Truck leasing or ownership? It is a decision that many business owners have to deal with when it comes to acquiring transportation assets for their operations. Each option comes with its own advantages and disadvantages and the company must weigh which offers the better solution for their needs.
As a business grows, and the fleet assets become constrained, a difficult decision needs to be made: Should I engage in vehicle or truck leasing to grow my commercial fleet? It is an important choice because that decision could impact the company’s cash flow and bottom line.
To have a clearer picture on how to make the best choice for your business, here are the three primary factors to consider before making the investment.
The primary driver for growing your business is access to capital. Simply put, in order to make money you have to spend money. A smart business owner makes practical choices to lessen financial risk while turning a profit. You can avoid committing to a huge capital outlay especially if you have a low credit score and have to contend with high interest rates. Truck leasing can give your business a cash flow advantage and flexibility to increase and decrease the number of vehicles in your fleet depending on the needs of your business.
Fleet ownership entails many hidden costs. Things such as on-going maintenance of tires, brakes and other consumables such as steering wheel and brake fluids are just to name few. Some companies may need to put up their own maintenance shop to service their vehicles exclusively, but it would also mean recruiting and managing skilled staff. If maintenance is not kept up to standard, there could be difficulty in attracting and retaining drivers due to poor vehicles. Then there are the costs of taxes and licensing and fines accrued due to safety violations.
Truck leasing eliminates the hidden costs of ownership. Expenses such as overhead, towing, taxes, washing, acquiring substitute vehicles, licensing and fuel, and other hard costs are taken care of by the leasing company. Maintenance and repair costs are also covered. Full-service leases cover maintenance and repairs as part of the agreement with the client.
An owned vehicle may become costly for a business particularly when it comes to downtime due to repairs or maintenance. Without a substitute vehicle to replace the serviced one, productivity could be affected.
Leasing alleviates these hassles. A rented vehicle can help business owners avoid downtime and lost business opportunities due to vehicle breakdowns since they will be supplied with a readily available substitute vehicle. This saves you valuable time and keeps the operations uninterrupted. The less time that is taken away from your business because of transportation issues, the more time could be spent focusing on growing the business.
Most companies today prefer to focus on their core competencies and managing a fleet of trucks may not be your part of your expertise. Truck leasing can be a wise decision especially if you choose a company that is run by competent and experienced professionals who know the ins and outs of the fleet management business.
Do you need customized work trucks? Contact us at 1-877-479-1388 or email Steve Gruber at email@example.com for your car, truck or fleet rental and no-term leasing needs. We have locations in Hamilton, Selkirk & Niagara and service all of Ontario through our partner network. With a fleet of over 800 vehicles and growing, Thomas Solutions has a wide array of work vehicles for lease or rent, and an expert team that provides fleet management services for large industrial firms.