Tractor Trailer Leasing
Crossing the t's/Dotting the i's
Do you want to know about tractor trailer leasing? If your semi-trailers are working at maximum capacity and your customers are calling wanting more. You are in a good position. Remain level headed. Do not run right out and order more equipment. You must evaluate your options.
Most businesses contemplate at one time or another if they should buy more equipment or lease more equipment. Both
have their advantages and disadvantages. Both can have long term consequences if approached without knowing all of your options.
Having said that, the best place to begin is by lease type.
Tractor trailer leases come in four basic varieties
- long term lease
- short term lease
- lease purchase
I know it may be tempting to go ahead and sign an agreement because you have settled on one of the four types of
leases. However, don't get ahead of yourself. The lease type is but one part of the lease in itself. You still need to evaluate
how you will handle insurance, deposit, billing, identification, de-identification, damage, mileage,
tread wear, brake shoes....
Leases are not difficult to understand but to do so you must read the fine print. I don't want to make an analogy
using casino's and leasing companies, but you can be rest assured they are both set up with house advantages.
However, if you lease a trailer with a thought out business plan. Implement and execute that plan well. It can be
a WIN-WIN for both you and the leasing company. If you do not have a well thought out plan...the leasing
company will win big and you will lose. You will lose money. You will lose time. I have seen more companies
close because of ill thought out, improperly executed asset planning.
How do you make it a WIN-WIN for you and the leasing company?
Short term leases with loss of business clauses written in to them are generally speaking a good starting point.
However, I would not consider buying or leasing more equipment until you have successfully implemented these key
- An entrance plan
- An exit strategy
- A strict maintenance program
- Properly trained and motivated drivers
- key personnel including management who fully understand and can execute the plan
Without these key issues, you cannot achieve a WIN-WIN situation. In the long run your costs will be driven up to a point where you can no longer provide the service at a price to meet your customers' needs
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