Commercial Truck Rental vs. Leasing: Understanding the Difference
Published Feb 22, 2021
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Commercial trucks play a vital role in many businesses. From companies that haul goods across the country day-in and day-out to businesses that rely on the use of a truck to complete a specific project, these workhorses are an integral part of getting work done.
At Transwest, we offer a quality selection of commercial trucks, including the option to lease a truck or even rent one for a shorter frame of time.
If you are interested in commercial truck rentals and leasing options, and you aren’t sure which option is right for you, this article will walk you through the differences between the two, as well as the pros and cons of each.
Commercial Truck Rental
What is Renting?
For those who need a commercial truck for their business but do not want to purchase one upfront, renting might be the right solution. A commercial truck rental allows you to utilize the vehicle for a short period in exchange for paying a higher daily cost or monthly cost. Keep in mind that the total cost will vary dramatically based on the type of truck you are renting and the use of the truck.
Ultimately, a truck rental is a short-term agreement between you and a rental company allowing you limited use of their vehicle.
The Pros
Renting can be a smarter and beneficial option for businesses that need access to a commercial truck for an upcoming job. The following are all benefits of opting for a truck rental rather than a lease:
- Rent to Purchase Options: Rentals are best for short-term or project-based use with common rental contracts ranging from six to twelve months. Rent to purchase options allow you to apply some of your rental payments into equity for a down payment if your project ends up being a long-term use case.
- No Major Upfront Investment: While rentals do require a one-month deposit upfront, renting a truck does not require a massive investment of funds. This makes it a good choice when capital is tight.
The Cons
While renting is a great fit in certain situations, there are some finer points to consider when choosing a commercial truck rental. The following are all things to keep in mind when deciding between a lease or a rental agreement:
- Expensive Over the Long-Term: While a commercial truck rental is a good short-term choice, it is not ideal for long-term use. The monthly rental costs will add up quickly, making a lease or purchase a better choice for ongoing use.
- No Equity Built: When you rent a truck, you will not receive back any of the money you put into the truck. However, you can mitigate this by opting for a rent-to-own contract.
- Limited Use: In some cases, a rental agreement might limit how you can use the truck, as well as put limitations on mileage. Also, rental contracts might include hourly use limits.
Commercial Truck Leasing
What is Leasing?
A hybrid between purchasing a commercial truck and renting it, leasing is a great option for those who need the vehicle for long-term use, but do not have the means to purchase the truck outright.
According to CDL.com, the average commercial truck lease payment is anywhere from $800 to $2,500 per month. Compare this to the daily cost of a rental over a month, and you are saving a lot of money that can be used elsewhere in your business.
Remember, the cost of a lease will be highly dependent on the type of vehicle being leased, as well as your credit score, the lease terms, and current interest rates.
A major difference between leasing and renting a commercial truck is that many lease agreements come with the option of a lease to own. Lease to own allows you to build equity in the truck over time, with the option to purchase the remainder of the truck at the end of the lease agreement. In contrast, a rental will never allow you to build any equity in the vehicle.
The Pros
For some businesses, a truck lease is the best solution. The following are all benefits of the option for a commercial truck lease:
- Lease to Own: Many leasing options offer the opportunity to lease to own. This allows you to slowly build equity in the vehicle, with an option to purchase the truck at the end of the agreement.
- Less Money Down: Unlike buying a commercial truck, leasing often requires little to no money down, making it a great choice when capital is tight but you need a longer-term solution than renting.
- Better Pricing for Long-Term Use: Compared to renting, leasing is a much more affordable long-term option.
- Access the Newest Fleet: Leasing allows you to access the latest models of commercial trucks on the market. Unlike purchasing a truck outright, which often limits what inventory you can afford, leasing makes newer makes and models accessible.
The Cons
While leasing a truck has its benefits, there are also a couple of drawbacks to consider before signing on the dotted line:
- Credit Requirements: Leasing does require a credit check. This can be a limiting factor for those with poor credit scores. However, it is worth noting that, in the case of commercial trucks, many rental agreements also require a credit check.
- Long-Term Commitment: A lease is a longer commitment than a rental. For short-term projects or one-time jobs, this might not be ideal.
Talk to Transwest About Commercial Truck Rentals and Leasing
Whether you decide to lease, rent, or purchase a commercial truck, Transwest is here to help. We offer a quality inventory of commercial trucks, backed by the brands you know and trust.
Shop top manufacturers, such as Autocar, Foremost, Freightliner, Lohr, Western Star, and more. At Transwest, we know that quality matters, which is why we carefully vet all trucks on our lot. Talk to our team today about our outstanding financing options and determine whether renting or leasing is right for you.
