Commercial Truck Lease Agreements: Vital Considerations

April 25, 2023

Commercial trucks are critical to this nation’s economy. Trucking companies understand the role that trucks play in keeping everything moving. However, purchasing a new truck is often too costly for many new entrants to pay, so considering a commercial truck lease may seem like an attractive alternative. 

How Does a Commercial Truck Lease Work?

With a commercial truck lease, the owner-operator enters into a contract in which they agree to pay a certain amount at prescribed times, as indicated in the payment schedule on the contract. In return, they are allowed to use the truck during this time. Leases are great for business owners that lack the cash flow to purchase a truck outright.

While the lease terms will vary depending on the contract stipulations, leases are a preferred option for many new business entrants or those needing to scale up a fleet quickly. 

Commercial Truck Leasing Considerations   

Commercial truck leases can help your business get off the ground. However, before signing the leasing papers, it’s essential to consider all aspects of the lease to ensure you are making the right decision for your company. The following list of considerations is a great place to start.

Financial Considerations

While reviewing the contract can be tedious, you must learn and understand the full financial ramifications of the lease. While truck leasing doesn’t require a significant upfront capital investment, it’s essential to realize that you will pay more with a lease than a purchase over a long period. Therefore, a lease may be your best option if you don’t have capital or if capital is tight at the current time.

Many leasing companies also have lease-to-own (also known as lease-purchase) options. This option can allow you to use part of your truck lease payment for equity for a down payment, allowing you to purchase the vehicle eventually. It’s also good to shop around at different commercial truck leasing options since you may find more favorable lease terms, such as a shorter/longer duration and lower APR. And finally, you will want to consider your credit record. Unfortunately, you may pay more if it is poor since the lessor must mitigate the risk of leasing an expensive piece of equipment.

If you can improve your credit record before signing the lease, it could work in your favor from a financial perspective.

Additional Costs

In addition to the financial terms of the lease and ensuring the lease payments fit in your existing budget, you will also want to read the fine print to understand all of the lease fees, fuel costs, and maintenance costs. These ‘details’ could cost you a fortune if you find that you are on the hook for certain expenses that you thought were covered in the lease.

Truck Considerations

You may discover that lease options are limited regarding what is available (or, at the least, you may have to look harder to find the right truck). But finding the right truck to meet your immediate and short-term needs is vital. Some lessors will have new and used trucks to select from for lease agreements. 

Truck Maintenance and Repairs

Full-service leasing often includes repair and maintenance costs, such as tire replacements, oil changes, regular inspections, and parts and labor for minor and major repairs. Individual leases may have different stipulations, and some may require the owner-operator to pay for routine maintenance over the contract's life. Failure to uphold the agreed-upon maintenance schedule could result in additional fines or penalties.

While a full-service lease gives you peace of mind that you won’t have a huge, unexpected maintenance bill, it is a big part of why you pay more for your monthly lease payment than you would with a purchase. But it’s still vital that you look closely at the contract maintenance conditions and understand what is covered and what is not. 

Annual Mileage Restrictions

Another key factor to consider in your lease is the annual mileage limitations. You may be subject to additional, costly charges if you exceed these mileage restrictions. Therefore, you will want to find a leasing company that can work with you to give you a mileage cap that will work with your company’s workload. 


All lessors will require an appropriate level of commercial vehicle insurance before the truck can be driven. However, insurance rates may vary depending on the driver, the truck, and the type of cargo that will be hauled. And while these factors are variable, before any lease is signed, it’s worth pricing out insurance to ensure you can find an appropriate policy that fits your budget. 

Wear and Tear

All commercial truck leases have a damage policy that will specify the acceptable wear and tear on the commercial vehicle and define what is considered damage. It’s essential to understand this section as you may be subject to considerable fees for even slight wear and tear, such as minor dents in the bodywork and small tears in the seat. So it is vital to understand these provisions before entering into a lease agreement. 

Lease Agreement Compliance

Since leases for commercial vehicles have a relatively low financial commitment compared to purchasing a truck, they often have many rules and regulations to prevent the vehicles from degrading and depreciating more rapidly than expected. However, these guidelines may differ from your intended vehicle business use. Therefore, you must understand what restrictions are in place and how they may impact your ability to conduct business as you usually would.

Commercial truck leases are an excellent option for many owner-operator trucking companies. However, it’s important to understand your commitments as a lessee. A failure to understand these requirements could cost you big. On the other hand, if you find a lease that works for your needs, it can be a sound business and financial decision that helps you build your company!

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