If you’re in the logistics business or have order fulfillment as part of your business, there will be decisions you have to make on purchasing trailers for your truck. For some businesses, renting a trailer is a better option, especially if their cash flow isn’t in great standing to warrant buying a trailer. But if your business has done due diligence and determined that they’re in the market for buying a trailer, there are several advantages of doing so.
Renting: pros and cons of trailer renting
Before you decide to buy a trailer, you need to consider how often it will be used, whether or not the financial benefits will be greater than the ongoing costs, and the trailer servicing that will be involved. Renting may be a good choice if you have the following needs:
1. You only want to pay for the trailer when you use it
If the amount of time you would use the trailer throughout the year is low, renting may be better. Trailer companies do have specified rental terms on their equipment, and can work with you if you need a little flexibility in the dates that you’ll be using it.
2. You’d prefer to not deal with the maintenance costs of owning a trailer
Maintenance is one of the most important aspects of trailer owning and usually the most costly. Renting one allows you to avoid these costs and know that you’ll be using a unit that’s new and in great shape.
3. Parking space is an issue
If your business property has limited space for parking, or if keeping a trailer there would inhibit other activities, renting will eliminate that concern. Once you’ve fulfilled your purpose for renting the trailer, it will usually just be dropped back off at the rental location and you won’t have to worry about storage space.
More advantages of owning
Frequent truck trailer use may make owning a more preferred option and allow you to use the trailer how you prefer. And a large asset that’s now in your company’s name can add value overall to your business and add a few more benefits.
1. It’s always available
You don’t have to compete with other customers trying to schedule in trailer rental times when buying from trailer companies. Your trailer will always be there when you need it and you can take it anywhere without incurring any fees.
2. You now have an asset you can leverage financially
Once you fully own a truck trailer, you can get a return on your investment or obtain other financing from the equity you have in it. For example, you could get your ROI by renting it out to other contractors or business partners on your terms. Or, if you need to take out a future business loan, your new trailer is an asset you can borrow against.
3. There are usually tax write-offs that come with purchasing a trailer
Usually there are tax credits you can claim if you’ve purchased a notable piece of equipment and now have a lot of capital tied in it. You’ll want to meet with your accountant before you make any final claims, but if other financial incentives weren’t enough to make you consider buying a trailer instead of leasing, having lower tax costs just might.
Best uses for trailers you purchase
Once you’ve purchased your trailer, you will want to maximize its lifespan and make sure it won’t depreciate too quickly. What you use your trailer for depends on whether your truck can match its weight capacity and whether you’ve bought a flatbed, a regular cargo hauler, a tanker or another type of heavy-duty trailer. But common uses include hauling bulk shipments, hauling out waste, vehicle towing, construction equipment transportation and many others. You’ll want to make sure your uses fall within any state and federal environmental codes.
If you’re ready to start purchasing a heavy-duty truck trailer for your business, you’ll have to look at different financing options and figure out what you can afford, whether to buy new or used, and your anticipated equipment lifecycle. There isn’t really a blue book guide to doing this, so you will want to research other equipment appraisal and market sources to assess the price.
