As a fleet owner, you have a lot on your plate, and with a lot of information out there sometimes it can be hard to make a firm decision, especially when it comes to growing your business.
Some aspects that can be particularly challenging are deciding how to build your fleet or how to start your own trucking company. Should you lease? Should you buy? Although it’s often said that owning is better than renting, when it comes to your fleet, there are some benefits to leasing.
In fact, many large trucking fleets today are leasing because it is often the easiest and most economical way to upgrade aging trucks and comply with stricter emission standards.
Why Leasing is a Good Way to Build Your Fleet
Before listing out the benefits, let’s make sure we’re all clear on what leasing means. It’s similar to renting, but rather than using the truck for a few days, you’re using it for at least one year. When you lease, you’re paying for the use of a vehicle instead of paying for the asset itself.
There are two main types of leases: Open-end leases and Closed-end leases. Open-end leases typically start with a minimum lease term and then allows for additional month-to-month leasing options, while closed-end leases is a fixed term leasing agreement with fixed monthly payments. If you cause excess wear and tear, exceed predetermined mileage or cause damage, you could be subject to penalties.
Now that you have a clear idea of what a lease is, let’s take a look at some of the benefits:
- Flexibility: How often do you replace your fleet? With leases, the average term is three years, meaning you could have the option to potentially replace your trucks every three years. Leases allow for less liability and cost, which provide more flexibility.
In addition to replacing vehicles, leases will enable you to scale your fleet according to the market and test out equipment before making a big purchase for your company.
- Lower Maintenance and Repair Expenses:
Full-service leases cover maintenance and repairs at reasonable monthly costs,
so you don’t have to worry about routine inspections, oil changes or tire maintenance.
- Focus on Your Business Model: New truck purchases
require substantial up-front costs and sales tax and finance charges. When you
lease, you can turn this capital to support programs and purchases that
directly enhance your company’s business model.
- Extra Assistance: Fleet leasing companies with
experience in the field will be able to understand your needs and concerns and
address them appropriately. They can offer solutions based on real-life past
experiences and assist you in the day-to-day details of running your fleet and
business. A trucking load board can also help you get
loads delivered more quickly.
- Freedom to Choose: Leases allow you a little time to get accustomed to different trucks and equipment, and at the end of the day, you haven’t lost the opportunity to purchase. When you partner with the right leasing company, your lease is more like an extended test drive than a final say.
Leasing can be a solution for fleet owners to grow their businesses. While we’ve provided some of the benefits of leasing, it’s important to talk to a professional about your situation before making any decisions.
If you’re interested in other helpful resources take a look at our blog or sign up here for access to the world’s largest FREE load board.