How To Buy The Next Commercial Truck for your Business?

Owning a business can be stressful. You have endless expenses. Most of which often begin with something that may seem as mundane as your first industrial work truck. You can either buy or lease it; whichever suits your needs better. You need to make sure you are getting a decent truck that has everything you need and/or want, so you are not buying something you will have to replace later down the road. The first step is to find a dealer who understands your needs, but this is only one of the things you need to take into account.

Depending on where you are located, and on whether you are buying a commercial truck for your business, the IRS may offer large tax deductions. The truck must pass certain criteria to be approved in order to get it though.

1. Claim the business tax break

If you are running an approved small business, and your turnover is below the $2,000,000 mark, then you can look for a small truck that comes under $20,000, (this needs to include GST amount). The business can then claim the whole purchasing price under the depreciation scheme. The depreciation method can be hard to calculate and understand. It is based on things like, what type of vehicle you are using, and how much of a percentage is actually used for the business. You must track the vehicle's mileage to prove the percentage that is solely for business use. Truck Dealers Australia can help you with this.

2. Know what to Expect

If your vehicle weighs more than 6,000 pounds, then you are going to get a good deal. The depreciation works in your favor if you have a large truck, RV, or large van. It is best to speak to the IRS regarding what vehicles are approved and how much of a deal you can get before you sign any contracts.

Car and truck places often have deals at the end of the tax year. This is a good time to buy, because you are often able to get a much better deal.

3. Leasing a truck

If you lease a truck, you will be paying a set repayment expense that will go to the owner, not you. This is comparatively much lower. You bought a truck outright. There are of course other fees to be wary of like a down payment, security deposit, licensing, registration, processing fees, and taxes. This is just to name a few.

4. Buying a truck

The advantage of buying a truck outright is the fact that you can claim depreciation on interest payments in your taxes. Payments are normally higher than leasing, but these payments go towards the ownership of the truck.

5. Know how much you are hauling

You need to know exactly what you will be carrying, and how you are going to use the truck. It will also depend on what types of roads the truck will be going over. You need four wheel drive if you are on slippery areas. If you are hauling large work trailers, then a dually with two rear wheels is better for more stability.

6. Regulations and fees

If you choose a larger truck, you might need a special license which will come with extra fees.

The heavier the truck, the more fees you need to be prepared to pay. You can look at the state’s motor vehicle system before you buy your truck.

Depending on your location, the fees may be high or quite low, so it is always good to know ahead of time, before you lock your purchase in.

7. Engine size

It can be hard when you want a balance of plenty of power, but also fuel efficiency. Trucks are known to be fuel drinkers, but this is more for the older models. The newer, more modern trucks, are more efficient, with better fuel economy. If you are buying a used truck, check whether it has been serviced regularly to ensure a healthier truck.

If your truck is only for work, then you can set a budget for the truck by the growth possibility of the business. This will ensure the truck can still be of use if the company grows. If you are unsure where you will be in 6 months time, then leasing may be the better option. If you need a bigger or smaller truck, you can just swap, instead of selling and rebuying. Such will only cause you to incur losses. Once you have used the truck, and a large portion of time has gone by, you cannot sell for what you paid. Therefore, you will lose money.

Going to the shop with everything you need in mind for your truck will help you from getting talked into something you don’t need. It can be easy to convince someone without knowledge into buying something more expensive or not suitable.

This article does not necessarily reflect the opinions of the editors or management of EconoTimes