For those who use flatbed trailers for their work, there are three main ways to secure that trailer: purchasing, renting, or leasing.
The right option depends on the work at hand as well as several variables unique to each business. Of the three methods outlined above, purchasing requires the highest level of investment, while flatbed trailer rentals and leasing requires less investment up front.
In this article, the difference between renting and leasing will be explored. We will highlight the pros and cons of each choice and dive into the specific scenarios that might make one a better choice than the other.
The Basics of Flatbed Trailer Renting and Leasing
In some ways, renting and leasing are similar to one another in how they work. According to CDL.com, the biggest similarity between these two options is that you do not own your vehicle. But even when compared with purchasing a flatbed trailer outright, renting and leasing are not identical in the way they work.
Here are a few key basics that can help you distinguish between renting and leasing.
Flatbed trailer rentals are a great short-term option, as they often do not require a deposit and are more easily attainable for those with poor credit. A rental is a temporary agreement between you and a rental company.
The rental company will be responsible for the maintenance and upkeep of the trailer during use. In exchange, you will be required to pay a rental fee. Fees are often paid in monthly increments, but flexible terms are available for shorter use.
Leasing a flatbed trailer is better for long-term use. A lease does require a deposit upfront and usually involves financing or monthly payments to the leasing company. In a leasing agreement, the motor carrier is the one responsible for repairs, maintenance, and insurance on the trailer.
Leases are usually a three- to five-year agreement. In many cases, you may have the option to purchase the trailer at the end of the agreement.
With these basics of rentals and leasing in mind, it is important to consider the most notable pros and cons of both choices, as well as the circumstances that might warrant one option over the other.
The Pros and Cons of Renting
A flatbed trailer rental can meet seasonal or short-term needs. Those who need a flatbed trailer for a short period of time or only one season will find that renting is a better choice. Renting a trailer for the exact time you need it means you’re not investing in something that sits unused for 10 months out of the year.
The following list of pros and cons can help you determine if renting is the ideal choice for you.
- Unlike purchasing or leasing, renting does not require a specific credit score. This makes it a great choice for those who have been limited by a poor credit score in the past.
- Renting a trailer does not require a large investment upfront. This is ideal for those who need a trailer immediately but do not have the capital to purchase or lease one.
- When renting a flatbed trailer, the rental company is responsible for the upkeep of the trailer. This can save you from the hassle of maintaining and repairing an older trailer.
- Renting gives you access to the latest and greatest equipment without making a huge investment. This option is a great pick for those who need cutting-edge technology, but don’t want to constantly purchase new trailers.
- For long-term use, renting can be an extremely costly choice. Rental prices are much higher than leasing or purchasing. While it offers many of the benefits described above, they are not the best financial choice for most long-term trailer use.
- You don’t get any of your investment back. Your leasing agreement may include credit toward the full purchase of the trailer by the end of the contract. However, most rentals are simply money paid out to the rental company, leaving you without any chance of purchasing or selling the trailer in the end.
- Your rental terms and conditions might come with limitations. Not all trailer rentals allow you to drive unlimited miles or use the trailer however you wish.
The Pros and Cons of Leasing
Leasing offers flexible terms. Leasing agreements often allow you to determine what you can do at the end of the contract, such as purchasing the trailer at a discounted rate or trading it in for a newer model. This makes it a good option for those looking to upgrade their flatbed trailer frequently.
The following list can help you determine whether or not leasing is your best option.
- Leasing is a great way to keep capital freed up while still making an investment that will pay back down the road.
- Leasing allows you to take advantage of the full manufacturer’s warranty coverage. Leased flatbeds are usually new models, so they’re often covered by extensive warranties.
- Monthly leasing rates are lower than rental prices, which is an advantage for those looking for long-term use.
- Leasing does require a down payment. If you are strapped for capital, this can be a roadblock. You will also need to have a certain credit score to be eligible for leasing.
- You have to pay for the trailer every single month. This can be an unnecessary financial drain if you plan to use it only for a short season.
- You might still owe more money in order to purchase the trailer at the end of your contract.
- You will be responsible for insurance, repairs, and maintenance costs.
- In certain cases, a carrier might restrict you to only specific approved facilities for repairs. Upkeep can be more costly if you can’t shop around for repairs.
Ask Yourself This
As you think through the pros and cons of flatbed trailer rentals versus leases, ask yourself two questions:
Is this for short-term or long-term use? One-off projects are ideal for renting, whereas long-term, ongoing use usually makes leasing the logical choice.
What is your financial situation? If you have poor credit or lack available capital, renting may be the best option for you.
Whether you opt to rent or lease, it’s important to know that you’re doing business with the right company. Transwest offers flexible rental and leasing options. With in-house financing available and a large inventory of flatbed trailers, we can help you navigate your choices so that you make the ideal decision for your specific operation.