Whether you have a small fleet in the early stages of fleet expansion or an established carrier with thousands of trucks on the road, there are several factors to consider regarding vehicle acquisition. For some, owning equipment outright makes the most sense. For others, leasing or a combination of owning and leasing is the best option. When deciding how to grow your fleet, it is important to consider certain things.
With interest rates rising, financing new equipment is increasingly expensive for private fleets and trucking companies looking to add to existing trucks or replace them with new equipment. If your company becomes capital challenged with having to make a substantial down payment or pay the full amount to acquire assets, the monthly interest payments can take a toll on your bottom line.
Predicting truck operating costs such as maintenance and spare parts costs as well as forecasting customer demand, especially in this economic climate, are also challenging. For those seeking more stability in accounting, managing equipment, or more flexibility in right-sizing your fleet (ability to scale the fleet size up or down) based on demand, leasing or renting trucks is a lucrative option worth considering.
Full-service leasing is a great alternative to owning trucks for those who want simplified cost accounting, as monthly lease rates are predefined for the term, so there are no surprises or fluctuations due to unexpected maintenance costs. Lease payments are lower due to leveraging the lessor’s buying power, maintenance expertise, and resale capabilities. The lessee also avoids having to pay the entire acquisition cost outright or being left with a depreciating asset if business conditions change and they are forced to sell off equipment.
However, for companies whose primary business is trucking or those who have sufficient cash reserves, full truck ownership or operating a mixed fleet of owned and leased trucks can be considered. The following are scenarios where it makes the most sense for truck ownership:
· If you have cash to invest in new equipment.
