The decision between buy vs. lease becomes even harder when you’re considering commercial trucks instead of personal vehicles. Just a few factors you’ll need to consider include:
- Upfront and Ongoing Costs
- Asset Control
- Hidden Costs
- Technology
There’s no right answer, but you should find one option appealing more to your business’s current circumstances.
The Pros and Cons of Buying and Owning Commercial Trucks
Most commercial fleet operators own their trucks. Buying instead of leasing provides a sense of control over physical assets, and those physical assets can be added to your balance sheet to act as collateral and help improve the value of your company. You’ll also be able to customize the truck with total freedom — an important concern, whether you’re branding or adding new features.
Hidden costs are the main drawback that come with buying over leasing. The purchase price itself will be higher, and you’ll need to account for:
- Tax and Licensing
- Part Replacements
- Any Fines Due to Safety Violations
- Ongoing Repairs and Maintenance Work
Committing to ongoing maintenance work may mean recruiting and managing a maintenance shop and staff, and you’ll find it harder to attract experienced Milwaukee, Madison, and Green Bay drivers if vehicles are in poor condition.
The Pros and Cons of Leasing Commercial Trucks
Leasing provides the equipment you need without high upfront costs or the credit constraints associated with ownership. You get predictable monthly payments and excellent flexibility, meaning you can put the capital meant for a new truck elsewhere in your business.
Additional benefits include:
- Removing Most Hidden Costs
- Avoiding Depreciation
- Keeping Up With Technology Advancements
If you want premium models that attract and retain drivers, you might want to consider leasing.
However, leasing does come with some drawbacks. Your lease term may be subject to some restrictions, and breaking them may invalidate your deal or see you facing hefty charges. More importantly, the money you spend each month won’t actually be building value in your company.
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