Renting vs. Buying: Which is Right for Your Fleet?
As a Fleet Manager, you’re likely faced with a number of challenging decisions, not least of which regards the procurement of vehicles: should you rent, purchase, or have a combination of the two options?
The answer, as I’m sure you can imagine, isn’t all that simple – there are a lot of factors at play, each of which should be weighed when considering procuring new assets.
With this helpful guide, our team has compiled a list of the things you should consider, as well as a breakdown of cost comparisons!
What are the Pros of Renting Fleet Vehicles?
- Easier to Downsize: In the event of a sudden lull in the market, you may find yourself with the sudden need to downsize your fleet, a task made more difficult if you own vs. rent.
- Cheaper to Maintain: If you own your rental fleet, you are responsible for coordinating regular maintenance & repairs; if you are responsible for a larger fleet, you may even have a team of technicians on the payroll (adding to your Total Cost of Ownership). If you’re working with the right rental partner, your maintenance can be completely outsourced for less than you would generally pay.
- Mitigating Idle Vehicle Costs: While it might seem strange, vehicles that are sitting can actually cost you more in the long-term. There are a lot of reasons for this: seals deteriorate, fluids become stagnate, and fuel can go bad. You can mitigate these risks by switching to rental options.
- No Licensing Fees or Insurance Premiums: When you own your fleet, you are responsible for vehicle insurance and licensing fees, whereas working with a renal partner you can avoid vehicle licensing and insurance fees. Oftentimes the premiums for rental insurance for fleets can run in the thousands per month!
What are the Pros of Purchasing Fleet Vehicles?
- Tax Benefits: Whether there’s an immediate benefit or a carry-forward benefit, you may be able to benefit from the depreciation of your fleet vehicles when it comes to tax season.
- Ideal for Longterm, Low Mileage Use: If you operate a fleet that is consistently in-use BUT doesn’t travel that far in the year, outright purchase might make more sense for you.
- Resale Value: The prospect of reselling your fleet is perhaps the most obvious benefit of owning your fleet vehicles, however, you also have to weigh in the depreciation in order to see if you’ve actually got your money’s worth.
The choice to rent or purchase is not an easy decision – a lot depends on the individual needs of your fleet, and require regular assessment to ensure your needs are being fully-met!
Need help assessing your fleet needs? Begin a no-obligation consultation today!