We often get asked the question: Is it better to lease, rent, or own vehicles? The answer is that all three can make sense depending on your fleet’s circumstances.
If you are seeing a huge increase in your maintenance and repair costs, are having a hard time attracting new drivers, and are having to turn down business, it is probably time to either update your existing equipment or add vehicles to your fleet.
If you are replacing existing assets or you believe you have a long-term need to increase the size of your fleet, then you face the lease vs. buy decision. When you choose the leasing option, it frees up working capital that you can use for other areas of your business.
When you choose a full-service lease, you also get the benefit of taking the maintenance burden away. Your leasing company assumes the responsibility for keeping your assets in good working order and you know each month what the cost of the equipment and maintenance will be. There are no surprises.
I do not mean to imply that buying an asset never makes sense. There are some circumstances in which buying the asset is the right choice, for example, if you plan to keep the truck for an extended period of time and if there are tax benefits to purchasing the asset. Make sure you do the lease vs. buy calculation when you are looking at replacing assets or growing your fleet in order to determine which option is right for you.
Remember that leasing also allows you to test new technology on a limited basis to see how it performs in your fleet’s unique operating environment. Having a truck outfitted with the latest technology is also a great driver recruiting tool as today’s younger drivers expect to have “cool” technology available to them in the workplace.
That leaves rental as an option. Renting a truck or trailer makes sense when you have a seasonal or short-term need for a truck or trailer but know that long term the asset will end up being underutilized.
Rental is also a great way to test out a new technology or a new component to see how it will perform in your fleet and to help you decide if you need to add it your vehicle specs going forward without making a big investment based only on information from the manufacturer. You can get real-world, first-hand data on how the technology or component performs for you without making a major investment.
The lease, buy, rent question is not necessarily an either/or choice. There are actually times when your fleet may have a mix of all three and as long as that is what makes the most sense for your fleet, then all three is the perfect answer.
Jane Clark focuses on managing the member services operation at NationaLease as vice president of member services. She works to strengthen member relationships, reduce member costs, and improve collaboration within the NationaLease supporting groups.