Commercial truck leasing can be a great way to get the equipment you need without paying for it upfront. However, many costs come with this type of lease. In this blog post, we will explore 10 of these costs so that you know what to expect when considering commercial truck leasing.
1. Acquisition Fees
When you lease a commercial truck, one of the costs is acquisition fees. These are just leasing company fees that cover things like administrative expenses and insurance premiums. The leasing company will not collect an acquisition fee if you purchase the truck at the end of your lease.
Another cost involved with commercial truck leasing is depreciation. This refers to the loss of value or money that results from using equipment for an extended period. Essentially, your asset (the lease) has less worth at the end than it did at first because you have used it and worn out some parts in the process. The specific amount of depreciation will depend on the life expectancy of the truck and how much use it gets.
Depreciation costs can be tricky to calculate, so commercial truck leasing companies typically offer a simple lease calculator to put in your desired information for an estimate. Then, they’ll propose an estimated monthly payment based on this calculation.
3. Financing Costs
Part of the cost involved with commercial truck leasing is financing costs. The company will typically use a bank or other financial institution to finance your lease, and they’ll charge you interest for this. If you are also paying acquisition fees, you can combine these two things into one monthly payment that covers both items together. This is usually done because it’s easier for the lease company to pay one bill each month instead of two.
4. Insurance Premiums
As with any vehicle, you will need to pay for insurance premiums when leasing a commercial truck. This is one of the highest costs of commercial truck leasing and can vary greatly depending on what kind of coverage you choose (the more comprehensive your plan, the higher it will be). You should always check various insurance providers before leasing a commercial truck so you can find the best deal.
If you are using your insurance policy to cover any damages, it is high enough for this purpose. The leasing company will not pay out of pocket if there is an accident, and they will also charge penalties or fees if their deductible payment has already been used up.
5. Maintenance and Repairs
Part of the cost involved with commercial truck leasing is maintenance and repairs. As you use your leased equipment, it will eventually need to be fixed or maintained somehow. This can result in charges that come out of your lease payments if insurance covers them (for example, windshield replacement). You should also know that if you use your maintenance plan, the leasing company may still charge an additional fee to cover it.
6. Payment Method Fee
One of the costs of commercial truck leasing that many people don’t know about is the payment method. It can be challenging to find a company willing to lease you their equipment if you cannot make automatic payments through your bank account or credit card information.
This also makes it easier for them because they will only have one payment to make instead of tracking down payments from your business. This is especially important if you are using a third-party financing company, as they will need an easy payment method for the transaction process to go through correctly. The leasing company may require that you have a credit card on file with them and authorize automatic debits from your bank account.
You must set up a straightforward arrangement with all parties involved about who will pay for what type of repairs and when. The last thing you want is surprise charges because there was some misunderstanding along the way. It would be best if you discussed this before the lease begins. Worried about your existing contract? Want a second opinion? Let Efficiency help!