Mar 1, 2008 12:00 PM

From a tax standpoint, full-service leasing allows each lease payment to be 100% tax deductible, he goes on, “and the lease works as off-balance sheet financing to improve key financial ratios. An operating lease can provide substantial tax advantages because the lease is 100% tax deductible over the life of the lease.”

Business challenges

Fleets owning and maintaining trucks must also deal with a growing shortage of qualified service technicians. It has been predicted that 38,000 more technicians will be needed each year through 2010.

“It's no longer a wrench-turning business,” notes Don Porthan, PacLease's manager of maintenance. “It now requires trained professionals proficient in using computers and electronic diagnostic tools.”

For leasing companies, the cost of hiring and training technicians is spread over a larger number of trucks, he says. “Efficiency is in the numbers.”

Fleets also must contend with the challenge of government-mandated environmental regulations. With every passing year, these regulations continue to grow in size, scope, and complication.

“Truck fleet managers are faced with numerous compliance activities that can easily command several hours a day,” says Southern. “This is time that could be better used elsewhere. The outsourcing of maintenance, fuel tax reporting, and other activities frees managers' time for their primary duties and shifts these responsibilities to a third party.”

Owning trucks is a bit like timing the stock market, he says. Hit it right when it comes time to sell used equipment, and a fleet will reap high residual values. If a fleet's timing is wrong, the value of its equipment may be too low to make a move to new trucks.

“Today, we're seeing that fleets are more concerned about preserving the value of their investments,” says Southern. “Leasing is an ideal way to remove the uncertainty of the used truck market from the equation. Plus, a leased truck has a greater chance of holding value because of its maintenance record.”

Given these changing times, it is important for fleets to evaluate all aspects of their business, including transportation. A lease versus ownership analysis can help determine the best fleet strategy for a fleet's specific needs. Most leasing companies have a leasing ROI calculator to help fleets make an informed decision.