to keep in mind. First of all, you will want to weigh out the pros and cons of obtaining a new piece of commercial equipment and find out if it is advantageous or not for your company to seek the assistance of commercial vehicle financing. You may determine that commercial vehicle financing is not the best avenue for your company at the present time and may be able to get by with the equipment that you currently have for a while before you can commit to commercial vehicle financing. If you decide that commercial vehicle financing is what your business needs at the present time, it may be wise for you to consider leasing a commercial vehicle.
A commercial vehicle lease is much like a commercial vehicle loan, with a few exceptions. First of all, the way that the lease is reported on your financial statement differs than that of a commercial vehicle loan. A lease will report only your monthly payment as a debt, as opposed to the entire amount of money financed. Secondly, many commercial vehicle loans will require a down payment, sometimes it can be a substantial amount required in order to obtain financing. With a commercial vehicle lease, however, there is not a down payment. What is often required, instead of a down payment, is the first and last months payments upfront. Also, with a lease, you can ask your commercial vehicle financing company to assign a residual payment at the end of the lease term, or your commercial vehicle financing company may ascertain that a residual payment is required during the approval process.
Having the option of a residual payment is an added benefit of a commercial truck lease because it can allow for your monthly financial obligation to the commercial vehicle financing company to be lower. Another "pro" to leasing a commercial vehicle from your commercial vehicle financing company is the tax write off. With a commercial truck lease, you are able to write off your monthly payments in full, which is quite a blessing when you file your taxes. Also, you are not paying your taxes all up front, as you do with a commercial vehicle loan, but instead you are paying your taxes a little bit at a time, with every payment you make to your commercial vehicle financing company.
Deciding whether or not to leasing a commercial vehicle through a commercial vehicle financing company is a big decision and not to be taken lightly. This is a decision that can make or break a small transportation company and therefore must be made based on information and research. Take your time, decide whether or not leasing a commercial vehicle from a commercial vehicle financing company is right for you, and once you have made your decision, proceed with confidence.