Buying Your First Truck: Financing vs Leasing

Buying Your First Truck: Financing vs Leasing

If you’re thinking about making the jump from being a driver to an owner-operator or starting your own trucking company with yourself at the top, getting your first truck is a major hurdle to overcome. With most large commercial vehicles costing six figures, you probably won’t be paying out of pocket.  One way or another, you’ll almost certainly need assistance buying your first truck.

One option is a traditional bank loan for vehicle financing, or you could work with box truck lease companies instead, and you have a couple of options there. Let’s look at the differences.

Buying Your First Truck: Financing vs Capital Leases vs Operating Leases

I. Financing

The first and most obvious option is to go to a bank for a vehicle loan and finance the truck much like you would a personal vehicle. This is the most simple and straightforward option. The truck becomes your property once the deal is set and remains yours if you make the payments.

The big X factor is your credit rating – and first-time truck buyers often don’t have the best credit. The worse your credit is, the more you’ll be paying in interest – potentially up to 30%.  Also, you will likely have to provide a significant down payment.

II. Capital Leases

A capital lease is similar to financing, except that you’re dealing with the box truck leasing companies directly rather than going through a bank.  You are considered the legal owner of the truck once you begin leasing, and you pay the value of the truck through monthly payments. At the end of the lease term, the truck becomes yours.

Your credit rating still impacts your leasing terms, but potentially not as much. Zero-down leasing is also often an option.

III. Operating Leases

Finally, there are operating leases, but be aware – this is functionally a rental. The truck does not become your property and will be returned to the original owner at the end of the lease period. However, this is the easiest option to qualify for. Also, you will end up paying less money than you would in a capital lease, typically saving around 25% of the truck’s value, compared to lease-to-own options.

This doesn’t gain you assets, but it can be an effective way to get a new trucking company off the ground at the lowest up-front cost.

Lease Your Box Truck Today

C&M Motors offers highly competitive terms and rates for leases on new Hino trucks! Click here to learn more about our leasing programs.

Espanol / English »