Truckers face a variety of financial truck options when their lease is approaching its end. The best choice depends on their unique situation, financial status, truck condition, and future business plans.
Most would prefer to pay off the lease if the truck has been properly maintained and has equity. Therefore, it’s essential to have a plan well before the lease end date. To make sure you prepared for the end of your trucks lease, below are some of the following options that could benefit you:
- Renew the lease
- Return the truck
- Buyout the lease
- Refinance the Lease
- Trade-In the Truck
Renew the Lease
Truckers can renew their lease with the leasing company if they are satisfied with the truck and lease terms. This choice can be helpful if the trucker wants to keep predictable monthly payments and avoid the expenses of purchasing a new truck. However, the leasing company may prefer to keep the lease due to the truck’s age and mileage. So, before you choose this option, review every option available first.
Return the Truck
If the trucker no longer needs the truck or can’t afford to buy it, they can return it to the leasing company at the end of the lease term. This option may come with early termination fees or penalties if the truck is not in good condition or has exceeded the mileage limits specified in the lease agreement. In addition, some leasing companies offer maintenance programs while leasing their trucks.
Buyout the Lease
If the trucker wants to keep the truck, they can buy out the lease. This involves paying the truck’s residual value, the estimated value at the end of the lease term. This option can be beneficial if the trucker wants to own the truck outright and avoid monthly lease payments.
However, buying out the lease requires upfront cash or financing to cover the truck’s purchase price. First Capital Business Finance offers financing options for good and bad credit business owners. Within a few simple minutes, you can be prequalified. Call and speak with one of our advisors at 888-565-6692.
Refinance the Lease
Truckers can renegotiate the lease terms with the leasing company by refinancing the lease. Although sometimes it might be complicated, you should always ask your leasing company about the ability to refinance the lease from the very beginning. They might not even offer this as an option, and it would be good to know this when making plans at the end of your lease.
Refinancing the lease can be beneficial if the trucker wants to:
- Extend the lease term
- Reduce the monthly payments
- Adjust the mileage limits.
- Buy out the lease but needs more time to secure financing.
If you plan on refinancing the lease, this can take a little longer. You want to do this on time and avoid losing the truck. If the truck is older, has higher miles, or needs maintenance, the leasing company may not want to extend the lease. There is also a higher chance of repairs or costly maintenance they might not want to cover during the remainder of the new lease.
This is where a company like ours can offer other solutions. First Capital Business Finance offers multiple programs for lease buyouts that provide a longer-term with affordable payments to pay off the truck. This is an excellent solution for someone who wants to keep the equity they’ve paid into the car and keep it. To view our programs, visit our website or call 888-565-6692.
Trade-In the Truck
If the trucker wants to upgrade to a newer or better truck, they can trade the current truck to the leasing company or even try contacting a truck dealership to compare the offers. When trading in the truck, the leasing company or dealer will take ownership of the truck and apply its value toward purchasing a new truck.
Depending on the equity in your truck, you might have a balance or credit on the trade-in. This option can be beneficial if the trucker wants to maintain a steady flow of income but needs a newer or better truck to meet the demands of their business.
If no equity is left, the trucker will be required to cover the balance if they won’t finance the difference in the new lease. We have found most trucks have some equity if they have been paying on time for the last several years. You should ask for the payoff and the breakdown of any other fees associated with the lease. This will get you a good idea on the truck’s equity by pulling up some recent sales online.
Consider All the Options Before Your Truck Lease Ends
It’s essential for truckers/business owners to carefully consider the pros and cons of each option and consult with a trusted advisor or accountant to make the best decision for their trucking business. But more importantly, take the last minute! It’s critical to have a plan in place well before the end of the lease. If financing the buyout is necessary, it may take some time, so planning is vital.
If you have any questions about our financing options, you can speak to one of our friendly advisors at 888-565-6692. If you prefer not to talk on the phone, you can use our online Help Desk and chat with one of our online advisors. Our Help Desk also offers after-hours support if you cannot do this during typical business hours.
It’s essential for truckers/business owners to carefully consider the pros and cons of each option and consult with a trusted advisor or accountant to make the best decision for their trucking business. But more importantly, take the last minute! It’s critical to have a plan in place well before the end of the lease. If financing the buyout is necessary, it may take some time, so planning is vital.
If you have any questions about our financing options, you can speak to one of our friendly advisors at 888-565-6692. If you prefer not to talk on the phone, you can use our online Help Desk and chat with one of our online advisors. Our Help Desk also offers after-hours support if you cannot do this during typical business hours.
