Why a Lease Trailer Option Is Better than Buying One

As trailers are a standard in many different businesses, including the construction and agricultural industries, many professionals will soon learn that owning a trailer can pay huge returns sooner rather than later. To stay competitive, grow their business, and provide better customer service, many business owners invest substantially in a trailer or perhaps many trailers. A lease trailer is a good option than buying it.

However, some business professionals will choose to go a different route and will choose to rent a trailer, a chain of trailers, or other similar vehicles instead, leasing them for a set amount of time and then returning the vehicles when they are no longer needed, assuming no long-term maintenance costs were incurred. Weighing the advantages and disadvantages of both choices, we can help you decide if it is in your best interest to buy or lease a trailer or chain of trailers.

Assessing the Final Cost of Ownership

Consider a situation where a business owner needs to enter a highly restricted trailer to fulfill an order for one of his most devoted clients. Let's now consider that he would have to pay $2,800 to buy the specialized trailer in this instance but would have to pay $650 to rent the trailer for a week.

As a result, at least initially, it could appear that choosing option B would be the wisest course of action because doing so would be substantially less expensive for the company owner. But if a successful purchase results in more orders that also call for the use of the specialized trailer, the business owner would have to fork over at least $650 to fulfill such orders indefinitely.

Thus, the choice between buying and leasing trailers is less cut and dry than one might think. The business owner must consider their own financial needs and options as well as the needs and demands of their clients to choose the best course of action.

The Hidden Costs of Ownership

Most individuals think of ownership as simply purchasing something and moving on. Owning a trailer, however, is a little different from, say, buying a stock because the trailer owner must maintain it in prime shape to fill orders over the long haul. In other words, if you choose to buy a trailer rather than rent one, you will have to shell out thousands of dollars annually to maintain it and fix any damage it could sustain while it is in use.

There are many more expenses associated with owning a trailer than the purchase price, such as wear and tear, repairs, inspection fees, warranty coverage, and even potential future upgrades.

Additional Advantages of Leasing Trailers

If you lease your trailer, you will be allowed to deduct the payments as a pre-tax expense, assuming you can find an operational lease. As a result, you will save a lot of money come tax time. Another advantage of leasing is that you only have to deal with fixed payments over a set time. It is in stark contrast to a loan from a financial institution like a bank, where you might be subject to constantly varying interest rates, which could result in higher future payments.

One of the main benefits of fixed payments is the ability to establish and manage a monthly budget you know you can stick to for the foreseeable future while not having to worry about interest rates abruptly rising.

Ending Notes

A lease trailer has the additional benefit that is getting finance only partially depends on having good credit. In other words, a leasing business will consider several variables outside a credit history check, such as the asset type and industry experience, while evaluating a submission file, giving borrowers more chances to get the funding they need.