Logistics are a crucial part of any business that deals with physical products.
Many companies rely on logistics to distribute goods to customers, receive inventory from suppliers, or transport physical stock across various locations. In one way or another, logistics are involved.
One of the logistical questions many companies must face at some point is whether to buy their own trucking fleet or to lease one from a fleet leasing company.
If you’ve never considered leasing trucks before, this article is for you. In it, we’ll go over all the benefits of leasing trucks over buying them. Let’s start!
1. Pay fewer upfront costs
The most obvious benefit of leasing trucks is that there are fewer upfront costs. Most commercial trucks cost at least $100,000. That’s a lot of money to give up that you could invest elsewhere in your business.
In fact, by saving the money that you would have spent on a large truck (or trucks) and investing it in other parts of your business, you may end up with a better overall return on investment (ROI). For example, $100,000 invested in product development or marketing could bring in more yield than a depreciating truck would.
2. Experience less hassle
Purchasing trucks can be a hassle. Between the shopping, financing, licensing, permitting, and taxing, there are a lot of hoops to jump through.
But if you lease trucks, you can avoid all this. The leasing company takes care of it for you. In some cases, they’ll even take care of the training, hiring, and replacing of truck drivers when necessary (after all, trucking is a relatively transient field of work).
3. Experience more flexibility
Another benefit of leasing trucks is flexibility.
You can have your leasing contract start and end whenever is convenient for you (keeping in mind that leasing terms usually last months, while renting agreements are for shorter periods). Every part of a truck lease is negotiable.
Plus, if your business’s trucking needs are seasonal or temporary, leasing may offer more flexibility than buying.
4. Maintain predictable monthly costs
Unlike owning trucks, leasing trucks helps you maintain predictable monthly costs.
How? There’s no need to worry about unexpected repairs or maintenance tasks (think oil changes, tire replacements, and routine inspections). Instead, you pay a flat rate, and the leasing company takes care of the rest.
Having no hidden costs makes it easier to keep a budget and plan ahead.
5. Stay immune to depreciation costs
As with most vehicles, one of the downsides of owning trucks is that they depreciate in value over time. But when you lease them, the depreciation doesn’t affect you.
Leased trucks aren’t considered an asset, so they won’t hurt your balance sheet. Instead, they become a regular operating cost (that you can still deduct as a business expense on your taxes, by the way).
6. Keep your fleet up-to-date
On top of not feeling the financial effects of depreciation, those who lease trucks can have access to the latest truck models and equipment.
Simply trade in your truck(s) every few years to keep up with the latest models and upgrades. Experience all the benefits of owning new equipment without the hassle of purchasing it yourself.
7. Focus on what you do best
Lastly, leasing trucks helps you focus on your core competencies. Logistics may not be your field of expertise, and that’s okay. By outsourcing the heavy lifting of logistics to a leasing company, you can spend more time doing what you do best.
This is a win-win for all involved because it allows everyone to leverage their comparative advantage.
The bottom line
Whether you own a small start-up or an established enterprise, leasing commercial trucks could be just what you need to take your business to the next level. Carefully consider the benefits outlined above and then make whatever decision is best for your company.