Advantages to Leasing a Used Semi
Leasing offers multiple advantages to businesses and independent operators alike. Perhaps the most obvious benefit is the low upfront costs compared to buying. There is little to no down payment and none of the credit restraints associated with purchasing. Leased vehicles also don’t depreciate the way that owned vehicles do, and leasing allows you to invest your capital in other areas of your business.
Another advantage to leasing is that it gives you access to vehicles that you may not normally be able to afford. Even when it comes to leasing used semi-trucks, you still have the ability to lease newer or more advanced models that would come at a significantly higher cost when outright purchased. Plus, if you operate your own fleet, you can ensure that all of your vehicles have the same operational and safety features.
And with a full-service lease, the leasing company handles maintenance, repairs, and servicing, taking the worry off your shoulders. Whether you are an independent driver or a small business owner, this significantly reduces maintenance costs and ensures all the work is completed by an experienced professional.
Used Semi Leasing Companies
No matter which leasing company you go through, they all require some information up front. Typically, you have to provide the amount and type of vehicles you need, any customizing expenses, financial statements that are certified and prepared by an accountant, and a proposal for your repayment schedule.
Some leasing companies specialize in providing leases to those with bad credit or credit issues. While these companies streamline the approval process, it is important to note that monthly rates tend to be much higher. However, they also do not usually require a down payment.
If for any reason you decide to terminate your lease before it has ended, most companies require that you pay a penalty fee. This fee may be as high as 10 percent of the remaining total, in addition to the cost of returning the truck to the leasing company and insuring it for the drive. Full-service agreements have a higher cancellation payout. No matter what type of agreement you have, early termination means you do not get your security deposit back.
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How Much Does Leasing a Used Semi-Truck Cost?
Costs depend on the age of the vehicle, insurance, length of the lease, and the company you lease through. This general pricing guide provides an idea of what you can expect to pay when leasing a used semi-truck:
- The cost to lease a used semi-truck averages between $800 and $1,600 per month, though costs may be as high as $2,500 per month.
- Though a down payment is not always required, when it is, costs average around $1,000 to $2,000.
- Insurance (including collision coverage) has an average cost between $800 and $1,500 per month.
This lease calculator helps estimate the cost of a lease. Other costs, such as fuel and maintenance, are more difficult to determine, because they are directly related to the distance and frequency you travel. If you have a full-service leasing agreement, maintenance costs are covered by the lease provider.
Carrier Lease Agreements
In addition to leasing a semi-truck from a separate company, leasing a truck directly from the company you work for is an option. This is known as a carrier lease agreement and, while it might seem like a better option in name, is an agreement that needs to be carefully scrutinized.
Generally speaking, carrier lease agreements have no credit checks or down payments, but often also mean that you are no longer a driver for the company and take away your eligibility for benefits and tax withholding. The company takes the monthly payments directly from your paycheck and, at the end of the lease, the truck is either yours or you have the option to make a single payment to purchase it.
The OOIDA (Owner-Operator Independent Driver Association) says that carrier leasing agreements often harm drivers who sign without fully understanding the lease. For example, it is possible (and not entirely uncommon) for carrier lease drivers to not get enough miles to be able to make their monthly payments. And because the carrier owns the truck, they cannot use it to work elsewhere. Some drivers have even received negative paychecks if they didn’t make enough to cover their monthly payment, effectively making them owe their employer at the end of each work month. OOIDA has also reported that there are drivers who continued to be billed even after they walked away from the lease, even if the agreement stated there would be no penalty.
If you do decide to go with a carrier lease agreement, it is absolutely crucial that you understand exactly what the agreement stipulates. Make sure you know who is considered responsible for repairs, where that money comes from (will it be deducted from your pay? Does the company cover it?), and that the truck is in good condition at the start of the lease.