For many businesses that rely on transportation equipment, buying the equipment with a loan or a major cash investment is the right solution. However, leasing transportation equipment is an alternative that you may not have seriously considered yet. Leasing comes with several financial benefits that could result in substantial savings for your business. How can leasing your transportation equipment save you money?
Choose the Right Size and Type of Equipment
A business’s needs for transportation equipment change over time. In some cases, those needs vary by contract or job. When you lease transportation equipment, you have the flexibility to choose the right type and size of equipment that the job calls for at the time. This allows your business to more efficiently meet transportation needs. More than that, your team will not waste gas and time driving a bigger rig than the project calls for.
Upgrade or Downgrade Equipment When Needed
When your business owns its transportation equipment, you are locked into that equipment for several years or longer. If your needs change, such as if business slows down for a period of time or you lose a contract, you are still tied to a costly loan. Provided you are not upside down on the loan, selling your equipment is one option to eliminate your loan payment when needed. However, this often takes time, and your business would be wasting money until the equipment sells. On the other hand, if you need to upgrade your equipment, you may be tied to what you have until you sell it. By leasing, you have greater flexibility to accommodate your needs at the moment and according to your budget.
Access the Equipment for a Desired Term Length
While some of your business’s contracts or projects are long-term and stable, others may not be. Transportation equipment loan terms are years long, which is suitable for contracts that are expected to last as long or longer as the contracts. When you need equipment for a short-term project or a project with a questionable term length, being tied to a long-term loan is detrimental to your business’s finances. A lease allows you to choose a term length that is most suitable for your needs. This flexibility to manage your transportation expenses with your business’s needs yields considerable financial savings.
Avoid Maintenance Costs for Short-Term Needs
Generally, you are not required to maintain transportation equipment if you choose a short-term rental. However, this varies by rental contract, so you should read the terms carefully. When you are able to eliminate or reduce maintenance costs from your transportation equipment expenses, you could save a tremendous amount of money over the course of a year.
Transportation equipment expenses are an essential part of your budget, but you could be overpaying in this area if you are not taking advantage of the benefits of leasing. While owning equipment may continue to make sense for some of your needs, it is important to consider how leasing transportation equipment works in your operations. Research your options so you can make an informed decision on how leasing transportation can save your business money and which leasing options best fit your needs.
