Buying truck vs Leasing(not what you think)

I went the lease route, with no ballon at the end of the lease. I have decuted the entire lease payment, as I did with trailer and the apu on a lease deducted every cents

 

The financing method doesn't matter that much as far as taxes. With a lease the payment is for depreciation and deductible with the down payment, if you choose to buy out, at the end. With a down payment at the front end the depreciation is also deductible but can be a challenge to calculate. The depreciation of the asset may or may not match the payment.

My approach has been that the truck is a tool the same as my hammer was when I was a carpenter. I'm not emotionally attached to either. For MY SITUATION a lease is the better way to go. I have the use of a new truck with a warranty that I pay for only the value I use. That fat down payment stays in the bank and when the lease is up I get a new truck.

The key is to approach this as a business decision and actively force yourself to leave the emotion out of any decisions. Do the pro/con list, listen to what your tax accountant has to say regarding lease/buy. Ask yourself if you want to make money (as a business) or do you want to have a cool chrome queen that's "mine, all mine! ".

Okay, flame me, y'all!
Frank

 

If you buy a truck , you can claim depreciation and deduct every legitimate expense. Imo, the question would be: which is cheaper, leasing or buying. From what I have seen, leasing is usually more expensive. I bought my current truck new in 2003. In my case , buying was much cheaper than leasing.

 

Full disclosure: Never been an OO of any type.

But, If I leased a truck. I have lease payments. When the lease is up and I get another new truck to lease (you said you would get another new truck) then I still have lease payments. Yes I get to deduct the payments this is true, but it takes from my net income.

Now, if I purchase, I depreciate the truck and get to write off the interest. When the truck is paid for, I don't have any more payments, I have a title in my hand, and I have a piece of equipment that has a value of some sort that I could sell and recoup part of the cost. I also have that payment I was making put back into my net income. It is true, I will pay taxes on the net income.

If I have to pay tax on the net income, which is greater because I bought the truck, paid it off, and now the payment is in my pocket instead of the bank, then I will pay, say 30% in tax on the money. If I lease the truck I get to give the bank the full amount (100%) of money (lease payment) month in and month out and never realize the 70% of the payment in my pocket. I do, however, always have shiny new wheels to haul freight with.

So, do you want to have cash in your pocket with ownership of a truck that is worth at least something (even a down payment used for a trade in on a new shiny truck),

or

shiny wheels under your pocket and the bank (or carrier) have the title and equity in the truck you helped pay for and cannot sell or use for a trade in?

Only you can decide.

 

I always do TRAC lease myself. Have done it on the past 4 trucks I have owned.
I run the numbers and the lease always comes out ahead after the first 2-3 yrs.
Not getting into a pizzing match with anyone about it, so run the numbers yourself and see how it looks.

Martin

 

I could see leasing if there were absolutly no maintenance cost to the driver i mean none Problem is if you cant work one week that large payment is still due vs say a 1400.00 month payment. Cure leasing i think does a lease at 3600.00 a month. Dont know if that covers all maintenance or not they also have a balloon payment 25k and up at end of the lease. lmao

 

I'm in a lease purchase myself. I've been told by CPA that you can write off payments. But this is a "Lease Purchase" I'm in where I take ownership at the end.