Renting, Leasing, or Buying – What’s Right for You?
September 18, 2017
You’ve decided it’s time for a new trailer, but you’re not quite sure whether to rent, lease, or purchase. If this sounds familiar, then this is the guide for you! We’ve put together a quick overview of the different options available from Transwest Trailers to help make your decision easier.
When to Rent:
- You need a piece of equipment for short-term use, such as harvest season.
- You don’t want to make a large investment or you don’t have the capital expenditure at this time.
- You want ultimate flexibility and can handle higher monthly payments.
- You don’t want the maintenance of an older piece of equipment.
- You want the newest equipment with the most advanced technology available.
- Certain rental contracts may be eligible for a Rental Purchase Option (RPO). At the end of the rental, a percentage of the rent maybe applied towards the purchase of the trailer.
When to Lease:
- You need to keep your cash outlay low during the initial period.
- You want to keep your capital freed up.
- You’re looking for flexible terms – you can turn it in at the end of the contract or purchase and keep the trailer.
- You want the equipment to have the full manufacturer’s warranty coverage – since leasing terms are generally only a couple of years, you may be covered under a manufacturer’s warranty during the life of the lease should something unexpected occur.
Keep in mind that at the end of some leases, there can be a percentage still owed.
When to Purchase:
- You will use the piece of equipment for many years, or for a long-term project, and are prepared to make an investment that could be large upfront.
- You have older equipment you frequently use that is due for replacement.
- Financing rates are low – you receive the benefits of lower payments while also owning the equipment when your loan is paid off.
- You’re prepared to handle maintenance costs out of pocket as well as any unexpected repairs.
- You want to ensure the equipment is always available and ready for you to use.
Two good questions to ask before making your decision:
What’s the length of the project or frequency of use?
This can really be the deciding factor for many. Short-term jobs or one-off projects can make renting or leasing a great choice, but if it’s a trailer you plan to use frequently and for a longer period of time, leasing or purchasing may make more sense.
What’s your current financial situation?
If you don’t have the capital to buy right now, then renting or leasing may be the better option, but keep in mind that over a long-period, it can end up costing you more. The shorter the term, the more per month is a good rule of thumb.
Smaller dealerships may not have the flexibility to offer customers such a wide-range of financing options. Transwest Trailers is pleased to be able to be a true, “one-stop-shop” that can offer many different options to get our customers the trailer they need, when they need it. You can view our full inventory here or call us at 888-432-8875. We’d be happy to answer any questions you may have.
*Remember regardless of the option you choose it may have tax consequences that can affect your decision. Always speak to a Professional Tax Accountant prior to making your final decision.