When it comes to financing a commercial truck, there is a crucial decision to be made: buy or lease. Both options offer unique benefits depending on your business needs, budget, and long-term goals. But before signing any paperwork, understand the pros and cons of buying versus leasing to ensure you make the best financial decision for you or your business.

Buying a Commercial Vehicle

According to a recent American Trucking Association (ATA) study, slightly over fifty percent of owner-operators in the United States own their own trucks. (Source)

Buying a truck is a long-term investment that offers significant benefits over leasing. Buying means you own the truck outright once your loan is paid off. Purchasing a commercial vehicle typically has higher upfront costs than leasing. However, the long-term advantages can outweigh the initial investment. Ownership allows you to build equity, maintain flexibility and control over your vehicle, and achieve sustained financial stability.

From a financial perspective, owning a truck is a smart move for the future. Each payment toward your commercial vehicle increases your equity in the truck, turning it into a valuable asset. This asset can be leveraged for business growth or sold for profit when the time is right. Additionally, ownership often reduces operational costs over time. As the truck owner, your primary expenses will consist of maintenance, insurance, and operating costs — all of which are generally more predictable and manageable. Drivers who value quality, durability, and reliability often choose to purchase their trucks.

Leasing a Commercial Vehicle

Leasing is essentially renting a truck in exchange for monthly payments over the fixed term of the lease. Although leases have some terms similar to a loan, leasing is for drivers who are looking for lower upfront costs and shorter flexible terms. Although, it depends on whether you’re leasing-to-own (another option), in which case, the monthly payments will be higher.

Drivers who have less-than-perfect credit typically favor leasing over buying. It allows them to drive their truck off the lot, without putting down a large chunk of money and having to qualify for a commercial vehicle loan. You are also able to upgrade to newer models more frequently. Additionally, your monthly costs may include maintenance in the lease payment.

From a financial standpoint, leasing offers less risk because it allows you to manage your finances better. While both buying and leasing require monthly payments, leasing does not require as big of a financing commitment. For example, while leasing can require little to no down payment, you will not own the truck and therefore, cannot turn it around for profit at a later date. If you do not buy the truck when the lease expires, it could end up costing you more than it would have if you had purchased one from the start. Not included with your fixed monthly payment are the extra charges you incur if you exceed your allotted monthly mileage. Lastly, keeping your leased vehicle for a prolonged amount of time may result in higher long-term costs.

Why Buying is Better

One of the most compelling reasons to purchase a truck is the opportunity to build ownership and equity. While the upfront costs may be higher than leasing, the long-term financial benefits often outweigh those expenses. Unlike leasing, where you have no claim to the vehicle at the end of the term, buying a truck allows you to invest in an asset that holds value over time. Owning transforms the vehicle into a tangible asset for yourself and your business, providing both flexibility and financial stability.

Building equity in your truck can also improve your financial standing, which is a key advantage when applying for future loans, acquiring other assets, or negotiating better financing terms for additional equipment or vehicles in the future. You can also capitalize on tax benefits, as truck owners often qualify for deductions related to depreciation, interest on vehicle loans, and maintenance costs, further reducing your overall financial burden.

Beyond the financial benefits, ownership offers freedom and customization options. As the owner, you have no restrictions, which are often set in place by leasing agreements. You can upgrade your truck’s interior and exterior features, install new equipment, or enhance its functionality to better suit your specific needs. Whether it’s adding advanced technology like Cobra CB Radios, upgrading to Seats Inc. Seats for comfort during long hauls, or enhancing the exterior for business branding purposes, your possibilities are endless.

Buying a Truck with Coopersburg & Liberty Kenworth

If you’re ready to make a decision, it pays to invest in a truck that offers durability, performance, and value. Kenworth is known as “The World’s Best” because they deliver unmatched reliability and efficiency.

At Coopersburg & Liberty Kenworth, we offer a range of financing options that meets the needs of every driver. Browse our extensive inventory of new and used trucks and let us help you find the perfect financial solution for your fleet.