Lease or Buy?
5. What are the perceived benefits of ownership and leasing?
The benefits of leasing trucks are financial and operational. Financially, a company can preserve capital for other parts of its business that generate a higher return. Operationally, it allows a company to focus on core functions of its business.
Truck ownership has been perceived to provide better control, which may or may not be the case. In many situations, there is inherent risk associated with owning trucks. Some of these risks include the value of the equipment at trade-in time, unpredictable maintenance costs throughout the equipment life, obsolete or stranded assets due to an improper replacement cycle, and increased costs caused by hiring, training, and tooling technicians to keep up with ever-changing truck technology. Those risks make it difficult, if not impossible, for a company to maintain a stable cash flow. Equipment failures, even when they’re covered under warranty, can create delivery delays and adversely affect your company’s income.
Often, leasing can provide considerable flexibility to meet short-term and long-term equipment needs by custom tailoring a lease and maintenance package that matches the truck’s useful life. Leasing may result in a more stable cash flow as fleets make one monthly fixed payment for their trucks and their maintenance. A leasing company may, in some cases, offer a lower monthly payment than what you would pay to finance a truck since it uses the truck’s residual value in determining the lease payment. Some leasing companies offer substitute vehicle programs that can provide comparably equipped replacement units while your trucks are being serviced or in the event they require additional time in the shop. In the long run, the lease and maintenance package may allow your company to maximize uptime and productivity so that your drivers continue making their deliveries and earning your company money.
Olen Hunter is director of sales for Bellevue, Wash.-based PACCAR Leasing
Company (PacLease). He has 16 years of full service leasing experience.
PacLease provides customized full-service lease, rental and contract maintenance programs designed to meet the specific needs of customers.
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