When searching for a vehicle, one of the first decisions you should make is whether to buy or lease. Although buying a vehicle may offer some advantages there are situations when renting work trucks is the more practical option.
Monthly Rental Fees
If you plan to use the vehicle on a short-term basis, leasing gives you the advantage of paying low monthly payments compared to buying, where you must pay for the total value of the car or truck. You have the flexibility of terminating payments once it has served its purpose saving you money in long term maintenance costs. When purchasing a vehicle, its value starts to depreciate so paying only for the time you need it becomes a more affordable and flexible solution.
When you decide to buy or lease a car, a down-payment is usually required. If you only have a small down payment saved up, leasing may be the better option. Otherwise you will need to get a loan to finance a vehicle purchase. The value of the loan is based on the total cost of the vehicle, minus the down payment and trade-in value. When you rent, you’re only paying the depreciation that occurs during the lease term (typically three years), plus fees. At the end of the lease term, you simply return the car to the dealership.
As a car or truck ages, it will show signs of wear and tear. If you are leasing, you do not need to worry about long term maintenance costs. You simply turn in the old vehicle and start a lease on a newer model. You also have the option to choose the make and model you prefer depending on your needs. Do check your lease contract because you may be charged if the wear and tear is deemed “excessive.”
There are also tax advantages to leasing. If you used the car for your business, then you may be eligible for tax deductions based on how much time the car was used for business operations. To get tax benefits for business use you must be able to prove the car is being driven at least 50% of the time for business purposes.
Off Balance Sheet Financing
If you are planning on getting other loans, then leasing a car gives you a form of “off-balance sheet” financing which may not add to your borrowing ceiling for other loan qualifications. You should be aware however that leasing has its limitations. For example, you do not own the car if it is leased, so you are not acquiring an asset.
A leased car needs to be returned to the same state that it was lent to you. You cannot make modifications to it, or do with it as you please.
In the eventuality that you no longer need the vehicle, you may end up paying costly pre-termination fees. In cases like these, some people have resorted to finding other people to take over the lease. It is harder to find people to continue a lease however, than it is to find buyers for a car you own.
It is possible that the insurance premiums for leased cars would be higher than purchased cars because of the risks assumed by the lender.
When you own a vehicle, mileage is not something that you often think about. A rented vehicle, however, would have limitations on the number of kilometers it can travel or may not be allowed to travel beyond areas that were agreed upon. Any overage would result in additional fees.
Do you need work truck rental providers for your business? With a fleet of over 800 vehicles and growing, Thomas Solutions has a wide array of work vehicles for lease or rent. Whether you are in Hamilton, Niagara, GTA, or anywhere in Southern Ontario for that matter, we would welcome the chance to see if we can help you with your truck rental or fleet leasing needs. Contact us today.