Having a semi-truck for your use can give you a great sense of freedom. There are two main ways to go about – purchasing or leasing a semi-truck. The option can be expensive, especially if you do not have all the money you need for the cash price. Besides, owning a semi-truck can be demanding, requiring you to pay for maintenance and repairs.
Luckily, several semi truck leasing companies can give you the vehicle you need without too many conditions. They make it possible for you to act as an independent trucking operator, resulting in improved income. In short, you no longer have to act as a company driver, working on behalf of a certain company. Instead of being paid per mile, you can operate the truck as a small business venture, as you make monthly payments on it.
How Does Semi-Truck Leasing Work?
Semi-truck leasing refers to the arrangement in which you get a truck from a company for a given period. You can then operate the truck while making regular payments. At the end of the lease period, you can return the truck to the leasing company or decide to purchase and own it. The lease usually comes with mileage restrictions to ensure that the truck is in perfect condition when you bring it back. As part of the contract, semi-truck leasing companies may cover the vehicle’s repair and maintenance costs.
Even though leasing a truck has its benefits, it also comes with some disadvantages that might discourage you from trying it. The contract has restrictions on carriers to work, mileage, and other aspects that make it impossible for you to operate the truck profitably. That calls for great care when choosing the company from which you will lease a car.
Advantages of Semi-Truck Leasing
Semi-truck leasing has several advantages compared to working as a company driver or purchasing the vehicle straight away. They include the following:
1) Low Down Payment
A brand-new semi-truck costs anything from $80,000. On the other hand, a used semi-truck starts from $30,000. Whether you choose a brand-new or used truck, the cost can be too high for you to manage. Therefore, you can save yourself the stress by leasing the truck. Whether you get a new or used semi-truck, the leasing company will require you to make a small down payment. After that, you can make small, convenient monthly payments to the end of the lease period.
2) Short-Term Commitment
Semi-truck leases usually last three to four years, which doesn’t hold you down financially for too long. Besides, you can terminate the contract before the end of its term by paying the penalty. Whether you take the contract to the end or terminate it prematurely, it is a short-term commitment. You can use it to test whether a trucking business can work for you. If you discover that it’s not working, you can withdraw from the contract before losing too much money. However, if it works, you can go ahead and buy a new truck for the business.
3) Minimal Credit Checks
Even with bad credit, some semi-truck leasing companies can still give you the vehicle you want. That’s because most companies do not carry out credit checks before leasing to you a truck. Where a company does a credit check, the purpose is to gauge the risk of investing in you. The results of the credit check usually determine the amount of the periodic payments. If you have good credit, you will pay less than someone with awful credit. But don’t worry. If you can make the payments regardless of your credit score, this is a great way of getting your semi-truck. It would help if you asked the leasing company how much you would pay before signing a deal. Why would you sign a deal whose obligations you cannot fulfill?
4) Buyout Options
If your lease has a buyout option, you can purchase the vehicle at the end of the lease for a significantly reduced cost. The buyout clause is part of the contract, allowing you to pay an agreed amount to become the vehicle’s owner. Surprisingly, it can be a paltry amount determined by the duration of the lease agreement. If the cumulative amount you have paid so far is substantial, the buyout payment will be very minimal.
5) Lease Completion Pay-outs
Some semi-truck leasing companies offer pay-outs for anyone who completes the lease. The pay-out can be in the form of weeks when you are exempted from paying or money. For example, one leasing company pays $18,000 to all clients completing a 3-year lease period. Once you get the bonus paycheck, you invest it in a new lease or use it for any purpose.
6) State-of-the-Art Trucks
The only way most people can get a state-of-the-art truck is by purchasing a brand-new one. However, that doesn’t always have to be the case. Some leasing companies have the latest trucks, giving you the latest safety features. Since the lease accounts for the expected depreciation, you only get to pay a fraction of the cost. When the lease ends, you can move to a newer, better semi-truck.
Disadvantages of Semi-Truck Leasing
While leasing a semi-truck is an excellent option, it comes with several disadvantages. Most of the drawbacks are related to how leasing companies handle their clients. The following are some of the major disadvantages of semi-truck leasing:
- Huge Costs: Some truck leasing companies require clients to make large down payments and repair costs, disadvantaging the drivers.
- Strict, Confusing Contracts: Some semi-truck leasing contracts are strict and confusing, offering drivers minimal benefits. If you do not read the contract carefully, you may end up with a bogus contract.
- Little Choice on Repairs: Most leasing companies require that drivers repair their trucks at company-owned facilities. These repair shops often overcharge the drivers, leaving them with little or no choice.
- High Minimum Limits for Repairs: Leasing companies often require independent truckers to spend a high minimum amount to access funds for tires and repairs. Thus, the drivers find it difficult to access company-provided repair services.
- Overcharge on Fuel Taxes: Many leasing companies require independent drivers to pay astronomical amounts in fuel taxes.
- Unreasonable Insurance Fees: The insurance fees charged by leasing companies is often unrelated to the services they provide.
The 10 Best Semi-Truck Leasing Companies
Several semi-truck leasing companies exist across the United States, which you can approach whenever you wish to lease a truck. The following are detailed reviews of some of these companies:
1) Home L.R.M. Leasing
Home L.R.M. leasing company is located in Greensboro, NC. It was established in 1980 as a family-owned business specializing in leasing semi-trucks. If you lease a truck from this company, you will pay a $5,000 to $8,000 downpayment and monthly payments starting from $1,200. Hiring a semi-truck begins with you signing up and taking the truck for an inspection. If you are satisfied with the car, you can keep it. Otherwise, you can return the car for a refund of your deposit. The company gives you access to its repair shops at cheaper rates. Besides, you can choose if you want weekly, monthly, or semi-monthly payments.
2) California Semi-Truck Leasing
California Semi-Truck Leasing targets clients in Los Angeles, San Diego, and San Francisco. The company is located in Oakland, California and specializes in leasing commercial and business semi-trucks. It goes further than leasing trucks but provides clients with the opportunity to become owner-operators. The company has a variety of trucks and can efficiently serve all client needs. It also prides itself in offering leasing services even to clients with bad credit. You can therefore get a semi-truck and use it to make monthly payments and rebuild your credit.
3) Continental Lease – Truck Leasing
Apart from leasing services, Continental Lease L.L.C. provides truck purchase and finance options. The company doesn’t do credit checks or require a down payment. Clients also get vehicles without the usual mileage restrictions and balloon payments. Besides trucks, the company stocks cars, jeeps, sports utility vehicles, and minivans. The company provides leases with attractive tax advantages and tailor-made to customers’ cash flow requirements. It is located in Indianapolis, IL and has branches all over the United States.
4) Lone Mountain Truck Leasing
Lone Mountain Truck Leasing is the go-to place for individuals looking to make little or no down payments and minimum monthly payments. The company is situated in major U.S. cities like Las Vegas, NV, providing clients with affordable semi-truck leases across the state. It has an in-house finance company that makes it easier for you to qualify for a lease regardless of your credit history. The company is more interested in your driving experience, work history, and carrier. You can either get in touch with them over the phone or in person.
5) Semi-Trucks for Lease – O.T.R. Leasing
O.T.R. Leasing specializes in big-name semi-truck companies like Freightliner, International, Volvo, Kenworth, and Peterbilt. It provides financing to truckers looking for independence across the United States. Apart from getting access from a truck, leasing from O.T.R. gives you numerous educational and support programs. The company makes sure that you succeed on the road as an independent trucker. It has several attractive short-term truck leasing deals for anyone looking to start as an independent trucker.
6) M.C.H. Leasing and Rental
M.C.H. Leasing is a privately-owned company by PacLease Network that provides full-range services and contract maintenance programs. It has over 480 leasing locations across the United States, which means you will likely find one near you. You can easily rent a truck by filling in a form. A customer service representative will take up your case, call you, and make an offer. For business clients, the company takes time to analyze your needs before offering you a deal. You may get short-term or long-term semi-truck rental depending on your needs.
7) Semi-Truck Leasing with Ryder
If you haven’t tried Ryder for semi-truck leasing, you are probably alone. The company has a nationwide network of over 800 service stations in the United States. Ryder semi-truck leasing services give drivers access to the vehicles they need to operate independently of trucking companies. They have a variety of vehicles from industry leaders, helping you build your business from scratch. If you are looking for box trucks, straight trucks, cargo vans, or refrigerated vehicles, Ryder is the place to go.
8) H.E.C Leasing L.L.C.
H.E.C Leasing L.L.C. is a Shelbyville, TN based company that operates in multiple locations across the country. It provides financed leasing of semi-trucks to anyone seeking to work as an independent trucker. Clients can lease a truck by filling in a form, after which a customer representative will reach out to them. You might be asked to fill in details like the vehicle’s make, model, year, type, and whether you need an appointment. As a family-oriented small business, H.W.C Leasing L.L.C. strives to meet clients’ needs and help them succeed.
9) Wyatt Leasing L.L.C. Semi-Truck & Trailer Leasing Company
Wyatt Leasing L.L.C. is a company based in Cashmere, WA. It offers semi-truck leasing services tailor-made for client needs. After making the no-fees application, you will get approval within 24 hours if you have no issues. It services the entire U.S. market in multiple locations in many of the major cities. Both small and medium-sized businesses can access secure, flexible, and fast leasing terms with competitive rates. Whenever you have issues with your truck, you can reach out to the company around the clock.
10) Compass Truck Rental and Leasing
With Company Truck Rental and Leasing, you can obtain a new semi-truck at fixed costs devoid of deprecation losses. Once it has leased you a truck, the company provides round-the-clock support to help your business grow. For sure, there is no better way to gain flexible leasing deals. The company’s headquarters is in Burr Ridge, IL; even though it operates in multiple locations across the U.S., it can give you access to flatbed, dry vans, refrigerated trucks, and drop decks.
How to Get a Semi-Truck Lease with Bad Credit?
With a less than impressive credit score, it can be hard for you to lease a semi-truck. Most leasing companies often use credit scores to determine how risky a customer is. However, you can still qualify for a lease if the leasing company is ready to assume the risk. In that case, you will end up paying more in monthly fees. Here are several ways you can qualify for a semi-truck lease with poor credit:
- Placing a Larger Down Payment: If you want the leasing company to overlook your bad credit, offer a larger down payment. That means you should be ready to save for a while before approaching the leasing company for a lease. A larger down payment not only expedites the lease approval but also results in lower monthly payments.
- Choose a Recently Repossessed Truck: Companies often repossess trucks from customers who default on their lease payments. Instead of choosing a brand-new truck, go for one that was recently repossessed, as the leasing company is more likely to grant you a lease on it.
How to Get and What You Want from Semi-Truck Leasing Companies?
Leasing companies often impose different restrictions when leasing out their semi-trucks. Depending on the details of the contract and the company’s internal practices, a lease deal may drive you into financial trouble. However, there are certain things you can do to avoid digging a financial pit when you lease a truck. Here are a few suggestions:
1) Ask for Referrals
Do you know of your friends who work as independent truckers after leasing trucks? Ask them about their experience and if they can recommend to you a reliable truck leasing company. Despite how sentimental some truckers might be, they will likely give you a few tips on how you can go about leasing a truck. They will also tell you a lot about the most reliable leasing companies so that you don’t end up burning your fingers. After getting their views, make a list of the companies you think can give you a good deal.
2) Carry Out Independent Research
As you seek to find an excellent leasing company, avoid taking the words of other truck drivers. After making a list of companies, probe into each of them to find out how reliable they are. Most companies base leases on the needs of the individuals and a client’s ability to negotiate. Besides, the companies may have overhauled their leasing policies, giving you a chance to enter into a better deal. Apart from checking the companies’ websites, read online reviews to know the sentiments of previous customers.
3) Read and Understand the Contract
The contract usually comes after you have negotiated with the leasing company and reached an agreement. Be sure to read the contract and only sign if it reflects details of your negotiations. If you are not careful, some companies may try to sneak in certain terms to exploit you or make it impossible to make periodic payments.
Read through the contract one sentence at a time. If you find anything you cannot understand, ask for an explanation from the leasing company. Alternatively, you can ask a friend with vast knowledge about contracts to help you interpret the details in the document. Focus on the terms of the down payment, cargo insurance, maintenance costs, and towing costs. If you don’t understand anything in the contract, don’t sign.
4) Determine if Leasing a Semi-Truck Is Profitable
The main purpose of leasing the semi-truck is to start a trucking business, profit, and grow financially. Therefore, you must determine if leasing the truck is profitable. All you need is to capture numbers involving the expected revenues and expenses. Some of the most common trucking costs include truck fuel, cargo insurance, mileage fees, permits, licensing, tires, fuel surcharges, legal fees, tolls, parking, maintenance, unloading, truck washes, and other expenses. You can then match these expenses against the expected income to see if you get a profit.
5) Consider Tax and Insurance
As the owner of a new trucking business, some of the responsibilities that your employer had carried will fall on you. For example, operating the business makes you liable for all the taxes. Also, it would help if you took control of your health, life, dental, and vision insurance. By considering all of the likely expenses, you are likely to prepare yourself for the uncertainties of owning a trucking business. Then you can sign a semi-truck leasing agreement confident that you can run the business.
Frequently Asked Questions (FAQ)
How much does it cost to lease a semi-truck?
It costs between $1,600 and $2,500 per month to lease a brand-new semi-truck. If you want a used truck, you will pay anything from $800 to $1,600 per month. Remember that a brand-new truck also attracts a down payment, which varies from one leasing company to another.
Is leasing a semi-truck a good idea?
Yes. Leasing a semi-truck is a good idea since it is less risky than purchasing one. You will be required to pay a monthly fee, which is cheaper than buying the truck with financing.
What credit score do I need to lease a semi-truck?
You need a credit score of at least 600 to lease a semi-truck-the higher the credit score, the better the rates and terms of the lease. So, a credit score of 700 and above is much better.
Semi-truck leasing is an excellent way for cash-strapped truckers to lay hands on the vehicles they need. Since semi-truck leasing companies have different terms of the contract, you must choose the right one. That entails doing extensive homework to determine which company is right for you. Once you find the right company and understand the contract, don’t hesitate to sign on the dotted line. Who knows? You might just have started a business that will propel you to greater financial heights!