Just because they come up clean on the BBB, is not always an indicator. They will have all their T's crossed and i's dotted, and you can bet that when and if your lease crumbles,....it will be you who missed the fine print, and not them,...therefore even if you perceive that they were not above board,.....their contract says otherwise, and you can't ding their BBB report if you are in the wrong.

I agree with Dejanh, find an alternative method,......or keep a huge chunk of money on the side to carry you through the 60 to 90 day slumps that exist in this industry.

In the event you have such cash reserves, why not buy your own $20,000 truck and assume the risk yourself. I know some guys who did this, and they are doing fine,....and nobody forces them to carry mega high insurance, or sends the repo man to get your truck if you miss 2 payments in a row.

Be careful,....lease companies are notoriously rigid in their business practice.

 

Do you know the terms?
Find out,....I'm sure a few of the trucks on their lot came from a situation like yours. I'm just saying,......be careful.

 

At least she's not hell-beant on selling me something.


This is true as well. I spoke to a dozen of banks that don't want any part of a commercial vehicle loan, especially first-timers.



This makes sense to me also.

I'm looking at buying a truck for $40,000. I told her that I had $20k to put down in hopes that would get me a loan.

 

Your company might have a reasonable rate, but this lease company may want you to have more coverage.
I hope this all helps, I hate seeing new drivers getting screwed, but its the reality of being in business.
My best advice for now (I'm getting sleepy) is to get all the info,...I mean ALL the info. Read it, understand it, if you don't understand it,.....take it to somebody who does, (not the lease agent). Did I mention all the info<<<..LOL
Good luck driver.

 

Good point, yeah the BBB aint %100 for that exact reason.

If I was to actually go through with this I'd have my accountant review all paperwork before I signed a damn thang!
Maybe also a lawyer.

That's why I considered this in the first place. I could keep all $20,000 in my savings and pay their lease payments and at the end of the term I could walk away and buy the KW W9 of my dreams, chickenlights and all :lol: :lol: (the KW part was a joke guys :lol: )

HEY AZ thanks for your help, dude

 

One more thing,...not to pry, but how much cash do you have?
There are a lot of guys on this board who will help with the advice, and let me tell you,....it like gold. Gman, rank, rev, even new guys like Steve booth have valuable input, so be patient, they will all probably chime in soon.

 

I have $30g and I'm not gonna put all my chickens in one basket.

Yeah I wonder where GMAN is? I sent him a PM this morning...

 

Leasing......OK......(deep breath).

1st.......any lease advantage is a tax advantage and that's where the advantage stops. It's difficult for me to give opinions about leases because I am Canadian and our tax laws differ from the US....

2nd...in my experience, most leasing companies take advantage of the "buyer" by using a low monthly payment as the hook. then they screw you with the fine print.

3rd.....in Canada at least, leases offered such huge tax savings (loopholes) that the government now claims the right to deem your lease a purchase...even several years after the fact. Don;t know if the US has done that.

Didn't read the previous replies, but I'm sure they are accurate. The big advantage to a lease (in canada) is that you can deduct ALL your payments for the year...instead of a % of the declining value of the item. Therefore, if you lease a vehicle on Jan 1, for $5,000/month, you get a $60,000 tax write off. After only 1 year, you may have wrote off the entire cost of the truck.

In Canada, we can only write off say 40% of the vehicle per year. You NEVER write off the entire cost.

Nothing wrong with leases IMO. Like them actually. The problem is that the lease agreement is often written by shysters.

 

As a small trucking company you won't realize any tax benefits from leasing. When you purchase a truck your depreciation and interest expense are fully deductible. The advantage to leasing in your situation is that it frees up your cash. Leases usually have two advantages; no or low downpayment and lower monthly payments. So you can get into a truck with minimal outlay up front. Just be aware that these benefits come at a price. Normally the interest rate is higher on a lease and you have the balloon at the end. Leasing is not necessarily a bad way to go. There are some benefits. Just be aware that you will almost always pay more over the life of a lease than if you had purchased the truck. Though some, like Dejan's deal, apparently defy that rule. Some will say that leasing, or financing for that matter, is a bad idea because if you get in a jam due to repairs or slowdowns they'll repo your truck. This should be of little concern because your business plan should account for these contingencies. If you aren't prepared for these occurrences then it doesn't matter whether you finance or purchase outright, you're relying on luck either way to see you through. As Arizona said, find out the terms of the lease, find out what you can get for financing terms and see which avenue works best for you. It may be that spending more in the long run with the lease will give you some initial flexibility that would allow you to more than make up the difference. However, the odds that this will be true if you're going to run as a lease-operator are pretty remote.

 

A lot of it is money management. With leasing you can use the interest from your cash to help make the lease payment. Whatever you do, you don't want to leave yourself without any cash.