Lease vs. Own: How Do You Choose?
Penske can help you decide if it is better to lease or buy a truck for your business
Should I lease or own my commercial truck fleet? It is an important choice, but choosing to lease or own does not have to be an either-or decision. Many fleets mix both options to maximize their operations and better serve their customers.
Factors such as operation type, truck configurations, organizational preferences, routes, seasonality and financial considerations can influence fleet operators' decisions to lease or buy heavy-duty trucks. There are pros and cons to both approaches. Penske can help you decide what makes the most sense for your business.
Key Benefits of a Truck Lease
Roughly two-thirds of private fleet operators utilize leased vehicles either in part or all of their fleet. There are several reasons why a lease makes sense.
1. Leasing offers financial flexibility, improved cash flow and a predictable budget.
Leasing allows fleet operators to obtain equipment without the upfront costs and credit constraints of ownership. Leasing provides a lower monthly payment as it is based on the portion of the asset used, not the entire asset. Plus, fleets enjoy the benefits of predictable, guaranteed maintenance and 100% tax deductibility.
2. Leasing removes the hidden cost of ownership.
Hidden costs of ownership include ongoing maintenance and repairs, driver and vehicle downtime, substitute vehicles, missed deliveries, and administrative duties. Penske offers a comparative value analysis (CVA) that evaluates the costs and benefits of leasing and owning based on a review of a company's transportation expenses. Penske uses a fleet's financial data or industry benchmarks to compare its current overall cost of ownership with the predictable costs and savings of a full-service lease.
3. Leasing reduces maintenance and repair expenses.
Maintenance is included in Penske's full-service leases, minimizing the risk of unexpected maintenance expenses. Preventive maintenance is scheduled at recommended intervals to maximize vehicle performance and uptime. Plus, Penske tracks and monitors repair information, performance reporting, maintenance records and scheduling, and fleet managers have one-click online access to fleet information.
4. Leasing minimizes indirect costs and hassles associated with compliance issues.
As part of a lease, Penske handles permitting, taxes and licensing. Additionally, Penske's comprehensive maintenance program reduces the risk of fines due to safety violations.
5. Leasing helps fleets focus on what they do best.
Leasing helps fleets better focus on their business model and core competencies rather than obtaining, maintaining and disposing of equipment.
6. Leasing keeps a fleet up-to-date.
Utilizing leases ensures fleets run late-model equipment with the newest safety and driver-comfort features, which can make it easier to attract and retain quality drivers.
7. Leasing provides access to new technology and the expertise to support it.
Rapid changes in technology today mean vehicles become obsolete faster. With leases, trade cycles are shorter, and fleet operators can upgrade to new technology sooner than if they owned their vehicles.
Leasing a Truck from Penske
Contact Penske to learn if leasing is the right choice for your operation.