What are the costs involved in commercial truck leasing?
To buy or to lease a commercial truck? Each business owner and manager are responsible for making their financial decisions smartly to keep the business thriving. Whether you are a startup or building out an existing fleet, there will be a question to ask yourself.
Is it better to buy a truck & slowly pay off the loans? (OR) To lease the truck with the benefits of maintenance & fleet management services?
For any business, making the profit and saving the extra cost on expenses would be the main priority. Probably, you might know the cost of buying a truck. But what is the cost associated with leasing a commercial truck?
In today’s blog, you will find a complete guide that answers all your questions. So, with no delay, let’s dive into it!
Cost of leasing commercial truck
Cost is one of the crucial factors for both the business owners and fleet managers. Wherein, cost is the main value at the end of the day for all the business. Leasing trucks is often chosen by business people as a viable option to put commercial trucks into use without having to pay more at initial costs.
There is no fixed price for what is the cost for a commercial leasing truck. Instead, you have a range that mostly depends on various factors, such as-
- The model & class of the vehicle
- The Age of the vehicle
- The size of the vehicle
- The Services included in truck leasing contract
Cost of Commercial Vehicle Insurance
The cost of Commercial vehicle insurance is one of the important factors. Commercial vehicle insurance can cover a wide variety of vehicles, which usually have higher liability limits.
Commercial vehicle insurance easily overshadows the actual cost of your vehicle lease. The cost of commercial vehicle insurance would be identical if you buy a truck / chosen to lease.
Cost of fuel in a leased commercial truck
Another huge factor of your monthly expense is your fuel consumption. It totally depends on what type of vehicle you are leasing and how efficient it is with fuel.You can roughly estimate the amount that you need to spend on fuel each month with the following equation.
Monthly Gas Cost = (daily miles/mileage) * gas price.
Cost of Leased Vehicle Maintenance
The next aspect of leasing commercial truck expenses would be routine maintenance.The routine maintenance prices are something depend on various factors that you& your leasing truck vehicle company should agree on.
You will have to weigh up the age and mileage of the vehicle where older vehicles would probably cost more. However, in many truck leasing companies, you may find that vehicle maintenance is included or provided at a discount for fleet vehicles and leased trucks. In this way, truck leasing service could reduce the cost of your regular maintenance & other major repair needs.
The truck leasing company always ensures to make their vehicles stay in top condition. Thus, getting a leasing service from a fleet vehicle company is the wise choice to avoid spending money. This would be in the best interest of you and the truck leasing company.
Commercial Vehicle Lease Payments& Tax Deductions
Finally, commercial taxes are the critical expenses that everyone should consider. When you purchase a truck, you may deduct the interest of the loan. However, with leasing you can deduct the entire cost of every leased month from your business tax. This helps you to lower the burden of your overall business taxes.
Thus, Commerical truck leasing is considered as a deductible business operating expense. In this way, commercial truck leasing could save you from ahuge portion of your monthly expenses.
When it comes to commercial truck leasing, flexibility is one of the most valuable assets you’re going to enjoy. Leasing a truck is an excellent way to reduce the upfront costs.
Lease agreements and truck leasing prices will vary from one fleet vehicle company to another. But, remember to do proper research to find the best deal to save your money & have the highest return on investment possible!
Fraikin is a leading commercial and vehicle leasing company in Saudi Arabia. If you are looking for any vehicle rental or truck leasing, contact us.