Businesses that rely on trucks for their daily operations may either purchase or rent the trucks they use. While purchasing trucks makes sense in many situations, renting might be the wiser choice in a lot of scenarios. If you run a business that needs one or more trucks, here’s a list of six reasons why you might want to rent those trucks.
- Starting a Business with Limited Capital
If you’re just starting a business and have limited capital, renting will let you put what capital you do have towards things that will grow your business.
Should you purchase a truck, your business will have a significant amount of its financial resources tied up in the asset. If you rent a trust, you’ll need some money as well, but not nearly as much. The financial resources you don’t need for the truck can then be invested in starting advertising campaigns, hiring more staff, securing a better location, or any other item that’ll help the business in its early days.
- Managing a Limited Cash Flow
If your business’ cash flow is tight, you should rent a truck because it reduces the financial risk your business assumes.
When your business owns a truck, it must take care of any repair costs. In addition to routine maintenance, such as oil changes, tire rotations, and brake replacements, you also have to be prepared to replace components that cost thousands of dollars. If the engine goes or transmission fails, be prepared to spend tens of thousands of dollars to rebuild it.
Because your business isn’t responsible for maintaining rented trucks, you don’t need to worry about any of these possible costs. If a truck breaks down, the rental company must get it repaired or replaced — and there will be another truck your business can use.
Any business should consider renting, but renting is especially helpful for businesses that have limited cash flows. Without a large positive cash flow, you might have difficulty coping with a multi-thousand dollar expense. Sometimes, large expenses can devastate a business.
- Avoiding Loan Interest
As an added financial benefit, your business doesn’t have to pay interest on any truck that’s rented. You don’t sign a loan when renting a truck, so interest isn’t generated. What would otherwise be charged by a bank as interest on a commercial truck loan can be invested in your business or simply paid to you directly.
- Coping with a Breakdown
If your business does own a truck, you might still need to rent one. Your business’ truck will eventually break down, and operations won’t cease when it does. You’ll still need a way of moving goods.
You can use a rental truck as a temporary replacement to keep your business moving without waiting for the truck it owns to be repaired. You could, of course, wait — but doing so may lead to delayed shipments, refunds and overtime pay. Renting a truck is often less expensive than incurring these extra expenses, and renting won’t upset your business’ customers.
- Using a Truck Infrequently
If your business only needs a commercial truck occasionally, you should rent one on an as-needed basis because it will likely cost less than owning one. You won’t need to worry about monthly payments, maintenance fees, depreciation, or insurance premiums. Your business will just have to take care of a small fee whenever it needs a truck.
- Deciding on a Truck
Sometimes, business owners know their business eventually needs to purchase a truck. They don’t know what particular model to get, though.
If you’re not positive what features your business needs in a commercial truck, don’t buy one until you’re confident in your selection. Instead, rent several different models and ask employees which they like best. If you rent before buying, you will be able to make a wise purchasing decision when you’re ready.
Businesses rent trucks for a lot of different reasons, including the ones listed above. If your business needs to rent a commercial truck, contact us at Elite Truck Rental.