things to think about when leasing a new truck

[Cummins Cowboy]

first of all IMO leasing is a terrible way to get into a new truck, even for me as a business owner, who can write off the whole payment, its a raw deal. The best way to tell if its a good deal or a bad deal is figure out the total amount of money you are paying into the lease and then look at your buyout, next go to an amortization chart, they are available online, figure out the total of your payments then figure out how much you will owe if anything in 4 years, a typical lease term, in most cases it will cost you thousands, yes thousands more to do a lease, the amortization chart will not lie, Also another thing in my case I was over the miles and had some equity in my lease, so I had planned on buying the lease out and selling it as soon as the lease was over. Well I found out that I had to pay sales tax on the buyout even though I was reselling it, they would not release the title to me without me paying the sales tax, I tried getting a refund from the state, but no, this is aparantly the case in most states, it doesn't matter that you payed sales tax on each and every lease payment you made, so I got wacked for another 1k just to get out of the deal, never make a deal involving a bunch of money without sleeping on it, I am writing this as I had to see anyone pay more than they have to



On edit: don't count on the lease company lowering the buyout like I have heard from some people, DC would not budge on it, they may make a deal with a dealer, but not me, I even told them I planned to turn it in and waited till one day before the lease term was up, to overnight payment, 3 weeks later I get the title, but thats another issue

 

[BTighe]

after talking to dave smith they said they could set me up on a $600 payment through leasing. i got my financing locally and my dealer got me 84 mo term. 577/mon and its not leased.

i was getting drunk in an airport bar one night and i saw a lady on tv that said leasing is one of the worst things you can do finacialy. she said the only thing you get out of it is you get to drive a car you cant afford. in the big picture, those around you notice for a second then forget as they drive off so who gives a crap.

what is the benifit of leasing for a business? i thought about this for my business(flooring contractor) but couldnt make the numbers work out in my favor.







as far as i see, the price i pay for my truck wont be worth it till its payed for.

 

[Bernie]

Business Lease

There are independent finance companies that I've seen advertised in the back of AutoWeek that do "Business Leases" that work out better for some small business owners.



They are essential a loan with a balloon payment at the end (usually 10 to 25 percent of the total borrowed). That allows you to make a payment similar to a standard loan and write it off as a lease.



The only down side is you need to plan ahead for the balloon payment at the end. You are committed to it, and these companies will not take the truck back.



With that said, I didn't lease my truck. Because it is over 6000 lbs, I am able to write it off as equipment. The dealer got me financing that was . 25 percent lower than my bank and the same as a credit union, so I used their financing and did a standard purchase.



If I buy a car (less than 6000 lbs) and want to use it for business I probably would look at the business lease option. Other than that, the numbers worked out better for me to buy.

 

[BarryG]

The question about for business is that with a lease you can expense the whole lease payment each month. As opposed to buying the IRS considers it a capital expenditure and it is subject to depreciation. So the only amount you get to write off is the depreciation each month which more than likely is going to be less than a lease payment (and the interest expense if a loan was used). Leasing typically has a lower payment so your cash flow is not hit quite as much. However the past few years many companies have been eligible for accellerated depreciation on new equipment up to 100k. Not sure if they extended that rule to this year or not but in essence you could if all other conditions are met write off all the depreciation for a new vehicle in one year.

 

[zstroken]

Leasing can be a good option. We purchased a 2002 Overland Grand jeep cherokee. I got it $1000 under employee price, plus put $2500 down. 2 years later we when to trade it in they offered me about $500 over what I owed. They offered a decent price too, it wasn't a low ball offer. We ended up leasing a vehicle that had about 1800 miles on it(demo) They gave me $2500 over payoff(I broke even). We leased a 2004 durango limited, had a sticker about $3,000 higher than the jeep. Payment is less, than the jeep and at the end I hand them the keys, and get about $1300 back. This is the rebate for the extra miles we bought. If you leased an SUV around 2003 -2005 you did the right thing, the resale value for the SUV is terrible right now. I am glad I leased the durango. That being said we probably won't lease another vehicle. Now on the cummins they hold their value very well, so add a year to your payments and keep the vehicle.

 

[MMeier]

after talking to dave smith they said they could set me up on a $600 payment through leasing. i got my financing locally and my dealer got me 84 mo term. 577/mon and its not leased.

i was getting drunk in an airport bar one night and i saw a lady on tv that said leasing is one of the worst things you can do finacialy. she said the only thing you get out of it is you get to drive a car you cant afford. in the big picture, those around you notice for a second then forget as they drive off so who gives a crap.

what is the benifit of leasing for a business? i thought about this for my business(flooring contractor) but couldnt make the numbers work out in my favor.







as far as i see, the price i pay for my truck wont be worth it till its payed for.

84 months!!!!! :--)

 

[JLovas]

The question about for business is that with a lease you can expense the whole lease payment each month. As opposed to buying the IRS considers it a capital expenditure and it is subject to depreciation. So the only amount you get to write off is the depreciation each month which more than likely is going to be less than a lease payment (and the interest expense if a loan was used).

Remember Section 179 though. I paid cash for my pickup in 2004 and expensed the full purchase price because its a business vehicle (I farm). The only thing that could bite me is if I ever sell it (which I won't), then I get hit with depreciation recapture.

 

[BTighe]

cant afford it any other way. my old 12v was fun to bomb but it became to undependable for work and was killing me in down time and repairs. then the p-pump went and i gave up.

that truck averaged me 650/mo for 2 years.

my new truck payment is 75 less. lets just hope not much goes wrong.