Whether you own a large or a small business, there is one question that is always similar across the divide. Every business owner and manager has to answer this critical question: “Should I rent or buying a truck?”
Factors To Consider
In terms of buying a truck, many options are available. You could purchase a new one or you may opt for a secondhand truck on sites like TR Groups Truck Sales. Buying is less flexible in the sense that what you get is final. Compared to renting, if you want to get a newer model, you either trade in or purchase a new truck.
Moving goods and supplies from one location to another is essential in a business, but should you buy a truck for that purpose? Remember that there are a couple of things that need to be taken into consideration while weighing your options. These are the following:
- Seasonality of your business
- Control over the asset (truck)
- Liability coverage
- Business focus
- Truck configurations
Buying A Truck
Whether or not there is a need for you to purchase a truck is a vital decision for you to make. If you are starting a business and need to move things around as you set up, you probably shouldn’t buy a truck. But, if yours is a business whose core operation is built around the need to move stuff, then you should consider making a purchase.
The bottom line is that if you don’t need it for the long term, don’t make that purchase.
Several costs come with buying a truck, the primary ones being regular maintenance and repairs. Also, if you have an in-house team doing such tasks, that means extra costs. Recruiting and keeping drivers also entail expenses. Licensing and fines are also issues that owners like you have to tackle.
However, buying a truck also comes with a string of advantages. For one, you have full ownership and control over it, meaning you can make any structural changes as you please to suit your needs. Owning your truck will also free you from the hassle of dealing with renting agencies. You do not have to go through a long process just to be able to get your goods on the road.
Renting a truck is much easier compared to buying a new vehicle. You only need to find a reputable renting agency, tell them the type of truck you need, and they’ll be the one to find the right one for you. Renting is more convenient in the short run. It is very economical to use a rental service, especially if logistics is not a significant part of your business operations.
If your business ships out one or two packages in a week or month, renting might be the best way to go. This is for the reason that in case you decide to make a purchase and you do not have enough capacity to utilize the vehicle, your business will start incurring overhead costs, such as:
- Repair and maintenance costs
- Staff costs (e.g., drivers and mechanics)
- Storage cost (when not using the vehicle)
- Cost of spare parts
Renting trucks is a great solution that helps free up capital that is used in purchasing a truck. You may, then, channel that capital to other parts of your business. Moreover, renting offers flexibility in the fluctuation of seasons in the sense that if your company only operates during specific months, you can return the truck to the agency during the off seasons. Thus, you only pay for it when you need it.
You are able to focus on your core business when you rent a truck. You do not have to spend money on purchasing and recruiting extra staff to maintain your fleet. Renting also helps avoid depreciation. Vehicles depreciate very fast; although there is a capital allowance for depreciation, renting is also a deductible expense that helps reduce taxes. In the long run, depreciation of trucks will hurt your balance sheet.
There are pros and cons to either renting or buying a truck. However, the important thing you must do is to select an option that favors your business the most. If logistics is a critical part of the development of your business or you have long-term shipping needs, purchasing a truck could be the most viable option. On the one hand, if your business runs seasonally or has short-term shipping needs, then renting is the best option. Most importantly, before you make any decision, you need to understand how every decision could impact your business.