Topic: Which is better:a lease or a loan?
Posted by TomGresh01 on 11-28-2017 01:40:18
I am self-employed, doing a small scale business. I want to know whether a lease financing right for me. I want to have a truck as soon as possible. So, I searched for all the available options.
I came across some companies offering truck lease as well as truck loans in Florida. I am confused about choosing one! In my search, I came to read the advantages of a truck lease and some of them are:
1. A simple and quick financing application and approval process;
2. Protection of working capital monthly rentals are much lower than the total cost of the equipment, and your line of credit remains intact;
3. Borrowing capacity from banks is preserved and can be used for financing that only them can provide;
4. Monthly rentals are tax-deductible;
5. Sales taxes do not apply when acquiring equipment.
And I want to know if there is any hidden risk in leasing a truck. What are the formalities to be followed to get approved? How much would it differ from a truck loan in terms of rate?
Hope someone would help. Thanks in advance!
Response: Re: Which is better:a lease or a loan?
Poster: pcrh Date: 11-29-2017 18:40:22 Thread: 40660.html
Both will have their advantages and a lot will depend on your personal situation.
Lease payments are fully deductible but with loans your interest and depreciation are tax deductible. Also the tax is part of your total cost and is therefore deductible.
Lease companies usually allow for normal wear and tear and then charge you at the end of the ease for extra wear and tear. When you own the unit your wear and tear can be whatever you are comfortable with.
Lease companies are not there to save you money, they are there to make money. In the long run lease will cost more than owning outright.
Treat the above as general comments and seek local help from a financial person for your area to get some information pertinent to your situation.
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