Full-service truck leasing can be a way to alleviate some fleet operation tasks and challenges
Mar 1, 2008 12:00 PM
Full-Service truck leasing has become a popular option for companies that run their private fleet but don't want the headaches associated with ownership. It is expected to gain even more momentum, as many companies are looking at leasing for the first time, due to ever changing technology, stricter government regulations, a chronic shortage of qualified truck technicians, and the need for financial flexibility.
“In the past, customers were typically small- to medium-sized private fleets,” says Bob Southern, president of PACCAR Leasing (PacLease), which leases Kenworth and Peterbilt trucks throughout North America. “But today, all types of fleets are discovering the benefits of full-service leasing.
“Companies want to off-load responsibility for vehicle maintenance and emergency roadside service. Additionally, they value the flexibility of substitute vehicles to ensure a high level of uptime — critical for those in a JIT (just in time) operation.”
Southern predicts the trend to full-service leasing agreements will accelerate even faster in the next few years as the complexity of trucks and equipment continues to evolve. It's going to make maintenance and technician training an even higher priority, he says.
“If a fleet is running fewer than 50 trucks, it's going to be increasingly difficult to justify the expense and liability of operating a shop. “Full-service leasing allows a fleet to delegate its maintenance to a ‘partner’ whose job is to make sure equipment is well maintained and running properly, insulating the fleet from unpredictable or erratic maintenance costs.”
Capital management
With a full-service lease, a fleet pays for the use of the truck, as opposed to paying for the truck itself, adds PacLease's director of sales Olen Hunter. “That normally means a big savings — up to 25% less in some cases — in the monthly lease payment, as opposed to financing to own.
“That lower payment preserves working capital, which can be utilized for growth, expansion, or for purchasing additional inventory — all of which typically provide a higher return on investment when compared to purchasing rolling stock.”
Full-service leasing also allows for predictability and protection from the unknown, Hunter says. “Unlike truck ownership, where preventive maintenance and repair costs can fluctuate month-to-month, full-service leasing ensures a constant payment every month. It allows for accurate budgeting and preempts cash flow concerns when a truck faces major repairs.”
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