Should You Lease Your New Truck?

Leasing seems to have hit its stride in the past few years. More than 30 percent of all new vehicle transactions are now leases, and every new sales report suggests this leasing trend won't be stopping any time soon.

Although trucks aren't leased as often as sedans or SUVs, the percentage of trucks leased has more than doubled in the last five years, according to Edmunds.com's transaction data. Are those people leasing trucks onto something you should consider?

There is no single answer that will work for everybody, but a look at the pros and cons should make your decision a lot clearer.

Truck Leasing Pros:

Lower Payments: Something to know about new trucks: They aren't cheap.

The least expensive pick-up truck offered by Chevrolet is the Colorado, which has a starting price that is roughly $7,000 higher than that of the brand's least expensive car, the Spark. The least expensive Ford F-150 is about $12,000 more than its entry-level car, the Fiesta. Pick-up trucks can easily cost upwards of $50,000 and with high selling prices come high payments.

The average finance payment of trucks sold between January and September 2016 is $615 per month, compared to the average lease payment of $431 in the same time period, according to Edmunds.com's transaction data. That difference is nearly $200 per month.

A Drop in Resale Value? It's Not Your Problem: Right now, the resale values of trucks are pretty strong. But when gas prices rise, the value of vehicles that don't get great MPG usually drops.

If the value of your leased truck plummets, you won't feel the sting. Provided you fulfill the terms of the lease, you're free to drop off the lease at its conclusion, and the bank is the one that has to worry about the loss of value, not you.

You Can Get the Latest and Greatest Truck: The average car owner keeps a vehicle for about six and a half years, but that doesn't mean all drivers want to spend that much time sitting in the same seat. If you have the itch to get into something new every few years, you'll have an easier time doing it in a lease than you would in a purchase. When the lease is over, you can hand over the keys to the dealer and start fresh — provided you haven't incurred any excess mileage charges.

Still Love It? You Can Buy It: When your lease is up, you can give the truck back to the bank and get something else, but you don't have to. Most leases contracts allow you to buy out the truck and keep it if it's still right for you. You'd buy it for the residual value, which was determined when you began the lease. But note: You will pay more over the long haul if you buy out your leased vehicle than you would have if you'd bought it upfront.

Truck Leasing Cons:

You'll Probably Never Own the Truck: The allure of a low payment may be tempting, but there is no way around this fact: At the end of the lease, you'll own nothing. Had you bought the truck, however, you might be halfway (or more) to paying it off.

Many shoppers go from one lease to another lease. This cycle prevents you from ever owning a vehicle or getting a break from making payments.

A New Down Payment with Each New Lease: If you look forward to leasing a new truck every three years, you should keep in mind that chances are good you'll have to make a new down payment to start a new lease every three years, too. Start-up costs for most lease specials run about $3,000.

It's true that if you are leasing, you may have equity in the truck that could be used as a down payment towards something new. However, there is no guarantee this will happen, and chances are it won't. Counting on using equity from a lease as a down payment towards something else is probably a bad idea.

Excessive Wear and Tear Charges: Maybe you're looking at a truck because you want to haul, tow and go off-roading. But these activities can be tough on a vehicle, and being tough on a vehicle can be costly if you're leasing.

When your lease is done and you give the truck back to the bank, the lender is going to want it to be in pretty good shape so it can be resold. If the truck has more than its fair share of bumps and bruises, you will probably be hit with "excess wear and tear" charges. These can range from hundreds to thousands of dollars. A charge like that can eat up the monthly payment savings you've received for leasing instead of buying.

If you're a weekend warrior who will be using the truck for Home Depot runs or moving the occasional couch, think about investing in a bedliner and all-season floor mats. That will usually be enough to mitigate the chances of excessive wear and tear charges. But if you're a hard-core off-roader, you might want to be a truck-buyer, too.

A Good Truck Lease Might Be Hard to Find: Part of the allure of leasing is getting a low payment. But not all trucks have factory lease specials, and some of the advertised leases are for models that might not appeal to you.

If you're planning to spend more time in your truck off-road than on, if you like keeping vehicles forever, or if you can't stomach the idea of never-ending payments, leasing probably isn't for you. But if you're doing light duty in the truck, want to keep your monthly payments low, and would like to get something fresh and new every few years, leasing a truck may be just right for you.