Leasing or buying out right

[coolmc11]

Have question about buying a truck. Starting landscaping business in spring 2008. Have a loan out for business. If i have the money to buy a truck out right, should I, or should I lease a truck. Any pros and cons on leasing?

[bigw]

Originally Posted by coolmc11

Have question about buying a truck. Starting landscaping business in spring 2008. Have a loan out for business. If i have the money to buy a truck out right, should I, or should I lease a truck. Any pros and cons on leasing?

yeah i was in auto sales for years,first of all leasing is not much different then financing right now with payments being around the same,if you lease you better not bring it back all beat up or you will pay! normal wear and tear is ok but being in this type of business i dont think your normal wear and tear and their normal wear and tear will be the same.Not only that but leasing any auto is like rolling down your window and throwing your money out of it,If you are going to buy a new car every 2-3 years then maybe consider leasing but for real even then i wouldnt do it.Ive seen way too many issues with leasing! Now a days with rebates and low financing it dont pay to lease,your buy out at the end of a lease is never worth it,the truck will be worth half of what the buy out is.I may not be an expert on lawn care "yet" but i am an expert at auto sales do's and dont's and im telling you dont lease it! Dont fall for all the scams on leasing,you know the low payments and only pay for what you use...bull SH....IT !!! You will regret it!!

[dutchhook]

I'll basically agree with BigW. There's a way that a loan can wreck your debt ratios, where a non-capital lease won't, but you're a ways from that.
I thought your first question was the interesting one.. There is a zero percent chance that I would buy the truck outright, if you mean using the cash from your business loan.
The dealers will offer you a decent rate, and there are NO prepay penalties with a truck loan. If you're just drowning in the dough, you can always pay it off later. "Cash is King"
You just never know when and if you'll ever need the extra money.

[bohiaa]

The ole Lease vs. buy..........

In college all the programs they teach is the lease vs buy issue.

I wish I still had some of those programs to give you a real world view.

It's NOT a good ideal. Unless your a very large co. and you turn in these trucks every year or two for new ones.

and still at that rate it CAN be expensive.

However you can claim it both ways on your taxes.

in the long run you will save money from a purchase.
unless you get a truck and wreck it, or bluw up the engine

there are tons of varables, But the outcome is that it's money throwned away....

Good luck

[topsites]

Create a second company, buy the truck outright with your new co, then lease it to your main.
It's some type of a financing thing, I think you can get a tax break that way, I forgot how it works...
But otherwise, buy cash, be done with it.

[bohiaa]

Originally Posted by topsites

Create a second company, buy the truck outright with your new co, then lease it to your main.
It's some type of a financing thing, I think you can get a tax break that way, I forgot how it works...
But otherwise, buy cash, be done with it.

conflict of interest........ Not a good ideal

[NBI Lawn]

I would go find a newer used truck if you are just starting out unless your looking at a diesel. Used diesel trucks are selling with 50-100,000 miles for about $1000 less than what I paid for mine new. They hold there value too well.
The dealer lots are flooded with used trucks. People are trying to get good fuel mileage now.

[dutchhook]

topsites is on to something. It IS smart to do a second company for the expanded tax breaks, but ONLY after you've purchased $125,000 in equipment for your regular business (in 2008), and if you're just starting out, and have to buy $125,000 in equip to handle all your new accounts, then YOU'RE the one that I want to learn from!!

They were talking about discontinuing this for next year, but I just don't know.

The tax breaks work like this. After 9/11 when the economy went into the dumps, Bush passed a law that allows companies to write off the first $125,000 in equipment that first year instead of depreciating it over 3,5 or 7 years. That meant that you could buy $100,000 in equipment on lease in March, pay $8,100 in lease payments and receive a $25,000 tax break that same year. It always catches up, but it does help cash starting out. You WILL end up paying for that tax break over the long term though.

Best of Luck!

Steve Hoogenakker