Truck Power Leasing Frequently Asked Questions
When does it make sense to lease instead of buy?
The first thing you should do is determine whether you have an interest in staying with your current Carrier until the truck is paid-off. If the answer is NO, then you should consider being a company driver OR you should try to buy the truck outright. If you buy the truck you can move the truck to another carrier, if needed. However, you will need to have a 10 to 20 percent deposit for bank financing, a FICO credit score that exceeds 650 as well as other criteria specific to the lender (past truck purchase, etc). This decision should be made only if you have several successful years as an Owner-Operator and 40% of the cash price of the truck in liquid assets (cash). This will give you a 20% cushion (cash flow) in case you can’t make your bank payments. Without that, you could lose it all! If you don’t have the cash or credit needed to buy a truck you may want to consider leasing a truck. Leasing a Freightliner truck is beneficial to the owner-operator and smaller fleets because it preserves your cash, and, lack of cash-flow is the most common reason new businesses fail. Another consideration is the ability to upgrade into a newer truck more frequently to take advantage of newer technologies and better fuel economy. Finally, this option also places the risk of obsolescence and declining truck values (residual) on the Lessor.
Is a Deposit required?
Yes. Deposits can vary depending on the program, the age & value of your truck & your credit situation. However, lease deposits are often more affordable than the down-payments needed to buy a truck.
How are Repairs & Maintenance handled?
Your lease will require a maintenance contribution based on your mileage (cost per mile). Truck Power is positioned to assist you in controlling your maintenance & repair costs. We understand the repair process and our focus is to improve your efficiencies. That’s why we focus on warranty and standard repair times as well as keeping diagnostic time and downtime to a minimum.
How are settlements handled?
All truck payments will be deducted from your Carrier settlements. A two-week grace period is granted before the first Lease payment is made however, Maintenance deductions begin the first week of the lease.
Will the truck belong to me at the end of the lease contract?
It depends. There are several end-of-lease options including: Walk-away – you will not own the truck, however, all maintenance funds remaining-after the truck is brought to “trade terms” will be paid to you after 45 days (If you terminate prior to the last day of the lease you will forfeit all maintenance dollars. In other words, you must complete the contract!) Pay-Off– you can arrange to pay the residual amount due at the end of the contract and you will receive the title to your truck. Trade-In – most of our lessees find it beneficial to replace their truck at this point. We determine the market value for your truck and we get you into a new truck complete with new warranties, new technologies and, most importantly, better fuel economy. This option makes the most sense because you can be rewarded for a well-maintained truck.