Why Trucking Fleets Are Leasing Equipment Instead of Purchasing
Trucking fleets of all sizes are joining the debate of leasing versus owning their vehicles. While ownership give you full control of your fleet, leasing equipment provides a number of financial advantages that are becoming hard to ignore. In addition to avoiding the massive down payment that comes with buying a truck, carrying companies can skip out on upkeep costs and get access to the newest and best models. For many in this industry, leasing is simply the obvious choice.
It’s widely accepted that if you can afford the initial deposit, you should be able to save money in the long run by buying instead of leasing. While this is true for leases that go on indefinitely, in most cases people are saving money by not buying a rig outright. The down payment is the biggest hurdle carriers want to avoid, since it can severely restrict your cash flow. Simply by not overspending on the upfront costs of ownership, you may be able to take more business and make more money with a leased fleet. Even if you keep those leases for a good number of years, the increased payload might outweigh all the monthly payments.
While you’re generating money through work, leasing equipment will also help you save money on the cost of repairs. Truck owners assume the responsibility of maintenance, and that’s a huge obligation when it comes to keeping your vehicles on the road. While owning a fleet means you can write off the depreciation, leasing means you don’t have to pay to keep those devaluing vehicles running.
If you buy a truck, you have to use it for a substantial amount of time to make good on the investment. So what happens when a newer, better model becomes available? If you bought the truck, there’s no simple way to upgrade without spending a bunch more money. If you’re leasing, however, you can trade in the older model when the terms are up and head back to work with a new and improved vehicle. Equipment leasing allows for this flexibility, which can translate to adaptability and resiliency – two things any business needs to thrive.
Trucking fleets have to keep their assets in good condition or business will suffer. By leasing equipment, these carriers can avoid being hamstrung by dated equipment, while at the same time saving money that can be reinvested in the company. While there are still benefits to owning, leasing might actually have a few more upsides.