Leasing a truck is a good option for those who want a reliable vehicle but are not able to buy one just yet. It also provides you with an opportunity to be your own boss. Many truckers have to submit themselves to companies that force them to take jobs they otherwise would not take; thankfully, there are other options.
Though leasing may be a good idea, you should not take this contract lightly. There are a lot of intricate details that must be considered. For example, have you tried understanding your vehicle lease agreement before you sign and the type of coverage they require you to buy?
Many simply do not question this because they believe the truck leasing representative will go over the details without hiding anything important. It may not be the truck leasing company’s intention to withhold information as they might just overlook it. Still, the wisest thing to do is to be knowledgeable, so the following are a few things you need to understand about your lease and coverage that should be covered before you sign the agreement.
Understand the Main Lease Types
There are two basic leasing types: one is the operating lease, and the other is the capital lease. The capital lease gives you the benefits of owning the vehicle and usually guarantees an option to buy at the end of the lease term. If you choose to purchase the truck at this point, it should be the price agreed on when you signed the lease agreement.
The second type of lease is the operating lease, which is leased for a pre-agreed term. The main difference is you may or may not get the option to buy the truck at the end of your term. There also may not be a reduction in the price.
Dissecting a Bad Contract
A contract between two entities will not be fair if one party is unaware of the little tricks used to take advantage of the other party. The other party could be you if you do not pay attention to some of the major issues.
One of the biggest mistakes you can make while negotiating the lease is agreeing to a deal that is based solely on how many miles you drive. This might seem okay, but you may end up spending more than you need to.
It is always important to ensure that the interest rate, the term, truck payment, and the final price of the truck are agreed upon before you sign the lease. There are some leasing companies that might try to leave these open ended so that they can change the prices, which can get expensive.
You should also be weary of any company that does not want you to have the lease purchase agreement looked over by a professional. You do have the right to have it looked over before you finalize the deal, so this is definitely a red flag that the company might be trying to rip you off one way or another.
Do Not Overlook Insurance
One thing that needs to be addressed in the terms of your lease is the insurance. The leasing company will offer insurance, but it may not be good enough to protect what you can consider your property for the time being. The insurance may be a little too cheap, or you may be paying for what you do not need.
It is better to contract your own independent insurance company to know exactly what is being covered, and check out other prices as well.
One type of insurance that some contracts may not give you is a non-trucking liability insurance. This type of coverage takes care of you should you be operating the truck for your own personal purposes.
Another little hiccup in most lease contracts is the insurance does not provide bobtail liability. This type of liability takes care of you when you are operating the vehicle without the trailer attached to it. Sometimes a trucker will leave the trailer behind to make a quick errand and save on gasoline. It is your truck for now, so you should be able to do whatever you need to do without worrying about coverage.
You should consider having breakdown coverage, just in case the truck fails for some reason, and you are stranded somewhere in the middle of nowhere. Towing a truck is not as easy as towing a car. The coverage should cover towing and any labor that needs to performed to get your vehicle in tip-top shape again.
Many insurances do not cover any personal property that you might decide to carry on your truck. Sure, the truck is mostly for you to transport other goods, but that does not mean you will not find any use for it on your own time. Your goods matter to, so taking advantage of a good personal property protection insurance is wise.
The gap coverage is often overlooked, but it provides protection on the difference between the loan and the truck’s market value should there be an accident where the truck is completely totaled.
One last type of insurance that is sometimes not provided is a full passenger accident coverage that covers anything that could occur to your passenger or employee. Some lease contracts think that you are going to work alone, but that may not always be the case. It is important that the basics are taken care of like medical expenses or even death.
Failing to Pay Attention to Those Strange Limits
All leased vehicles come with limits, which are sometimes reasonable like not modifying the truck’s overall look. Modifications to the truck could make it hard for the company to lease the vehicle to another, which is what this leaser wants to do.
Still, there are a few limits that really do not make any sense and should not be a part of the deal that you are making. For one, you should stay away from, or renegotiate, a lease contract that will not allow you to perform upgrades that will help improve gas mileage. This will help you make a little more money as well as the leasing company in the long-run if you just return the vehicle.
You also want to be weary of a leasing company that is asking you to bring the truck to a designated mechanic. It is your vehicle while you are leasing it, and it should be up to you where it will be serviced. This might be a red flag and could mean that the leasing company is trying to extort you.
The truth is there are a lot of things to think about when leasing a vehicle, so the best advice is to make sure you read the lease in its entirety and understand it before signing it.