Leasing A truck for Plowing or Lawncare

Discussion in 'Rental Equipment' started by ein999, Feb 23, 2009.

  1. Nick's Lawn Care

    Nick's Lawn Care LawnSite Senior Member
    Posts: 662

    I believe since he is leasing them he does not have to pay to maintain them and so onÂ… He just gives them money and he uses them. I do not know his contract or any details on it. I do know he leases through enterprise though, all of his trucks have the little E on the corner of the tailgate. His business is very successful and his wife does not give him any money to run it, how ever if his company goes south he will still be fine. That enables him to make more risky decisionsÂ…

    Nick
     
  2. JNyz

    JNyz LawnSite Bronze Member
    Posts: 1,086

    I quick example of a lease vs. outright buying.

    Lease of a 40k truck.

    Lease rate 550.00/month for 36 months = 19,800.00

    Buy rate 780.00/month for 5 years = 46,800.00 and you own it.

    After 36 months you have 19,800.00 invested in a lease.
    After 36 months you have 28,080.00 invested in a buy.

    What is the truck worth after 36 months? or 60 months?

    After 6 years the person with the new truck invested 46,800.00 plus maintenance and repairs.

    The persons who leases walks away with nothing and pays no extra charges but had two new trucks in 6 years and the one who buys has a 6 year old truck worth 10-15,000.00.

    The one who leases has more tax advantages so I would say it is a wash if you get the right lease price.
     
  3. whoopassonthebluegrass

    whoopassonthebluegrass LawnSite Platinum Member
    Posts: 4,214

    I see your argument in the #'s... except that you treat the situation as having a "given" that the person who bought the truck is needing to sell it when they're done.

    The fact is, after 6 years, most trucks are still gonna be in great shape, and if the truck is kept, THE PAYMENTS END. Meanwhile the guy leasing continues to lease... and lease... and lease... perpetually.
     
  4. JNyz

    JNyz LawnSite Bronze Member
    Posts: 1,086

    No. Sorry for the confusion. I was just say after 72 months the one who purchased the truck will have about 15,000.00 more into the truck and still have ownership of the truck worth about 15,000.00. The one who leased will have the 15,000.00 in his pocket.. That is why I called it a wash.
     
  5. JCRalston07

    JCRalston07 LawnSite Member
    Posts: 14

    Consider this using the math above

    $550/month for 6 year lease = $39,600 that would be two trucks over that time.

    $780/month for 5 years = $46,800 and the payment ends.

    Now stretch that out to 9 years

    $550/month for 9 years = $59,400

    The guy who bought his truck still has his $46,800 investment and has the ability to get back maybe $10,000 to $20,000 when he sells his truck and buys a new one. So, using the low end he only invested $36,800 over the 9 years

    difference of $22,600. Dont think there are $22,600 worth of tax incentives in leasing.
     
  6. JNyz

    JNyz LawnSite Bronze Member
    Posts: 1,086


    I am not advocating leasing. I just put an example out there. You also have maintenance and repairs on the purchased truck that you will not have on the leased truck. Also you will be able to deduct about 10,000- 15,000.00 more. When you get down to the finale numbers it will only be a few thousand dollars difference either way. Some may not be able to afford purchasing a new truck and leasing gets them in a new truck with less out of the pocket dollars. It is not for everyone but there are advantages. You really need to talk to your tax account to see what is best for you. For me leasing does not have a big advantage.

    Just a note. We are not in the transportation business but most transportation companies lease so there must be advantages to some companies.
     
  7. JCRalston07

    JCRalston07 LawnSite Member
    Posts: 14

    I dont know for sure but I get the impression from some companies the Bling factor has more to do with it than the taxes.
     
  8. JNyz

    JNyz LawnSite Bronze Member
    Posts: 1,086


    Sure that is important for some people but if you are successful you can't take it with you.
     
  9. JCRalston07

    JCRalston07 LawnSite Member
    Posts: 14

    this is true
     
  10. STIHL GUY

    STIHL GUY LawnSite Fanatic
    from CT
    Posts: 5,225

    i would buy a low mile dependable used truck to start off
     

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