Is Buying or Leasing a Box Truck Best for My Business?
To successfully manage your business, you must invest wisely. This is especially important when deciding whether to purchase or lease a truck. Monthly payment costs, down payments, maintenance, insurance, fuel, and the length of time you plan on operating your vehicle before upgrading are all essential considerations that will impact your business’ financial flexibility and bottom line. Could the costs of leasing a box truck benefit your business over a box truck purchase?
Costs of Leasing a Box Truck Vs Box Truck Purchase
Using simple math to decipher the total cost of owning versus leasing a vehicle won’t work. A $50,000 truck ¸ 60 months (a traditional 5-year loan) will not equate to an $833.33 monthly payment. Interest rates play a pivotal role in overall cost, varying based on your business’ credit.
- 2-year-old (+) business with good credit:
Assuming a 4% interest rate and payments of $920.83/month, a $50,000 vehicle purchase would cost $55,249.57 by the end of the loan.
- The in-between:
Newer businesses with decent credit or established businesses with mediocre credit may fall somewhere in between typical rates. Assuming a 10% interest rate and payments of $1,062.35/month, a $50,000 box truck would cost you $63,741.13 by the end of the loan.
- New business with risky credit:
Risky new ventures could see interest rates of 15-25%+. Assuming an 18% interest rate and payments of $1,269.67/month, you’d pay a whopping $76,180.28 for your box truck by loan termination.
Box Truck Leasing Benefits
On the flip side, you could lease your vehicle. Leasing offer a number of benefits a traditional purchase does not:
- Lower Monthly Payments, Including Maintenance
Leases typically offer far lower monthly payments than purchasing, including maintenance costs for easier budgeting. You also still have the option to own the vehicle at the end of your contract with a “buyout option.” Simply pay the remaining balance and own the truck at the end of the leasing term.
- Lower Down Payments
Short and long-term leases can be obtained for little to no money down, as opposed to the typical 15-25% down payments required to purchase. This offers greater flexibility for cash-strapped buyers, allowing you to secure a newer vehicle for less up-front. You may even qualify for $0-down during initial months, earning income before payments begin.
- Access to the Latest Models
Rather than worrying about the trade-in value of older vehicles and your ability to purchase a new truck with the latest features, leasing allows you to focus your energy and capital on other facets of your business.
- Protection Against Depreciation/Trade-In Issues
Leasing safeguards you against fluctuations in vehicle value and market conditions. At the end of the term, just turn in the vehicle and begin a new lease. You’ll never be upside-down.
Are you missing out on newer box truck models that could benefit your business? Learn more about the costs of leasing a box truck.Contact Diamond Mitsubishi Fuso at 408-263-7300 today.