Buying A Fleet Truck
There are a number of discounts exclusive to qualified fleets that offer savings from a few hundred to over a thousand dollars per unit. The typical qualifier is a total of 15 vehicles in a fleet or a one-time purchase of five or more vehicles. Once your company is assigned a fleet number by the automaker, you can use that number to purchase vehicles from any new car dealership that sells that brand.
buying a fleet truck
All fleet vehicles have been driven professionally, and most have also been cleaned and maintained professionally. However, once those vehicles hit certain mileage milestones, have been in an accident, or have been through certain kinds of bad weather events, they are typically retired and sold so that a new vehicle can be purchased instead.
There are quite a few discounts available to registered fleets, and some of these discounts can provide you with savings of a few hundred dollars and even as much as $1,000 for each vehicle purchased. A standard qualifier would be something like 15 vehicles purchased for your fleet.
When an automaker assigns a fleet number to your business, you can use it to purchase vehicles from any company which happens to sell the brand of vehicles the automaker makes. This can result in tremendous savings when applied to purchasing a number of vehicles for a fleet.
You will often find that discounts on fleets and retail incentives are not really very compatible. However, there are occasions when some retail programs can offer much larger savings than the fleet program.
LeasingWhen you go through a leasing partner or a fleet management company, you can be sure that you will always find discounts and incentives on vehicles. These partners have relationships with auto manufacturers that can result in volume discounts and negotiated services that save you both time and money.
PurchasingWhen purchasing vehicles for your fleet, there is always a chance that you can find discounts and incentives by working directly with a dealer. However, these may be few and far between and will not prove beneficial if you need to acquire vehicles quickly.
LeasingWhen leasing, leave the fleet maintenance management headaches to your fleet management partner. Costs are often lower and can be included in certain leasing tiers, sometimes at predictable fixed costs.
PurchasingIf you purchase your fleet, you are in charge of the maintenance on your vehicles, which can cost you valuable time and money. However, you will not be held to strict timelines for maintenance or repairs and may have more flexibility when choosing where to take your vehicle for service.
PurchasingIf you do not have a fleet management partner and own your vehicles, you are responsible for the analysis of all fleet data. You will also need to manage your vehicle inventory, consolidate invoices and costs, and source insurance and other services to help keep your fleet running.
Vehicle remarketing and replacement are part of a vehicle cycling strategy. This is a plan that fleets put together that defines when vehicles should be replaced, and considers factors like mileage per year, optimal timing, and potential financial impacts.
LeasingFleet leasing was designed to provide set vehicle cycles. Before signing a lease agreement, the terms will define how long you will have the vehicles, the residual value of the vehicles, and the return or purchase process. Your leasing partner or fleet management company will dispose of the vehicles for you and help you determine replacement options.
Many leasing partners and fleet management companies offer fuel management and fuel card programs as part of their typical services, so leasing your vehicles may offer the advantage of keeping all operations under one roof. However, if you own or finance your vehicles, you have the option of working directly with a fuel card provider or with a fleet management company for this service.
LeasingYour monthly payments will also be much less if you lease. This is an affordable and efficient option for fleets because you can preserve capital and then reinvest the money you save into other areas of your business.
Most fleet vehicles are heavily used, which leads to significant depreciation in less time than consumer vehicles. The U.S. Department of Energy states that the average vehicle travels between 11,467 miles (for cars) and 62,751 miles (for Class 8 trucks). This is important to keep in mind as you analyze your fleet leasing vs. owning options.
Leased vehicles enable you to visit the repair shop and gas pump less often. No joke. Since leased vehicles are typically new models, they have fewer maintenance needs (outside of preventive maintenance) and better fuel economy. As a result, your fleet can have greater vehicle uptime, lower maintenance expenses and lower fuel costs compared to your older fleet vehicles.
If you thought paying a regular car note takes a chunk of your money out of your pocket, just imagine what your monthly payments would be when buying a fleet of trucks. The prices can be astronomical! Not only that, but the interest on the trucks can be so high that it can actually cost more than the truck itself!
If you buy your fleet, you will be responsible for repairs needed on the trucks but if you rent, the fleet company will be involved with the maintaining of the vehicle. Some typical truck maintenance includes:
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Along with improving efficiency, fleet managers have the responsibility of reducing costs. There are several ways companies can cut fleet costs, such as focusing on preventative fleet maintenance and optimizing routing. But what many fleet managers neglect to consider is the money spent on vehicle procurement. Before you purchase another truck or van, carefully assess options of fleet leasing vs. buying.
Many companies lease fleet vehicles because it offers a low initial investment. However, the overall costs of fleet leasing may not be worth it in the long run. On the other hand, for fleets with a high vehicle turnover rate, leasing may be the best way to save money year after year. Check out the below considerations before you lease or buy fleet vehicles.
Safety measures for vehicles are constantly improving. Current trends in the fleet vehicle market are shifting towards greater automation and better fuel economy. Even base models now have adaptable headlights, cruise control, and other safety features that we considered advanced just a few years ago. Newer vehicles may also include lane-keeping and parking assistance, hybrid electric fuel options, and integrated smart systems. More recent, safer vehicles offer a more comfortable ride for your employees and reduce your liability and insurance costs.
When you lease a fleet vehicle, you make consistent monthly payments for its usage. You can never pay it off and enjoy the financial benefits of ownership. Leasing may cost less initially, but savvy fleet managers should also consider the long-term expense. Costs may include the possible penalties for mileage and wear, plus the likelihood of higher insurance costs because many leasing agreements require more comprehensive insurance coverage that may be unnecessary.
Unlike small business fleet leasing, purchasing a vehicle builds equity over time. You can then reinvest that positive equity, which may benefit startup companies looking to build capital. If you decide to sell a vehicle, you can apply its profit towards acquiring new assets. Otherwise, you may choose to trade in the vehicle for a newer one. Trading in your owned vehicle will reduce the costs of the newer vehicle.
Whether you buy or lease fleet vehicles, you can lower your insurance costs, liability, and more with Azuga. We provide leading telematics systems for fleet tracking and ELD compliance. Learn more about GPS fleet tracking, asset tracking, eLogs, and more, at Azuga.
Buy multiple trucks at once, whenever possible, strategically leveraging volume discounts. When you buy in volume, you typically have more negotiating power, which is especially important when making purchases of significance. Choose vehicles with features you need, including equipment that can provide greater fleet truck resale value, while avoiding those that can drain your fuel consumption.
Work with your financial team or accountant to optimize your depreciation. Strategies can range from negotiating the best price, as described above, to buying your fleet pickup trucks at the appropriate time of year.
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It's a decision fleet managers have had to make for years, going back and forth with weighing the pros and cons associated with each of them. But the decision between the two doesn't have to be one or the other, says Penske Truck Leasing Senior Vice President of Sales Jim Lager. 041b061a72