Is it best to lease a truck ??

Ideas on a lease over buying a truck for your business ? I am finding a lot of down time and repair in GMC truck after 36 months.

How many miles a year do you put on a truck? How old is your truck?

I wouldn't do it personally. The down side to leasing is that most service industry business' put a lot of miles on a vehicle annually.
Once you get beyond that threshold of allotted miles and any deductions as to the vehicles condition at the leases term it gets costly in the end.

I would opt to buy a good used vehicle when we need another truck.

I'd buy a Toyota. I've never had any problems with Toyota. I've had several "US manufactured" vehicles and they are junk after 75,000 miles. I don't know if it is my luck or rather GM, Ford, or Chrysler cannot build a transmission. If you need a reliable vehicle go "Japanese."

If you are seriously working this business without a very concentrated service area, you will probably want to buy rather than lease.

I have a '99 F250 with 525000 miles on it, changed tranny at 471k. A '09 f150 with 200k plus, original tranny. A '10 GMC Sierra with 200k plus, 2nd tranny. And a '09 Ranger with 75k. The Ranger is our Goose work truck and back up vehicle. Bought it used a couple years ago with under 20k on it.

You'll probably put too many miles on to make leasing a viable option.

Leasing a vehicle today is not like it was years ago. Now, you need to put the vehicle on your books as an asset and depreciate it. So instead of being able to claim payments and receive a tax benefit by doing so, you now have to treat it as a purchased asset and for tax purposes choose either mileage or expenses, just like with a vehicle you've purchased.

If you would still desire to lease don't look at just the miles and "penalty" fee for going over, look at deposit AND return fees (we just got hit with a $400 restocking fee on a leased KIA that was returned) and more importantly with what is considered "normal wear and tear." For the KIA, a three year lease wear and tear was defined as scratches and dents under half inch. Meaning, there could be additional "repair" fees for anything on the outside larger than 1/2" along with even more fees if the inside is "to dirty" or damage to the upholstery. So if you lease a truck and add a cap or ladder rack, the dealership may declare any mounting holes, scratches or rust stains as unacceptable damage and send you a repair bill for it.

Good points Eric. Like I said I wouldn't do it or recommend it.

Bob I can't take credit for this one. I was discussing this with my wife who you know is a CPA and she was letting me know of the changes that happened a year or two ago and the impact it will have on businesses (which is why we didn't lease her company car this time but bought it). She has an upcoming article in the July/August issue of WCT Magazine that discusses the new department of labor overtime law that takes affect December 1 of this year and the topic of purchase/leasing equipment (trucks, aerial lifts, dump trailers, computer equipment, etc.) may be something I can ask her to write about later on as well if subscribers would like to see something along those lines.

Thanks for all the info. A lot of very good points. I understand about the US made, have a GMC. My first one and last one. Only 89,900 miles on it and lots of replacement parts.

I have a ford transit bought it used with 54,000 and it now has 108,000 miles and is running great.

Nope, then you never have anything to show for your money spent...just like renting a house/apt.

Been in business for 40 years it is rent all deductible if you make enough money at your business it is feasible but not if your gross income is less 100k 150k.

I buy all my trucks, leasing is very expensive and I would only do that if cash flow wouldn't allow a purchase. I routinely get 200,000 miles on my trucks by keeping up on normal maintenance. I have a 2008 Dodge 1500 with a Hemi that has 250,000 on it! Not much repair work has been done to it, but I try to look things over and repair things on my time versus waiting for stuff to go bad.