Truck Lease Finance

Leasing a truck is much like leasing a business premise. Similar to leasing a commercial space, truck leasing gives you full use of the vehicle while also covering maintenance costs, all without the burden of owning it outright or having the purchase price as a liability on your balance sheet.

What is Truck Leasing?

Truck leasing involves an agreement between you and the lender to repay a set monthly amount over a set term, which may or may not include a residual. Once the loan is approved and the truck purchase is finalised, you have full use of the vehicle. However, the ownership of the truck remains with the lender for the duration of the lease. Upon completion of all payments, including the residual, you then become the legal owner of the truck.

There are three types of truck leasing, each with its own unique features and benefits.

Types of Truck Leasing

Finance Truck Lease

  • The full purchase price of the truck is included in the lease, with no deposit required.
  • The terms of the lease, which can range from one year to seven years, are agreed upon with the help of a finance consultant.
  • The lease has a fixed interest rate over the term of the lease and a fixed monthly repayment amount.
  • The lender claims the GST on the purchase price while you, the borrower, claim the GST applicable to the monthly payments and the residual.
  • Monthly payments are tax-deductible, and residual payments are subject to ATO guidelines.
  • Upon completion of all payments, ownership is transferred from the lender to the borrower.
  • The borrowing company’s balance sheet only reflects the monthly payment as operating expenditure, not the full purchase price.

Operating Truck Lease

  • This type of truck finance is ideal for businesses that need to upgrade their vehicles regularly.
  • You essentially rent the truck from the lender and at the end of the lease term, return it to the lender.
  • There is usually an option to purchase the truck from the lender at market price.
  • The truck appears on the lender’s books, making it an off-balance-sheet structure for the borrower.

Fully Maintained Operating Truck Lease

  • This type of truck finance is similar to an Operating Truck Lease, with the added benefit of the running costs for the truck being included in the monthly leasing repayment.
  • The costs of truck maintenance, registration, fuel, and other expenses are included upfront, allowing the borrower to better budget for their overall expenses and manage their profit projections.

If you’re interested in learning more about the details of truck leasing, speak with a Easy Truck Finance Consultant. However, it’s always a good idea to discuss your business arrangements with your accountant.

Truck leasing can offer several benefits to businesses, including improving their balance sheet, fixing operating expenses, and allowing for regular upgrades. There are three main types of truck leasing, each with its own unique features and benefits. If you’re considering truck leasing, it’s important to understand the different options and to consult with both a finance consultant and your accountant to make the best decision for your business.