Leasing a van, truck or tractor can be an attractive option for many companies who are looking to get away from the ownership model and focus that capital and attention on their core business. At TEC Equipment, we have a seasoned leasing team to help companies determine if leasing is the right fit for their business.
What is leasing?
Leasing is a long-term strategy for many businesses that takes the headache of fleet management away from the business and allows them to focus on their core operations. Leasing provides an umbrella of protection from the risks associated with operating a fleet, large or small. Many of our customers find that our leasing program helped them solve for a variety of obstacles, like growing a fleet, increasing maintenance costs, or navigating through ever-changing governmental regulations.
Pros of Leasing
Lower upfront costs: Buying a truck outright is an investment and buying an entire fleet of trucks requires significant capital outlay. One of the biggest advantages of leasing over buying is that it requires much lower upfront costs. With less money down upfront, you have the capital to direct to other important areas of your business.
Predictable budget: With a fixed monthly payment and maintenance included in the lease you can easily predict your fleet expense on a monthly basis. Why is this important? It eliminates the large swings that come with fleet ownership, and reduces the uncertainty and anxiety that budgeting can often cause.
Access to newer trucks: It’s much easier to upgrade your truck when you’re leasing. Leasing often allows you to drive a newer model than you might be able to afford to buy outright. Newer models can offer:
- Better fuel efficiency
- Increased driver retention
- Modern safety features
- Lower maintenance costs
This can help fleets stay at the forefront of modern technologies and remain competitive.
Lower maintenance costs: Everyone knows the feeling of dread when the check engine light comes on. How much money is this going to cost? When you choose a full-service leasing package, all the maintenance of a vehicle is covered with the exception of driver damage.
Downtime is a thing of the past: Time is money when you’re on the road and any time off the road is money lost. When you lease with TEC Equipment, downtime is a thing of the past. With access to replacement vehicles, drivers will get where they need to go without missing a beat.
Administrative and fleet management: When you lease you have the option of including licensing, permitting, and fuel tax reporting in your lease. Additionally, our team manages breakdowns, preventative maintenance scheduling, and repairs. This helps cut down on fleet management and administrative time, so you can focus on your operation and getting your goods and services delivered on time.
Cons of Leasing
However, there are a few things you may want to consider before leasing a truck.
Restrictions: Many leasing companies have restrictions on how you can use the truck. These can include:
- Limits on the number of miles you can drive
- Where you can take the truck
- Requirements for routine maintenance and inspections.
Ownership: When you lease a truck, you don’t actually own the vehicle. This means that when the truck is returned, you’ll be responsible for any damage to the vehicle that is outside of normal wear and tear.
Penalties: If you break the terms of your lease agreement, you may face penalties or fees. This can include early termination fees, or a requirement to purchase the vehicle at the Schedule A value.
Make sure that you fully understand the leasing agreement before you sign the lease.
Leasing Programs at TEC Equipment
Full-Service: Full-service truck leasing is a type of leasing agreement in which the leasing company provides all the maintenance and repair services for the leased truck. This includes:
- Routine maintenance, such as oil changes and tire rotations
- All necessary repairs, such as brake work or engine repairs excluding driver abuse
- Roadside assistance in the event of a breakdown
Contract Maintenance: Contract maintenance is where you own your own vehicle but are not responsible for regular maintenance, you pay a fee for the leasing company to cover the maintenance. This is great for fleet owners who want to keep their fleet running smoothly but don’t have time to.
- Guaranteed Maintenance: We’ll guarantee and manage the maintenance of a new vehicle for a set time period.
- PM+: We’ll schedule preventative maintenance services for any units on contract, and offer elective services for units needing repairs.
Leasing with TEC Equipment
Leasing can be a great option for fleet owners who want more flexibility, access to newer vehicles, and worry-free maintenance coverage. However, it’s important to weigh the pros and cons carefully and consider your specific needs and goals before choosing between leasing and buying a vehicle. Contact our experienced leasing team today to see if leasing is the right fit for you and your business.