Having reliable equipment you can count on is extremely important. The decision of whether to own or lease should not be taken lightly. How you pay for that asset — buying or leasing — also requires careful thought. Either way, you are entering into a contract that you will have to live with for a long time. And with leasing, that contract can be anywhere from three to seven years.
Before making that decision, it’s wise to outline the specific requirements of your operation. If you are a private fleet, this includes getting product from your distribution center to your ultimate customer. You need to gather information on the weight and dimensions of your product, know the size of the orders you will be delivering, know how you will load and unload the product, and fully understand customer delivery expectations.
Having all that information helps you determine the size of the vehicles you need and still accommodate any ancillary equipment you have to carry to help you load and unload.
Once you have determined your equipment needs, only then can you turn to the financial side. Make sure you understand the obligation a lease places on your balance sheet and on your ongoing operational expenses. Decide which makes more sense: a full-service lease or a finance lease.
Under a full-service lease, you are including not only the financing of the asset but also its maintenance and repair. With a finance lease, you are just paying for the vehicle itself; maintenance and repair are separate transactions.
Some fleets like knowing what their fixed costs are each month or they don’t want the hassle of maintaining their vehicles. If that sounds like your operation, then a full-service lease may be the better option. If you have bay space availability and technician proficiency to handle maintenance and repair in-house, then a finance lease might be the best solution. There is also the possibility of a full-service lease with a provider willing to perform the maintenance on-site, giving you all of the convenience of ownership without all of the hassles of ownership
When selecting a leasing option, look for a company that will allow you to customize your lease. Some companies allow skip payments, seasonal plans, flexible monthly plans, or other options that allow you to tailor the lease to better fit your needs.
The right lender and the right lease (with the right terms) can not only help you get in the equipment you need but also ensure you have a payment plan you can live with throughout the terms of the lease.