Buying or Leasing the Work Truck

The truck question usually arrives as “which is cheaper, the lease or the loan?” The honest answer is that it depends on three numbers you can find before you sign: how many miles you drive, what the truck will be worth when you are done with it, and the interest rate. Then come the tax rules, which treat a lease and a purchase differently. Here is how to run both halves for your own truck.

Compare the same years, all the money

A lease quote and a loan quote are built to look different: one shows a low monthly payment and nothing at the end, the other a higher payment and a truck you keep. To compare them, pick the number of years you would keep the truck either way and add up everything that leaves your account in those years, minus anything that comes back.

• Buying: the down payment, the loan payments, minus what you get when you sell or trade the truck after paying off what you still owe on it.
• Leasing: the amount due at signing, the monthly payments, and the charges at turn-in: a disposition fee, excess miles and excess wear. You end with no truck.

For the interest rate, the Federal Reserve’s G.19 release gives a reference point: the average rate on a 60-month new-car loan at commercial banks was 7.54% in August 2026 (preliminary), against 7.65% for 2025 as a whole. That series is consumer auto loans; a business truck loan or equipment financing may price differently, and Business Line of Credit vs. SBA Loan vs. Equipment Financing covers those.

Say a plumber is choosing between buying a $55,000 pickup with $5,000 down and $50,000 financed at 7.5% for 60 months (a payment of about $1,002), and leasing the same truck for 36 months at $750 a month with $3,000 due at signing, a 12,000-mile yearly allowance, 25 cents a mile over it, and a $400 turn-in fee. Over three years:

At the mileage allowance, the two are nearly even. Drive 20,000 miles a year and the lease costs $6,000 more than that. But move one assumption: if the truck sells for $28,000 instead of $33,000, buying costs $35,333. The resale value is the number to research hardest, using real sale prices for the same model at that age and mileage, not the dealer’s guess. Run your own numbers before tax, then look at the tax rules below with your preparer.

Read the lease as a business lease

Regulation M, the federal rule that requires standard lease disclosures, covers a consumer lease: one for “personal, family, or household purposes.” The regulation says plainly that a consumer lease does not include “a lease for agricultural, business, or commercial purposes or a lease made to an organization.” A truck leased for your business, or in your company’s name, is outside it.

That matters because the consumer disclosures are the ones that flag the expensive parts. In a consumer motor vehicle lease whose lessor sets wear standards, the regulation calls for a notice substantially similar to “You may be charged for excessive wear based on our standards for normal use,” which must also “specify the amount or method for determining any charge for excess mileage.” Its model early-termination notice for a motor vehicle lease reads: “You may have to pay a substantial charge if you end this lease early. The charge may be up to several thousand dollars.” A business lease is not required to say any of this, so find each item in the contract yourself:

1. The yearly mileage allowance and the charge per mile over it. Compare it with last year’s odometer readings, not a hopeful guess.
2. The standard for “excess wear.” Work trucks get dents, bed scratches and worn seats; ask what the lessor will charge for them.
3. The early termination charge, in dollars, at 12 and 24 months.
4. Whether you may install racks, shelving, a toolbox or a service body, and whether it must come out, at your cost, before turn-in.
5. Whether there is a purchase option, and at what price.

The tax side of a lease

IRS Publication 463 covers leased vehicles, and four of its rules change the comparison:

• You deduct the business share of each payment. Using actual expenses, “you can deduct the part of each lease payment that is for the use of the vehicle in your business,” and none of the part for personal use, such as commuting. Advance payments are spread over the whole lease period.
• The standard mileage rate locks in. “If you want to use the standard mileage rate for a car you lease, you must use it for the entire lease period.”
• The inclusion amount. For a lease of 30 days or more on a passenger automobile, you may have to reduce your lease deduction each year by an “inclusion amount,” which has an effect similar to the depreciation caps an owner faces. For leases beginning in 2026, Rev. Proc. 2026-15’s table starts at a fair market value over $62,000. The amounts are small: for a value between $70,000 and $72,000 they are $51, $109 and $160 for the first three years, before proration and the business-use percentage. Like the depreciation caps, they apply to passenger automobiles, which for these rules means a car, truck or van rated at 6,000 pounds gross vehicle weight or less.
• A lease that is really a purchase is a purchase. “You can’t deduct any payments you make to buy a car, truck, or van even if the payments are called ‘lease payments.’” A lease-to-own deal with a token buyout deserves a question to your preparer before you sign.

The tax side of buying

Owning brings depreciation, and with it the fast write-offs. Publication 946 is clear that a lessee usually gets neither: “if you lease property from someone to use in your trade or business or for the production of income, generally you cannot depreciate its cost because you do not retain the incidents of ownership,” and Section 179 requires property “acquired by purchase.” How much a purchase lets you write off, and how fast, turns on the truck’s weight rating and your business use; Writing Off the Truck covers the 2026 Section 179 limits, the 6,000-pound line and the heavy-vehicle cap, bonus depreciation after the 2025 law, the log the IRS expects and the recapture, with a worked example.

For this comparison, keep one thing in mind: a fast write-off brings the deduction forward, and some of it comes back as income when you sell or if business use drops to 50% or less. In the example above the truck is sold after three years, so ask your preparer what the sale would bring back before you count the write-off as a saving.

Where each one fits

In the example, two numbers decided it: the miles and the resale value. That points to where each option fits:

• A lease fits when your miles stay under the allowance, the truck stays close to stock, you want a new one every few years, and cash at the start matters more than the total.
• Buying fits when you drive a lot, build out the truck with racks or a service body, keep trucks until they are worn, or put them through work that a lessor would call excess wear.

Before you sign either one

1. Pull last year’s miles from your log and the odometer.
2. Get the loan rate in writing and the lease’s money factor or rate, its allowance, its overage charge and its fees.
3. Research the resale value of the same truck at the end of your term.
4. Run the three-column table with your own numbers.
5. Read the GVWR on the door label, and take both options to your tax preparer before you choose.

General information, not legal or tax advice. Rules change and vary by state; check with the agency named above or a professional for your situation.