We don’t need to tell you that selecting the right vehicle is crucial to the success of your trucking business. You know that.
You also know that there are only two decisions that need to be made. The first is whether you want to buy or lease the vehicle. The second is what type of vehicle is best suited to how your business operates.
To buy or to lease?
As a start-up, buying your vehicle will most likely involve taking out a loan for the purchase amount, less any cash payment you come up with. Incremental payments will be made along a set term so that when the last payment is made, ownership of the vehicle is transferred over to you or your company.
Different to paying down a loan on the purchase price of the vehicle, leasing is essentially financing the use (or depreciation) of your truck. The lease covers the difference between the purchase price of the vehicle and the projected value of the vehicle at the end of the lease terms. When that comes around you have a couple of options: a) purchase the truck for additional amount of money or b) trade in the vehicle for a new truck or for the remaining cash value.
Most of the time you end up paying more when you lease a vehicle. But this option provides a lot of flexibility to new business owners who don’t have the capital to make a large vehicle purchase initially.
Pro Tip: Having a well-thought out business plan is not only a great tool for strategising, but it’s also a great tool for acquiring finance critical to your business’s operation.
Knowing how much cash flow your business will generate in the initial stages will help you make the decision to buy or lease a vehicle. So, do the math and enjoy peace of mind!
Which vehicle is best suited to your business?
Now is this a huge topic which we can’t possibly cover in depth in a short blog, and it ultimately depends on your individual business needs. However, we only ask that you spend some quality time deciding what type of vehicle will best suit your needs and whether they are for longer haulage journey’s or for shorter inner-city trips. Once that is considered, then start deliberating over which manufactures offer a vehicle for the best quality and value. Make sure it’s a beauty!
By taking these tips into consideration you’re one step closer to jumping into the cabin of your vehicle and getting on the road.
Truck Assist offer a well thought out solution for small businesses who are seeking to protect their company vehicle. Get a quote for Roadside Assistance or Drive Pack Insurance online to see how we can keep you on the road.
This blog is a guide only and does not contain a definitive list of regulatory requirements which you must meet as a business owner. Businesses are required to comply with all laws, regulations and codes of practice by identifying their risks, and develop and implement control measures tailored to their circumstances, and you must seek independent advice to assess your circumstances.