Leasing vs Buying a Truck in Canada

When you're ready to add a truck to your fleet or get behind the wheel as an owner-operator, you face a key financial decision: Should you lease or buy your truck? Each option has its own benefits and trade-offs. In this guide, we'll walk through the pros and cons of truck leasing vs. buying in Canada, so you can choose the right fit for your operational and financial goals.

Understanding the Difference

Leasing a truck means you're essentially renting the truck for a set period while making monthly payments. You don't own the asset unless you choose to buy it at the end of the lease term.

Buying a truck (usually via an equipment loan) means you take full ownership, either by paying upfront or financing the purchase with a loan.

Both paths can work well depending on your cash flow, usage needs, and long-term plans.

Pros of Leasing a Truck

Lower Upfront Cost:
Truck leases typically require less money down than a traditional loan, helping preserve your working capital.

Predictable Monthly Payments:
Lease terms often come with fixed payments, making it easier to budget over the short term.

Access to Newer Equipment:
Leases allow you to upgrade to newer trucks more frequently, which can improve fuel efficiency, safety, and uptime.

Possible Tax Advantages:
In some cases, lease payments may be tax-deductible as a business expense. (Speak with your accountant.)

Easier Approval:
If you're a newer business, it may be easier to get approved for a lease than a loan, especially for newer trucks.

Cons of Leasing a Truck

No Ownership:
Unless you opt for a lease-to-own structure, you won’t build equity in the asset.

Mileage and Usage Restrictions:
Some leases come with limits on mileage or require strict maintenance standards. Extra charges may apply for exceeding limits.

Higher Long-Term Costs:
While leases are cheaper upfront, they can cost more over the long run if you lease repeatedly.

Limited Customization:
Leased trucks may have restrictions on branding or aftermarket upgrades.

Pros of Buying a Truck

Full Ownership and Equity:
With a loan or cash purchase, the truck is yours. You build equity with each payment.

No Restrictions:
There are no mileage limits or penalties. You can modify, repaint, or upfit the truck as needed.

Better Long-Term ROI:
If you keep trucks for a long time, ownership can be more cost-effective than continually leasing.

Asset Leverage:
Owned trucks can be used for refinancing or a sale-leaseback to free up capital later.

Higher Resale Value:
You can sell the truck when you’re ready to upgrade and retain any market value.

Cons of Buying a Truck

Higher Initial Investment:
Even with an equipment loan, you’ll need a larger down payment than with a lease.

Depreciation Risk:
Like most vehicles, trucks lose value quickly—especially in the first few years.

Maintenance Responsibility:
You’re on the hook for repairs once warranties expire. Consider using truck repair financing to spread out major costs.

Harder on Cash Flow:
Lump-sum costs like taxes, insurance, and major repairs can create budget strain, especially for small carriers.

Questions to Ask Before You Decide

Before you commit to either path, ask yourself:

• What’s my monthly cash flow?
• How long do I plan to keep the truck?
• Am I okay with mileage limits or restrictions?
• Do I need to preserve capital for other business needs?
• Am I eligible for low-rate financing?
• Will I want to refinance or resell later on?

Your answers will help determine if leasing or buying aligns better with your trucking strategy.

Side-by-Side Comparison

Real-World Example

A fleet operator in Ontario was expanding their route network and needed 3 new day cabs. Instead of buying all three with cash, they decided to lease two trucks and buy one with a business line of credit. The lease gave them predictable payments and newer models, while the owned truck added equity to their asset sheet. Within 18 months, they refinanced the owned unit for working capital to support driver hiring and repairs.

Final Thoughts

Both leasing and buying have their place in the trucking world. If you value flexibility, lower upfront costs, and frequently rotate your fleet, leasing might be the better fit. If you’re building long-term equity and have strong cash flow, ownership through a loan may serve you better.

If you're still unsure, talk to a financing expert at Mehmi Financial Group. We’ll help compare your options and guide you toward a tailored solution based on your goals, whether that’s a lease, loan, or line of credit.

Let’s get you on the road with the right structure in place.

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