Owner/operators are in the position to make important business decisions that impact their future success. Your semi-truck can either be the means to your financial gains or a detriment—which direction you go depends on the choices you make around your truck. When it comes to buying versus leasing, there’s not a clear-cut answer. Your unique situation and goals play a large part in your decision to buy or lease a semi-truck. Ultimately, it comes down to the type of truck you want and how you prefer to spend your money. 

Buying a Semi-Truck as an Owner/Operator

The average price of a new or newer truck is well over $100,000. Do you have the capital to make this purchase? If not, take a look at financing. Either way, you’ll start to accrue equity. The purchase can also be used as a tax write-off; talk to an accountant or tax professional before you make the purchase to understand all the tax considerations. Additionally, you’ll save money on insurance as rates are often cheaper than those for leased vehicles. If you have good credit and the truck is not terribly expensive, you may not have to make a down payment, depending on the company issuing the loan.  

With a new truck, you’ll also get the latest in mechanical technology. This may mean saving money on operating costs and fuel, as many are more energy-efficient than older models. It’ll also come with a factory warranty which covers service issues and any problems that come up during the warranty period. 

If you want to purchase, but a $100,000-plus price tag is outside of your investment range, you can buy a used truck for as low as $15,000. Keep in mind that you may end up paying to keep it up and running. 

Leasing a Semi-Truck as an Owner/Operator

If you’re not able to buy your truck or you want to limit your financial risks, leasing may be the best option. A lease contract usually lasts anywhere from three to five years. Once your agreement is over, you’ll return the truck, and you can start another lease on a new truck. If you choose to break your lease before it ends, you’ll pay a penalty; the amount of the penalty is a lump sign that’s stated in the contract. 

Make sure you read the fine print on your lease agreement. Often, there are rules and requirements you must follow while you have the truck. Like a personal vehicle, you may have a limit on your mileage. When you turn the truck in at the end of the lease, you’ll have to pay for each mile you go over it. 

Lease Types

There are two types of lease: conventional or lease-to-own. With either, you don’t need to put down a large amount of money upfront. Oftentimes, you don’t need good credit; some leases don’t even require a credit check.  

A conventional lease has a set period of time in which you make monthly payments. You’ll have the freedom to walk away from your truck when your contract is over. Another benefit is gaining insight into the real-life costs of owning a truck without some of the hassles. Many conventional leases come with a servicing agreement for any maintenance or service needs that the vehicle needs during the extent of the contract. 

A lease-to-own agreement means you have the option to purchase the semi-truck at the end of the agreement. There will be a buy-out price set in the contract which may be negotiated before you sign the lease. With this type of lease, you’ll need to haul enough merchandise or goods to pay the monthly payment. If you don’t, the leasing company can repossess your truck.

What Should I do?

Commitment is the biggest difference between the two options to purchase or lease a semi-truck. A conventional lease can be a short-term commitment that may provide the freedom to walk away from your truck. Though you’ll spend less money upfront, you won’t build any equity. Overall, you may pay more money than if you were to buy it outright. Insurance is typically higher on a leased semi-truck than one that you’ve purchased. You also can’t make it your own by modifying or updating it the way you would if you owned it. 

Buying or leasing a semi-truck is ultimately a financial endeavor. But it doesn’t end there; it also comes down to your goals and long-term vision for yourself as an owner/operator.