Lease or Buy- Critical Decisions Small Business Owners Should Make
Many small businesses are trying to use what they have to expand their operations and prioritize clients’ needs. If it’s a company that requires more than one truck to haul equipment, supplies, and other tasks, the question of whether to own or lease always comes up. Owning company trucks increases the business assets but is it the right decision to make, especially when the company is still young. Also, at this point, you may prioritize other investments such as acquiring stock and managing your workforce than buying new vehicles. At the moment, the business may not afford the capital required to invest in a fleet of trucks, but you can lease. Of course, you may need to find out about GASB 87 compliance to make sure that your documentation will be in check when it comes to signing any sort of agreement and comply with any relevant standards, as well as anything else if you are new to leasing. If you’re perhaps wondering why you should consider leasing, take a look at the following benefits that it can offer:
Fewer Maintenance and Repairs at Your Expense
Owning trucks comes with its share of expenses. The vehicles need to be well maintained and repair works done when required to ensure they operate efficiently. You may want to change diesel parts that are worn out or damaged and at the same time, make sure you source from credible suppliers at competitive rates. This can be tedious, and costly especially when you have several trucks to maintain. The exercise may take much of your time, but you can lease instead. A full-service lease covers the cost of repairs and maintenance. Also, you get a replacement when the current vehicle breaks down.
Buying trucks can cost a considerable amount of money, which you may not have currently. Leasing provides a cheaper way of acquiring the vehicles you need to run the business efficiently. It may take years before you can finally afford to buy all the trucks your business needs, but in the meantime, lease. Also, you won’t have to pay heft sales taxes, towing and overhead charges.
Quality Trucks- No Depreciation
You already know that the minute you start using a new truck, its value gradually goes down. It also gets old with time, and better, more efficient models replace it. When leasing, you have the best quality and models at your disposal. You don’t have to worry about the truck depreciating and affecting the company’s net worth.
You Meet Company Needs
Buying trucks means that you have a particular number and size of trucks to work with. If your needs change, you won’t have the necessary transport vehicles to handle the task unless you lease. Leasing gives you a more comprehensive range of trucks to choose from depending on your needs. Business needs fluctuate, and sometimes you may need more vehicles or a particular design and size. When leasing, you acquire the trucks according to demand. When business is down, you lease fewer vehicles but increase when the transport needs grow. When you have a fleet, it remains idle or underutilized in slow seasons, but you will still have to maintain and pay the drivers.
Even when you own several company trucks, you can still go ahead and lease to take care of the rising transport demands. It’s a quick solution when you need more vehicles urgently.