Should You Lease or Buy Work Trucks?

Lease or buy? It is one of the most fundamental questions a fleet manager must answer. And, because nothing in business is carved in stone, it is a question that will have to be answered many times over the course of a career.

Many fleet managers have a preference when it comes to acquiring new vehicles. But, ever-changing financial options and business demands can often mean new opportunities — and new doubts. Because no matter what path you choose to acquire new vehicles, there is always a nagging doubt in the back of your mind, wondering if you made the right choice — or could have cut a better deal.

“How you pay for your vehicles and equipment is critical to the purchase decision,” said Lee Gross, commercial brand director at Ford Credit.

He said that leasing and buying both have distinct advantages depending upon your company’s needs and objectives. And, although the many financing choices that confront a fleet manager in acquisition mode can be daunting, he said they actually work in your favor, since the more options you have up front, the better decision you can make for your company.

Carl Webb, vice president and general manager of International’s Medium Duty product line, said that the decision to lease or buy new trucks is as diverse as the universe of fleets and the jobs they do.

“Really, you have to get to know their business before you can give them the right advice,” he said. “Take a small customer — a landscaper with four or five trucks. He’s got a decent business built up and files his own tax returns and wants that vehicle value depreciation working in his favor. Additionally, he can handle the maintenance aspect of ownership. That guy is probably going to buy his trucks for those reasons and because he wants that asset in hand to trade in when it’s time to refresh his fleet.”

In contrast, Webb said many larger fleets — notably beverage companies — have moved away from purchasing to leasing trucks.

“In some cases, it’s because they don’t want to make the investments in infrastructure and personnel required to maintain those vehicles,” he explained. “But, they still want the peace of mind of a comprehensive maintenance program. For them, a lease package that includes full vehicle maintenance allows them to concentrate on their core business — delivering soft drinks or beer — while offloading an expensive maintenance package to a dealership that excels at keeping those trucks rolling.”

Read the whole article at: http://www.worktruckonline.com/channel/leasing/article/story/2016/11/the-how-s-and-why-s-of-lease-vs-buy.aspx

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