Does your business need a company vehicle for making deliveries, traveling to clients’ offices, carrying equipment and more? Deciding whether buying or leasing a vehicle is advantageous for your business requires you to consider a number of factors, specifically the cost of leasing a truck versus owning.
But how do you know if you are getting a fair rate with your lease? Prices will usually be dictated by the demand for the vehicles and the supply available. You also need to consider several factors that affect the prices so that you can negotiate lower rates. These are some of the factors that may influence the cost of leasing a truck.
What is your Truck Type, Make and Model?
Smaller cars are normally leased at a lower rate than larger vehicles such as an SUV, pickup, or minivan. Also, luxury vehicles like sports cars or convertibles would command a higher rate than a regular car. Trim level, two-wheel drive versus four-wheel drive, engine type (gas or diesel), trailering, and insurance options can also play a factor.
There are certain rentals that require you to pay a brand tax purely based on the demand for their vehicles and the value it is perceived to have. A manufacturer’s reputation for build quality will also become a major determinant in the cost of leasing a truck.
What is the Age of the Truck?
Cars are expected to depreciate over time so the older the car is, the lower the rental cost. The newer the car is, the pricier it will cost to lease. Age brings with it questions regarding durability, fuel economy, and maintainability which tend to reduce the demand for such trucks or cars. New or near-mint trucks will be significantly more expensive than the ones that are more than 10 years old. You’ll need to factor in maintenance costs if the rental or leasing contract does not provide it. Watch out for dents, visible marks, or hidden damages on the truck. It’s important to make these checks on the trucks before signing that lease contract.
How Far are You Travelling?
Rental companies normally cap the miles that you can use with their vehicles – any miles incurred over the allotted cap will result in additional fees. Be aware of policies regarding fuel charges too. Usually, if the rental company provided the vehicle with a full tank, you will be required to return it at the same level. Otherwise, you may be charged up to 2-3x the price of a full tank, regardless of how much was in the tank when you turned over the car.
How Many Vehicles are You Getting?
Truck leasing companies may offer a discount based on the number of vehicles you rent. Negotiate vehicle options and get a quote to make sure your business can afford the lease costs. Leasing your fleet from a single provider may be more cost-effective and economical, so look around for a dealer that rents the types of vehicles you need instead of having to lease your pickup trucks from one dealer and your full-sized van from another.
Where is the Lease-Provider Located?
The stiffer the competition in a certain location, the better the deals and the more room you have to negotiate. In some areas in Ontario, the prices might be slightly lower because customers will be able to choose from a wider variety of vehicles and find cheaper options.
Additional charges may be incurred if you return the car to another location different from the rental origin. There are also some companies that will charge for late drop-offs, so finding a rental company that is closer to your business may be important.
What is the Insurance Coverage?
Companies will ask you to purchase a Collision Damage Waiver (CDW) or Loss Damage Waiver (LDW). This is to relieve the renter of any liability from loss or damage to the car. Check if you can apply your own rental insurance to the rented vehicle.
Shop around for prices before you order your fleet as insurance can amount to a lot of money. As a business owner, you can probably get a blanket policy to cover both your business and your fleet.
When are You Renting the Vehicle?
Vehicle rental is a seasonal business, since the demand for rental vehicles surges in the Spring and shrinks during winter. Like airlines and hotels, more and more truck-rental companies have employed complex algorithms that help them manage inventory that translates to better use of their vehicles. Thus, rental companies are better able to predict demand for their vehicles and may raise prices accordingly.
Do You Need Customization or Any Add-ons?
A seasoned rental provider will ask you what additional equipment your vehicles need. Do you need tailgates, bed liners, tool boxes, lighting, signage, racking, tonneau covers, or lift-gates? Or do you have Health & Safety requirements for first aid kits, fire extinguishers, and back-up horns? Are you looking for new technology such as Electronic Logging Devices (ELD) that automates record-keeping for drivers? Be aware that these add-ons may mean a pricier leasing rate.
What is Your Credit History?
If you’re tight on cash and have a poor credit history, it can be difficult to qualify for a lease. Most low-interest and “no down payment” lease incentives are based on credit approval. Be ready to pay for higher interest rates and a security deposit. if you have bad credit scores, the cost of leasing a truck can be massive.
Total Cost of Ownership – The Thomas Model
When looking at the cost of leasing, be sure to factor in the total cost of ownership. Thomas Solutions offers a model which covers all maintenance costs, has a flexible dents dings and scratches policy, and provides a generous mileage allowance. As seen in the illustration below, our leases could save you thousands of dollars every year.
Contact us at 1-877-479-1388 or email email@example.com for your truck or fleet rental and maintenance needs. With a fleet of over 800 vehicles and growing, Thomas Solutions has a wide array of work vehicles for lease or rent. We service all of Southern Ontario from our locations in Hamilton, Selkirk & Niagara, as well as through our growing list of service partners.