How to Lease a Semi-Truck

Last Updated November 1, 2024

A semi-truck is arguably the most important asset for any trucking company. Some carriers choose to purchase their semi-trucks, but that isn’t the right option for all business owners. So whether the high costs of starting a trucking business is forcing you to keep upfront costs to a minimum or you just want to make sure trucking is the right career for you before going all-in, leasing a semi-truck is a smart alternative to buying.

Leasing allows you to drive a new, reliable vehicle without the financial burden of an outright purchase. However, like any business decision, leasing comes with its own considerations. Check out this guide to learn how semi-truck leasing works, its pros and cons, and how it differs from buying a semi-truck.

What Does It Mean to Lease a Semi-Truck?

Leasing a semi-truck means you’re renting the truck from a leasing company. Like many leasing agreements, you rent the vehicle for a set period and make regular payments. You return the semi-truck at the end of the leasing period.

Most leasing companies offer newer truck models for lease, so this is a great option for accessing the latest and greatest semi-trucks without the financial burden of owning the truck. If you’re trying to start a trucking company, leasing allows you to get up and running for a much lower upfront cost. Leases are flexible, so you can choose the agreement that best fits your needs. Leasing companies also offer full-maintenance leases, which means they cover all repairs. That’s especially helpful if you want to focus on driving without worrying about expensive upkeep.

How Commercial Truck Lease Agreements Work

If you decide that leasing is right for you, you’ll sign a lease agreement with a semi-truck leasing company. A lease agreement is a legal contract outlining the rental terms. Every lease agreement is different, but most include:

• A payment schedule
• Lease duration
• Mileage limits
• Maintenance and insurance requirements

Knowing the type of lease agreement you have is very important. For example, lease-to-own agreements allow you to apply your lease payments toward ownership, while standard leases may offer the option to return or renew the truck at the end of the term. The most common types of leases are operating and capital leases.

Operating Lease vs. Capital Lease

An operating lease is a rental agreement. You get the truck for a period of time and return it to the leasing company when the contract expires. If you want to become an owner-operator but require proof of concept before investing a lot of money into the business, an operating lease is a good option. It has lower payments than a capital lease, and the leasing company is sometimes responsible for repairs and maintenance.

A capital lease (or financial lease) works more like a trucking business loan. It’s a rent-to-own arrangement where you eventually take ownership of the truck. The downside is that you assume more responsibility for maintenance and upkeep. You also pay higher monthly payments. However, your payments go toward building equity in the truck, which means you’ll own the vehicle at the end of the lease term as long as you keep up with payments.

If you’re trying to choose between an operating lease and a capital lease, it depends on your long-term goals. If ownership is important to you, a capital lease is likely best. But a traditional operating lease could be the better option if you want proof of concept first—or just need to get started with as few expenses as possible.

Requirements to Lease a Semi-Truck

You need to be legally and financially prepared before leasing a semi-truck. Run through this quick checklist to ensure you’re ready for a lease:

• Commercial driver’s license (CDL): This license is mandatory. You must have a CDL before entering into a semi-truck lease agreement. It’s also required to drive a semi-truck on public roads.
• Decent credit score: Leasing is like renting, so expect the leasing company to run your credit before approving your contract. Many want to see a strong credit history, which will usually give you more flexible rates. However, having a low credit score doesn’t disqualify you in all cases. Many leasing companies will work with bad credit but charge you higher interest rates and potentially require deposits or down payments.
• Trucking Authority and DOT number: Leasing companies will often handle registration and permits for you. However, this isn’t always the case. Always ask if the leasing company manages trucking authority and DOT numbers or if you’re expected to apply for them.
• Insurance: All owner-operators must have insurance coverage to drive a semi-truck on public roads. Leasing a commercial truck requires primary liability insurance, which covers injuries to others. Physical damage insurance protects the truck itself, while cargo insurance is a must-have for hauling goods. Some drivers swear by gap insurance, which kicks in if your truck is totaled and the insurance payout is less than the lease balance.

How Much Does It Cost to Lease a Semi-Truck?

Buying a truck costs anywhere from $30,000 to as much as $200,000—fortunately, leasing isn’t nearly that expensive.

On average, semi-truck leasing agreements cost $800 to $2,500 a month. The cost ranges based on the truck’s model and your lease terms. For example, a lease-to-own semi-truck agreement will have higher monthly payments, although those payments go toward paying off the truck.

However, some leasing companies also require a down payment, which ranges from 10 to 25% of the truck’s value. The down payment can vary based on the leasing company, your credit score, and whether you have a rent-to-own semi-truck agreement.

It’s also important to factor in insurance, which can cost as much as $12,000 a year. Leasing agreements also come with mileage limits, which will charge you an additional fee (often $0.10 to $0.30 per mile) for every mile driven over the limit.

To give you an idea of the total cost of leasing a semi-truck, here’s an example breakdown:

• Monthly payment: $1,500
• Down payment: $20,000
• Insurance: $9,000
• Maintenance: Included in a full-maintenance lease

The total cost for a typical three-year lease is $94,000, including the down payment, monthly payments, and insurance.

Pros and Cons of Leasing a Semi-Truck

Leasing a semi-truck gives you more flexibility and lower upfront costs, but it has limitations. Understand the pros and cons of renting a semi-truck to help you make an informed decision.

Pros

• Leasing a semi-truck is generally more affordable than buying. It also comes with benefits like:
• Access to newer truck models, which gives you the best in technology and comfort
• Flexible payment terms
• Freedom to decide whether starting a trucking business is for you
• Maintenance and repair coverage

Cons

• As flexible as semi-truck leases can be, they aren’t suitable for all owner-operators for several reasons:
• Unless you opt for a rent-to-own agreement, your monthly payment doesn’t build equity
• Mileage restrictions limit your ability to work, especially if you want to do long-haul drives
• It costs less upfront, but leasing long term exceeds the cost of buying a semi-truck

Leasing vs. Buying a Semi-Truck

Some owner-operators swear by leasing, while others prefer to buy a semi-truck instead. Ultimately, there’s no correct answer. It depends on your business plans, risk tolerance, and budget. Understand the differences between leasing versus buying a semi-truck to pick the best option for your business.

Leasing a Semi-Truck

Leasing a semi-truck gives you access to the latest technology and newer trucks. Many lease agreements come with manageable monthly payments, which allow you to operate a commercial vehicle without the hefty upfront costs associated with purchasing. Leasing agreements typically range from short-term rentals to long-term options, making it easier to upgrade to newer models or adapt to business changes.

Some owner-operators prefer leasing at first because it’s cheaper in the short term. However, leases are more limiting than buying a truck outright. They often come with strict terms and down payment requirements. If you don’t opt for a rent-to-own lease, your monthly payments won’t build equity, either.

Buying a Semi-Truck

Buying a semi-truck could be the better option if you plan on making a long-term investment in your trucking career. You’ll pay much more upfront, but purchasing allows you to build equity in a truck you’ll eventually own outright. Buying is often less limiting than leasing if you plan to drive the truck for several years. You’re also free to sell the truck whenever you like, and there are no mileage restrictions.

The downside with buying a semi-truck is that you’re in charge of all maintenance and upkeep, as well as insurance and DOT registration. It’s often difficult for new owner-operators to cover the cost of buying a semi-truck.

The Importance of Being Financially Prepared When Leasing a Truck

Leasing a semi-truck is more affordable than buying, but you still need to be financially prepared. While leasing can offer lower upfront costs compared to purchasing, it’s still a significant commitment.

Before entering a semi-lease, assess your budget, review all terms of the semi-truck lease agreements, and ensure you can meet the payment requirements throughout the lease period. Calculate the total cost of ownership for the semi rental, including insurance and potential excess mileage charges.

In-Summary: Leasing a Semi-Truck

Leasing a semi-truck makes the dream of entrepreneurship a reality for many aspiring owner-operators. Whether you want to start a trucking business for as little money as possible or want to explore whether this business is right for you, semi-truck leasing agreements are a great option. They’re limited and cost more in the long run than buying a semi-truck, but they can be a smart move for drivers looking to grow their fleet without the financial burden of ownership.

Semi-Truck Leasing FAQs

How much does a full-service semi-truck lease cost?

A full-service semi-truck lease usually costs more because it includes maintenance and repairs. Standard leases are often in the $800 range, while full-service leases cost anywhere from $1,800 to $2,500.

How long does a truck lease last?

Most leases last one to two years. Short-term leases usually cost more per month. Lease-to-own semi-truck agreements often have a higher monthly payment, but they’re designed to give you time to pay off the truck.

Is there a minimum credit score required to lease a semi-truck?

Technically, no, but the higher your credit score, the better. Most leasing companies want to see a score of 600 or higher to approve a lease. You can still qualify if you have a lower score, but you’ll likely face higher down payments and interest rates. Some companies also offer special programs for drivers or businesses with less-than-perfect credit.

Is it a good idea to lease a semi-truck?

It depends. Leasing a semi-truck can be a great option if you want to avoid the high upfront costs of purchasing and prefer the flexibility of upgrading to newer models every few years. It’s also beneficial if you want to keep maintenance costs low through a full-maintenance lease. However, buying might be a better decision in the long run if you plan to use the truck long term and prefer ownership.