1. What is Lease To Own Trucking?

Lease to own trucking is a financial arrangement where a truck driver makes monthly payments to eventually own the truck. It combines elements of leasing and financing, allowing drivers to build equity while using the vehicle.

2. How Does the Calculator Work?

The calculator uses these formulas:

Where:

• \( Dep \) — Depreciation ($/month)
• \( Fin \) — Finance fee ($/month)
• \( MP \) — Monthly payment ($)
• \( CC \) — Capitalized cost ($)
• \( RV \) — Residual value ($)
• \( T \) — Term (months)
• \( MF \) — Money factor (decimal)

Explanation: The calculation separates the payment into depreciation (the amount you're paying toward ownership) and finance charges (the cost of borrowing).

3. Importance of Lease To Own Calculation

Details: Understanding your lease-to-own payments helps you evaluate whether the agreement makes financial sense compared to other financing options or traditional leases.

4. Using the Calculator

Tips: Enter all values in the specified units. The capitalized cost is typically the truck's price plus any fees. The money factor is similar to an interest rate (divide APR by 2400 to get MF).

5. Frequently Asked Questions (FAQ)

Q1: What's a good money factor for lease to own?
A: Money factors typically range from 0.001 to 0.004. Lower is better (equivalent to 2.4%-9.6% APR).

Q2: How is residual value determined?
A: The leasing company estimates the truck's value at lease end based on make/model, term, and mileage.

Q3: What's included in capitalized cost?
A: Truck price plus any fees (documentation, acquisition, etc.) minus any down payment or trade-in.

Q4: Are there tax benefits to lease to own?
A: Potentially, as payments may be tax-deductible as business expenses. Consult a tax professional.

Q5: What happens at the end of the term?
A: You typically have the option to purchase the truck for the residual value or continue making payments until ownership transfers.