The quick answer
Compare a truck loan and lease over the same expected period of use. Review upfront cash, all payments, fees, ownership, maintenance and the end-of-term obligation. A lease’s lower payment may reflect a residual or purchase option; a loan’s payment alone also leaves out operating and transaction costs.
Ownership and the end of the agreement
For a purchase financed by a loan, ask how the security interest is registered and released after repayment. For a lease, identify who owns the truck during the agreement and exactly what happens at the end.
A purchase option can be a fixed amount, a formula or another specified basis. If returning the truck is possible, check the required condition and any mileage or hour limits. Do not infer ownership from the number of payments.
Cash paid over the same period
Write down every upfront amount, periodic payment, fee and expected end-of-term amount. Include relevant taxes using professional guidance. Compare both agreements at the point when you expect to sell, keep or replace the vehicle.
If an offer has a balloon or residual, show that amount as a separate future cash requirement. A lower monthly payment does not remove the obligation; it changes when the money is due.
Control, flexibility and operating responsibilities
Check who pays for servicing, repairs, insurance and inspections. Review permission for modifications, different operating territories, subcontracted use and disposal. These details can matter more than a small payment difference for a vocational truck.
Ask for written early payout or termination provisions. If you expect to replace the truck before the agreement ends, use that timing in the comparison.
Tax treatment needs its own review
BDC provides a useful general comparison of buying and leasing equipment. CRA guidance explains that business-use vehicle leasing costs are subject to tax rules and, for some vehicle classes, particular limits.
Have an accountant compare the actual agreements for your business and vehicle classification. Avoid choosing a structure on a blanket promise that every payment is deductible or that one option always has a better tax result.
Before you take the next step
- Same truck, price and expected period of use
- All upfront amounts and periodic payments
- Ownership and purchase-option details
- Return, mileage, hour and condition requirements
- Maintenance, insurance and modification responsibilities
- Early exit provisions and tax review
Frequently asked questions
Is leasing better for cash flow?
It can change the timing of cash requirements, but the answer depends on the deposit, payments and end-of-term terms. Model the complete schedule alongside operating costs.
Can a lease have a large final payment?
Yes, depending on the agreement. Ask whether the residual or purchase option is optional, mandatory or tied to another end-of-term condition.
Which option is cheaper?
There is no universal answer. Compare actual offers, tax treatment, expected resale value and the cost of using or ending each agreement on your planned timeline.
This page provides general planning information. Financing availability, approval, rates and terms must be confirmed with the lender. Our enquiry form does not authorize a credit check.
Sources & further reading
Official resources for checking the rules that apply to your equipment and operation. These organizations do not endorse this website.
- Buying or leasing business equipment — BDC
- Motor vehicle leasing costs — Canada Revenue Agency
- Calculating input tax credits — Canada Revenue Agency