When a company needs to acquire a good reliable work truck, they usually tend to purchase a used vehicle. It’s more affordable in the long run and it provides better value for the business. However, another option that is growing in popularity these days is for companies and contractors to lease their work trucks, rather than making any purchase at all.
Here are some of the reasons why pick-up leasing has become so popular. And also why so many businesses are currently leaning in that direction, as opposed to an outright purchase.
Vehicles Depreciate and Lose Value
Whether you buy a used work truck or one that’s brand-new, the minute you’ve made your purchase it begins to lose its value. All new trucks will quickly become used trucks, and eventually, a used truck will probably have another owner.
One of the larger expenses all fleet managers must confront within their daily business is the initial depreciation of purchasing a work vehicle. A fleet organization can obtain any sort of vehicle they require at a discount price. That helps lower the depreciation expense.
A company that decides to lease a work truck will be able to do lower the depreciation loss which is always associated with purchasing a vehicle from the dealer.
Leased Vehicles Have Less Wear and Tear
You’ll often hear the argument about pick up leasing expressed in something like the following terms: “Well, the vehicle will go through all kinds of wear and tear and get beat up”. This is true of course because work vehicles will sustain more wear and tear than any other type of vehicle.
Anytime a purchasing agent considers how much use their work vehicles will sustain, they usually visualize a 10-year-old model purchased several years ago. That vehicle must have had multiple owners and an entire decade of wear and tear behind it.
Leased trucks tend to hold their value because businesses will typically operate leased trucks for a considerably shorter period.
New Work Trucks Are Less Expensive to Operate
Generally speaking, it is cheaper to operate any newly leased work truck than a purchased work vehicle from a local dealer. This is true even if you take into account the higher cost of fuel expense.
Most used trucks are driven fairly hard and will sustain a significant amount of abuse during their lifetimes. That means parts will wear out faster and need replacement sooner.
All those repairs eventually add up and become a significant expense, and they all have to come out of your own pocket. A typical four-year-old vehicle with 100,000 miles on it will generally cost somewhere in the neighborhood of $800-$1200 in annual maintenance. A newly leased vehicle will probably have any repairs covered under its original warranty.
New Work Trucks Get better Gas Mileage
Many new work trucks enjoy superior gas mileage, often in the neighborhood of 26 miles to the gallon. This ends up saving you a ton of money on fuel costs over the full lifecycle of your vehicle. When you lease a new work vehicle, it will lower your fuel expenses by thousands of dollars every single year. That can add up to be a ton of money if you have several work vehicles in your fleet.
New pickup trucks also have improved technology that helps you to economize on fuel. That also provides better performance to boot.
Wherever you purchase a used work truck, you will need to attach whatever kind of toolbox you need. Possibly some ladder racks, and maybe even some graphics which promote your company. All this calls to invest more time and more money in the vehicle.
Many times you can lease a work truck from a dealer. They will take care of the upfitting for you, so it doesn’t need to come out of your pocket.
Regardless of the type of business, you’re in, you might be able to save a ton of money on upfitting if you work with the right type of pickup leasing agent.
Contractors who are involved with roofing, HVAC, plumbing, landscaping, and many other types of business can realize tremendous savings by having the upfitting done for them by the leasing company. If you were to purchase a new or used vehicle from a dealer, this would seldom be an option.
Leasing Aligns with Actual Market Depreciation
When you buy a fleet of work vehicles, some may need heavy repairs. Others may only require basic maintenance such as oil changes.
It seldom works out that standard account book depreciation matches the market value depreciation. This can certainly lead to some major accounting headaches. Also, it could even cause you to lose money.
When you lease your work trucks, your business will be able to standardize vehicles and tailor all of your leases to be in alignment with the actual mileage on those vehicles.
It’s much easier to maintain a fleet of work trucks that have been leased because it’s easier to budget and establish lower operating costs. You may even be able to get some guidance from them on how to keep your operating costs under control.
The fact that leasing your work fleet trucks can save you time, upgrade your company image, and maintain high employee morale, makes leasing your work trucks the most appealing option for a great many companies.
In effect, you will be not only safeguarding your financial assets, but you will also be making it safer for your company’s most valuable assets, which are your employees. Given the fact that leasing your work vehicles provides so many advantages over purchasing them outright, it’s not surprising that pick up leasing has become the go-to option for so many companies today. Consider these points if you’re facing this decision, and see if leasing makes sense for your company as well.