Both dump trailers and vehicles cost a lot of money. Even used dump trucks can cost over $100,000, making a cash purchase challenging for the majority of owner-operators. You must have a dump truck to obtain the contracts that will pay for the vehicle.
There are more financing choices than you might realize, which is fantastic news. Financing for both new and used equipment is not limited to conventional bank loans.
This article will discuss how leasing might alter the financing landscape.
Lower Up-Front Expenses
There are limits to money. It’s challenging enough to pay for your daily expenses, not to mention paying for a $10,000 dump truck. Even if the monthly payments are within your budget, a purchase may become unaffordable if there are too many upfront fees.
Before you can access the equipment with a bank loan, you’ll need to pay out of pocket for items like a down payment, taxes, and inspection/transport expenses. For a bank loan, down payments are normally 10 percent to 25 percent of the truck’s cost.
Remember that this money must be spent, regardless of how long you use the equipment or how well it functions.
Typically, there will be no down payment required for a dump truck leasing or a little down payment. You can add taxes, shipping costs, and inspection fees to your monthly payments.
If the equipment isn’t operating as you had intended, you can also trade up or trade out.
Use Flexible Payment Options
Dump trucks won’t all be employed all year. Bank loans often have a 12-month payment cycle, which means you must make payments whether or not your truck is in use or just sitting on the lot.
A decent lease can be written to take into account those seasonal slowdowns. Why pay for a dump truck if you won’t be utilizing it from November to March? You should have the opportunity to set up seasonal payments when you set up your lease.
Obtain Premium Equipment
Your company may be able to afford the best tools for the job, thanks to leasing. Be sure to account for efficiency, labour expenses, maintenance costs, and resale value when calculating equipment costs.
Cheaper equipment frequently results in short-term savings at the expense of long-term savings.
Keep Your Debt Level Healthy
Your available credit will be reduced significantly if you take out a loan. Dump trucks are expensive, and there’s a chance that your credit limit won’t even cover the required funding.
Even if you lease to buy, a lease is regarded just like any other rental agreement. Because of this accounting distinction, a lease typically does not increase your debt burden, indicating that you have credit or cash on hand in case you do.
Have Better Budgeting and Flexibility
The amount of the monthly lease payment is set and won’t change. Lease payments are unaffected by changes in interest rates or market volatility. A constant cost allows you to budget and plans ahead.
Changes to your company’s equipment may be necessary due to a variety of circumstances. Any of these factors—new technology, shifting markets, rising or falling fuel prices, new regulations, corporate expansion—can force you to change if you want to remain competitive.
In an emergency, leased equipment can frequently be exchanged or upgraded, giving you a little more freedom going forward.
Reduce Your Business’s Tax Burden
Your income or business taxes may fully deduct the whole amount of your lease payments. Lease payments are completely tax deductible, unlike loan payments, which can only be deducted for interest.
The Canada Revenue Agency classifies lease payments as a business expense rather than a capital investment, which results in these savings. Your monthly payments are deductible from taxes even if you are leasing to own.
All of these advantages help make leasing an attractive option for businesses looking to expand their capabilities.
Leasing a dump truck can be an attractive option for commercial establishments that need a reliable and cost-effective way to transport and dispose of materials and get their businesses up and running.
LeaseAxel is a reliable leasing company in Toronto. Lease a car, truck, SUV, or luxury vehicle from any of Canada’s auto dealers with our Used Vehicle Leasing options!
We aim to provide Canadians with affordable leasing options for purchasing their vehicle for daily life, work, and leisure. Pick your truck today!