Semi Truck Rental, Leasing, & Buying: What Is The Best Option for You?
Buying a semi truck, whether new or used, is a major investment. Because of the heavy costs involved, some owner-operators look to semi truck rentals or semi truck leasing to get into their own truck sooner. If you’re hoping to set out as an owner-operator now or in the future, it’s important to know the costs as well as the advantages and disadvantages of each option.
Weigh your options for yourself and determine which one best suits your needs. Understanding the paths to truck ownership and the expenses associated with being an owner-operator will help you prepare to tackle this industry head-on.
Buying your own semi truck is a major financial commitment. Not only is there the initial cost of the truck to consider, but you are also responsible for covering registration, insurance, gas, maintenance, repairs, and more for your vehicle. Then there’s the question of what kind of truck you need and what features you need your truck to have. Do you need a more powerful engine? Will you get a day cab, or do you need a sleeper cab? Tacking on additional features can add up quickly.
This is why it’s important to get the kind of truck you need, not just the kind of truck you want. Before you buy a semi truck, sit down and list out what you really need from your truck, better gas mileage, towing capacity, etc., and then make a separate list for what features you’d like for your truck.
New semi trucks vary widely in cost and depend largely on the type of engine as well as different features you can include. Some cabs are very basic and only offer the essentials, while other trucks are decked out with the latest luxury amenities including beds, kitchens, and even showers and bathrooms.
New truck prices range from $80,000 to $150,000 on average, but can be over $200,000 if you’ve opted for extra features. Trucks on the lower end of the price range are usually single axle trucks with a day cab. They also are likely to have a lower towing capacity. Trucks on the higher end of the price range usually have higher horsepower and torque for hauling large or heavy loads, and include features like sleeper cabs and added technology.
Buying a used semi truck is a much more affordable option for many owner-operators looking to save costs, while still getting a great truck they can use for their business. Buying a semi truck that’s used can literally save you tens of thousands of dollars. If you’re in the market to buy a semi truck, it pays to shop around and see what used options are available, before committing to a brand new vehicle.
If you’re a new owner-operator, buying a used semi truck may be the best option for you. Used or refurbished trucks average between $15,000 to $100,000 depending on the age, vehicle features, type of engine, and mileage of the truck. A good, used, medium-sized semi will usually cost around $20,000 to $40,000, while most heavy duty semis will fall into the $30,000 to $80,000 price range. Newer trucks with fewer miles and upgraded features will be closer to $100,000.
The types of trucks that run in the $10,000 to $15,000 price range are likely to be smaller trucks with less powerful engines, or semis that have a lot of miles on them and may not be ideal for OTR trucking.
When you buy a semi truck, you have the option to choose between a used or refurbished truck if you don’t want to purchase a new vehicle. If you’re trying to decide between a used or refurbished truck, it’s important to understand the difference between the two. Refurbished trucks have been restored to manufacturer standards, while used trucks have no such guarantee. Refurbished trucks are likely to be slightly higher priced, but will also likely be more reliable than used vehicles.
The best way to buy a used semi truck is to shop around at multiple dealerships to find the best deal possible. Whether you decide on a refurbished or used truck, make sure you test drive any trucks you’re interested in. Look over the interior, make sure it drives smoothly, listen to any strange sounds from the semi truck engine, and get your truck inspected by a trusted mechanic before purchasing if at all possible.
Unless you’ve saved up a lot of money, you’re likely to finance at least a portion of your new semi truck purchase. Thankfully, securing financing for buying a semi truck is a little easier than getting an unsecured loan because the truck acts as collateral for the lender. The interest rate for semis is usually somewhere between 4%-16%, and there are many options for financing when you buy a semi truck including:
Whichever option you choose, most lenders will require a 10%-30% down payment on your vehicle unless you have outstanding credit history and at least a few years as a CDL driver under your belt. Owner-operators who have been in business for at least two years and can show steady profitability may also qualify for a 0% down payment. However, whether you will need a down payment is entirely up to your lender so it pays to shop around and see what financing is available.
Your credit score can make a significant difference when you buy a semi truck of your own. A good place to start is with a credit score of at least 600, with no repossessions on your record. Almost every lender will look at your record to see if you’ve had a repossession or bankruptcy in the past, although it will depend on the individual lender whether you can still get financing with either of these on your record.
If you’ve been in business at least two years, have no repossessions, and a credit score of 700 or more, you’re in a good position and may even be able to get financing with a 0% down payment.
Now that you know the general credit guidelines you need to buy a semi truck, you might be wondering if you can still get financing for your truck if you have bad credit. The answer is that it really depends on your lender along with other important factors. Some lenders will lend to individuals with low or bad credit scores and bankruptcy, but will not lend if you have had a recent repossession or if you are past due on any child support.
As always, the best place to start when buying or leasing a semi truck with bad credit is to increase your credit score. Some general guidelines for increasing your credit score include:
There are lots of resources to use to help you improve your credit score and get approved to buy or lease a semi truck. If you can’t improve your score enough to get approved, you may consider some other options for financing with bad credit including:
If you’re a newer owner-operator, you may find it more difficult to buy a semi truck and secure financing because there is no business history to back you. Lenders like to see a history of driving and income. Doing what you can to build good credit and experience will go a long way towards setting you up for success when you make the decision to strike out on your own.
If you’re not in a position to buy a semi truck, you might consider leasing a semi truck instead. There are two main options when it comes to semi truck leasing: you can either lease directly from a dealer, or lease form a trucking carrier. Although leasing a semi truck may also require you to secure financing, many carriers and dealers offer lease to own programs that make the process easier if you have bad credit.
The average cost to lease a semi truck is between $1,600 to $2,500 per month for new trucks. Used trucks average between $800 to $1,600 per month. Keep in mind that you will likely still need to pay a down payment if you’re leasing from a dealer. Down payments typically run around $1,000, but don’t forget to factor in your other expenses such as fuel, maintenance, insurance, and repairs that you are responsible for covering.
Whether you buy a semi truck or go with a semi truck lease depends on your long-term plan, what kind of truck you need, and what condition your credit is in. Leasing a truck allows you to always drive a nice truck with up-spec features. This is because most dealers only finance lending for newer vehicles. When your lease is up, you can easily upgrade to a newer vehicle.
Buying a semi truck allows you to have full control over your driving and is much less expensive on a monthly basis. However, whichever truck you purchase is the truck you must use, and you can’t upgrade without selling your current vehicle and purchasing another truck.
To really answer whether leasing a semi truck is better than buying a semi truck, you need to weigh the benefits and downsides to each. Here are some of the main advantages and disadvantages of both:
Whichever option you choose, make sure you do your homework and read over any contracts carefully before signing. The largest complaint from truckers who lease with trucking carriers is that they got a bad deal. Make sure you understand what you’re agreeing to before you sign your contract, and don’t be shy about shopping around to find the best deal whether you’re buying a semi truck or leasing a semi truck.
Semi truck leasing and semi truck renting are similar because you don’t own your own vehicle, but which one you choose depends on your purpose for using your vehicle and what you want to cover yourself. If you need a vehicle for the long-term, you’re likely looking at a lease, whereas if you just need a vehicle temporarily, semi truck renting may be a good option for you.
Semi truck leasing requires a deposit and monthly payments and requires you to cover your other expenses such as insurance, repairs, maintenance, etc. Leases are typically a long-term solution, and most lease contracts go for three to five years. After the term of the lease is up, many dealers may offer a lease to own situation, or you can choose to renew your lease or upgrade to a newer vehicle.
On the other hand, semi truck renting doesn’t require any down payment and all repairs and maintenance are covered by the rental company. If your vehicle needs repairs, they will take care of it quickly, or get you another truck so you can get back on the road. Rentals are not a great long-term option and are usually used as a short-term solution if you are without your truck.
Semi truck rentals don’t come cheap, which is why semi truck leasing is a better option over time. While the average semi truck lease payment runs $800 to $2,500 per month on average, semi truck rentals average $170 to $215 dollars per day or roughly $5,100 to $6,450 per month. With such a high cost, you can see why renting your truck is not a long-term solution when it comes to running a profitable business as an owner-operator.
Some truckers choose to lease a truck through a trucking carrier. Lease purchase options from trucking carriers differ slightly from regular lease contracts and nearly all of them present their lease programs as a path to truck ownership. Lease contracts through carriers are often around two to four years long with the option to purchase your truck at the end of your lease. Some of the most well-known trucking carriers that offer leasing for semi trucks include:
Lease agreements vary from carrier to carrier and monthly payments are higher than buying your own truck outright. Many drivers also see leasing a semi truck through a trucking carrier as a way to reduce their upfront costs when getting a truck. Make sure you do your homework and carefully read your contract with your trucking carrier before you are on the hook for making lease payments.
Whether you decided to rent, lease, or buy a semi truck, take the time to look over your contract. This is especially true for leases. Some companies will try to convince you that leasing is the better deal for you, but this may not be the case. Get the numbers for yourself and have them detail out the expenses, then go do the research to make sure you really are getting the better deal.
The option to lease, rent, or buy a semi truck depends on what you need to get behind the wheel, stay on the road, and make your business profitable. Living the life of a truck driver is challenging but full of rewards, and getting into a great vehicle as an owner-operator gives you the freedom to be your own boss on the open road.