Truck Lease vs Buy: Making the Right Decision for Your Operation

The Decision That Shapes Your Business

How you acquire your truck is one of the highest-impact financial decisions in your trucking career. The wrong choice can saddle you with payments that eat your profit for years. The right choice builds equity and positions your business for growth.

There are three main paths: buying outright or with financing, traditional leasing, and lease-purchase programs. Each has a place, but they serve very different financial situations. This guide breaks down the true cost of each option so you can make an informed decision.

For a broader view of starting a trucking business and all associated costs, see our startup guide. Use the startup cost estimator to model your total first-year investment.

Buying a Truck

Buying means you own the truck. You build equity, you control maintenance decisions, and when the loan is paid off, the truck is yours.

Financing a Purchase

Most owner operators finance their truck purchase through equipment loans or commercial vehicle loans. Typical terms:

• Down payment: 10-20% of purchase price
• Loan terms: 3-7 years
• Interest rates: 5-9% for good credit (650+), 12-20% for subprime⁴
• Monthly payment example: $80,000 truck, 15% down, 6% APR, 5-year term = approximately $1,316/month

Total Cost of Ownership Example

Purchase price: $80,000 used truck (4 years old, 450,000 miles) Down payment: $12,000 (15%) Financed: $68,000 at 6% for 60 months Total payments: $78,720 ($1,312/month x 60) Total cost including down payment: $90,720

After 5 years, you own the truck outright. If it has residual value of $20,000-$30,000, your true net cost was $60,720-$70,720.

Tax Implications of Buying

Purchased trucks can be depreciated over their useful life, or you can use Section 179 to deduct the full purchase price in the year of acquisition (up to the annual limit of $1,250,000 for 2026).¹² Bonus depreciation is another option.⁶ These accelerated deductions can significantly reduce your tax bill in the year you buy.

Interest on the truck loan is also deductible as a business expense.³ See our trucking tax deductions guide for details.

Advantages of Buying

• You build equity in an asset
• Total cost is lower over time than leasing
• Freedom to choose your own maintenance schedule and shops
• No mileage restrictions
• The truck is yours when it is paid off
• Flexibility to sell or trade when you choose

Disadvantages of Buying

• Larger upfront capital requirement
• You bear all maintenance and repair risk
• Depreciation reduces the asset value over time
• Loan payments are fixed regardless of revenue fluctuations

Traditional Leasing

A traditional lease (also called a TRAC lease in trucking) gives you use of the truck for a defined period in exchange for monthly payments. At the end of the lease, you return the truck or exercise a purchase option at a predetermined price.

How TRAC Leases Work

Terminal Rental Adjustment Clause leases are the most common commercial vehicle lease structure. At lease end, the truck's actual market value is compared to the residual value set in the lease. If the truck is worth more than the residual, you keep the difference. If it is worth less, you may owe the shortfall.

Typical Lease Terms

• Lease term: 3-5 years
• Monthly payment: Often lower than purchase loan payments
• Down payment: Usually less than purchase financing (0-10%)
• Mileage limits: Some leases include mileage restrictions
• End-of-lease options: Purchase at residual value, return, or extend

Total Cost of Leasing Example

Same $80,000 truck: Monthly lease payment: $1,150/month for 60 months Total payments: $69,000 End-of-lease purchase option: $25,000 Total cost if you buy at end: $94,000

Compare that to $90,720 total cost of purchasing. Leasing costs $3,280 more in this example, and you still need to make the $25,000 buyout payment to own the truck.

Tax Implications of Leasing

Lease payments are fully deductible as a business expense in the year paid.³ This is simpler than managing depreciation schedules. However, you cannot claim Section 179 or bonus depreciation on a leased truck because you do not own it.¹ The tax advantage of leasing is simplicity, not magnitude.

When Leasing Makes Sense

• You want lower monthly payments to preserve cash flow during startup
• You prefer to upgrade equipment regularly
• You do not want to manage resale when it is time for a newer truck
• Your cash reserves are too thin for a purchase down payment

Lease-Purchase Programs: Proceed with Caution

Lease-purchase programs offered by carriers and some dealers promise a path to truck ownership, but many are structured to benefit the lessor far more than the driver.

How Lease-Purchase Works

You lease a truck from a carrier or dealer with the intention of buying it at the end of the term. Payments come out of your settlement each week. At the end of the term (typically 3-5 years), you either own the truck or exercise a purchase option.

Red Flags to Watch For

Inflated purchase price. The total cost of the lease-purchase often exceeds what you would pay buying the same truck on the open market with financing. Compare the total of all payments plus any balloon payment to the truck's fair market value.

Mandatory dispatch. Some programs require you to run loads exclusively through the carrier, limiting your ability to find the best-paying freight.

Maintenance charges at carrier shops. Mandatory maintenance at carrier-owned shops often costs more than independent shops.

Balloon payment at the end. A large lump sum due at lease end that many drivers cannot afford, forcing them to refinance or walk away from the truck and all payments made.

Walk-away clauses that penalize you. Read what happens if you need to exit the program early. Many lease-purchase agreements include significant penalties.

Truck condition. Lease-purchase trucks are often older vehicles from the carrier's fleet. Get an independent pre-purchase inspection before committing.

The Math Test

Before signing any lease-purchase agreement, calculate the total of all payments over the full term including any down payment and balloon payment. Compare that number to what you would pay buying a similar truck on the open market with conventional financing. If the lease-purchase total is significantly higher, the convenience is not worth the premium.

Making Your Decision

Buy If

• You have $10,000+ available for a down payment
• Your credit score qualifies for reasonable interest rates (650+)
• You plan to operate the truck for 5+ years
• You want to build equity and long-term wealth
• You can handle unexpected maintenance costs

Lease If

• You need to preserve cash during startup
• You prefer predictable monthly costs
• You plan to upgrade equipment every 3-5 years
• You want someone else managing residual value risk

Avoid Lease-Purchase Unless

• The total cost is comparable to open-market purchase financing
• You have no dispatch restrictions
• You can maintain the truck at the shop of your choice
• There is no balloon payment or it is small and affordable
• An independent mechanic has inspected the truck

The best decision depends on your financial situation, credit profile, and long-term plans. Use our cost per mile calculator to model how different payment amounts affect your per-mile profitability, and the startup cost estimator to see how the truck acquisition fits into your total budget. For financing options beyond lease and purchase, see our truck financing guide.