Should You Own or Lease Your Trailer?
One question truckers often ask themselves – should I buy or lease my trailer?
While there are obviously many advantages to owning your own trailer, there are always a handful of downsides. In this article, we will cover what some of the pros say about the ups and downs of trailer ownership, what you can expect financially, and at what point you or your company should consider buying.
The main benefits of buying your own trailer are accountability, safety and compliance. You take care of the trailer, and you know what you have – that’s not true when you are pulling another company’s equipment.
Research shows that 93% of independent owner-operators own their trailers. Why is it so popular to own your own trailer? Money! An owner-operator owning their own trailer can typically to make about $0.03-$0.12 cents per mile more, with the average being about $0.06. Over time, those pennies add up, and can equate to about an extra $500 monthly, on average.
While buying a trailer almost immediately increases revenue, there are reasons why many truckers decide to continue to rent their trailers. While it’s easy to see the additional income, what people need to consider is the cost of ownership – how much will this trailer cost to maintain and keep in serviceable condition.
Trailers have a high initial cost and are not cheap to maintain either. Owners need to consider annual maintenance, repair costs, inspection fees, wear and tear, warranty coverage, future upgrades, and many more considerations that increase the total cost of owning the item. For new business owners who are seeking to get their business off the ground, renting would be a great short-term plan just to get started.
As a business grows, renting or leasing company trailers often leads to buying as an investment towards the company’s growth. As a small business builds larger client revenue, it should begin to consider buying. Where a rented trailer is a one-time expense, an owned trailer is an asset, one that can be used to build the overall value of the company.
As with many business decisions, there are advantages and disadvantages for renting, leasing or purchasing a trailer. When purchasing a trailer, you need to thoroughly weigh your options in regard to cost, revenue and need.
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