Standard Box Truck Financing

Box Truck Loans vs. Box Truck Leases

One thing to consider is whether you want to get a loan or whether you want to lease your new truck. There are pros and cons to both approaches.

Benefits of a Box Truck Loan

• Ownership: Once you have paid off the loan, you own the truck outright. This gives you the freedom to keep the truck for as long as you need to, or until it reaches the end of its natural life. Alternatively, you can sell it to recoup some of your investment, putting the money towards a new truck. You also have the freedom to modify the box truck to fit your precise needs.
• Potential Tax Advantages: In some states, you can deduct the interest you pay on the loan (although not the principle) and/or claim depreciation on the box truck. Both of these can lower your taxable income.
• Potentially Lower Long-Term Costs: While the upfront costs are higher, given you have to make a down payment, the long-term costs can be lower. You avoid lease-end fees, and potential maintenance costs you are forced to pay by the lessor.
• Builds Equity: Given the high cost of a large truck, you can use its value to build equity. You can then use it as collateral for a business loan in the future if you wish.
• Sense of Security: Owning your trucks gives you more control over your commercial assets and more security.

Benefits of a Box Truck Lease

• Lower Upfront Costs: With a lease, you typically don’t have to make a down payment—just pay a security deposit. This can be particularly valuable for businesses with low cash flow or bad credit. It can be an easy way to acquire multiple box trucks.
• Predictable Monthly Payments: Loan payments can change with interest rates. Lease payments are typically fixed for the entire term, making it easier to budget and manage cash flow. You will know exactly how much you owe each month.
• Potentially Lower Maintenance Costs: Depending on your lease agreement, some routine maintenance might be included in the lease terms. This can be a good deal financially, as well as saving you the time you might otherwise spend arranging maintenance services.
• Access to Newer Vehicles: Leasing allows you to acquire a new truck every few years, meaning you can keep up with technological and safety features, as well as benefit from increased fuel efficiency. New trucks can enhance your fleet’s image, reduce maintenance costs, and even attract drivers.
• Flexibility: In some cases, leases are more flexible, allowing you to choose the lease term and take options to upgrade at the lease end.
• Focus on Core Business: Leasing trucks allows you to focus on your core business, rather than worrying about maintenance, depreciation, or resale value. With a loan, you own the box truck outright after you pay off the amount, and can keep, sell, or customize the vehicle. With a lease, you’re renting it for a predetermined period and will be expected to return it in good condition. Upfront costs are different. With a loan, you have to pay a down payment, which might be significant. With a lease, you only have to pay a security deposit or advanced payment. Long-term, owning the truck through a loan allows you to benefit from appreciation in its value or deduct depreciation from your taxes. Leases have lower monthly payments, but you don’t build equity. The primary advantage of a loan is ownership, while the primary advantage of a lease is lower payments.