BLOG: Benefits Of Renting A Semi-Trailer

754 Words2 Pages
bulb-icon

Recommended: Contrast the advantages of buying and renting

TRANSPORT SERVICES BLOG: Benefits of Renting a Semi-Trailer

Renting a Semitrailer Just may be the Answer

Should you rent or buy a semitrailer? It’s a question that keeps many in the trucking industry up at night.

While ownership offers some tax advantages and allows you to build up equity adding the semitrailer as an asset, renting allows you to be more flexible and is generally less expensive.

When your cash flow is tight, if a job only offers slim profit margins, or if your business is seasonal, renting a trailer becomes a logical business decision. Renting can help you meet immediate business needs without having a significant impact on your cash flow. Since you are only paying for the use of the semitrailer, it’s less expensive than …show more content…

Companies leasing semitrailers will often include preventive maintenance as a part of a lease or will cover the expense outright. That means you will not have to invest in maintenance facilities or maintenance personnel on your payroll. Therefore there’s no need to hire personnel for maintenance, and there’s no need for maintenance buildings, equipment or tools.

If you rent from a full-service company like Transport Services, you’ll have access to roadside assistance 24/7 should anything happen while on the road. Knowing that you are covered in the event of a breakdown gives you peace of mind. This is especially important when cash is tight and something you could not get if you purchased a semitrailer.

Moreover, if you have significant seasonal increases in your business, renting a semitrailer is also a logical answer. Renting is ideal if your business or transportation needs are growing very quickly and you need an easy and efficient way to keep up with your customers. If your business slows down as quickly as it picked up, you won’t be stuck with a trailer that sits idle while you still make …show more content…

Unfortuantely, leasing is less of an expense than purchasing, meaning you will not have as much of a tax advantage as ownership. On the other hand, a semitrailer that you purchase outright becomes an asset on your books immediately which can depreciate. Likewise, any loan on a new semitrailer also becomes a liability as a business expense. In regard to finances, the purchase of a semitrailer allows you to deduct any interest on the loan as a business expense. Further, you can also depreciate the asset, claiming a deduction. Even though ownership does have tax advantages, you can classify a rented trailer as an expense on your books rather than an asset. Further, choosing to rent offers you the option of quick equipment upgrades, should your business needs or clients change. The real downside to renting is that you won’t build up equity like you would with a purchase. So how do you know if renting is right for you?

Ultimately, leasing may require the payment of sales or other use taxes, depending on your business situation. Always check with your accountant or tax attorney before you make the decision to purchase or lease a

Show More
Related

  • Semi Truck Outline

    690 Words  | 2 Pages

    Overall, safety, the size of the semi truck's engine, and time are all really important factors in the semi trucking industry. They all tie together and construct the reason of how semi trucks are better transportation methods than other means of product-shipping methods. When a person actually stops and thinks about this, they realize that there are more things that a semi truck does other than transport products to stores. So, next time you see a semi truck, think about

    Read More

  • Trucking Industry Essay

    1587 Words  | 4 Pages

    I believe that it is a good idea for some people to get out of their element and see the world. Especially those who have the tendencies to just live their life in an ungodly way and the ones who do not set goals for themselves. Trucking industry can offer an array of communication for those who are afraid to speak to others as well as see the country side and have good stories to bring home to the family. By having your own truck the more attention will be brought to Action. Furthermore, production can increase and there is more of a possibility to hire more people. With the expansion of warehousing and the storage Industry before they break ground would need a command station for the general engineers and contractors. Over 20,000 Manufacturing Jobs, Warehousing jobs, and trucking jobs were added to the economy in 2014.( Page,

    Read More

  • Dump Truck Mission Statement

    1501 Words  | 4 Pages

    And other relevant industry and residential sites when it comes to demand for dump truck

    Read More

  • Veterinarian Senior Project

    790 Words  | 2 Pages

    I decided to buy because I could make a profit when I want to sell it and I can make renovations to the area. After thinking it through, I concluded that my total budget for the house/condo was about $250,000 but I wanted to stay under that price so that I was not house poor (which is when you put too much money into a house to the point where you can barely pay for it or live). My apartment is in Teton Village, Wyoming since I am being a larger animal vet and they have a lot of livestock and ranches out there. This condo is located at 7680 Granite loop Road (Unit 651). This space has two bedrooms, two and a half baths, and is 1,720 square feet. My condo also has a beautiful view of the mountains, good prices ($110,000), and has a beautiful living area. The complex has an asphalt driveway, a pool, and an underground parking garage.I decided not to have a roommate because I can pay for the property myself and I wanted the space to

    Read More

  • Difference Between Buying Vs. Buying A Car

    1045 Words  | 3 Pages

    When it comes to purchasing a vehicle, the choices are not always easy. This is because most people do not have the cash to buy a car without making payments on it and knowing it, makes people wonder if their monthly payments are going to worth it by the time they have it paid off. Especially if you consider the fact that by the time it is paid off, it may be a few years old and by then, you have to worry about potential issues that come up with an older vehicle. Once you realize that, you may decide to purchase a vehicle that is older and make fewer payments on it or consider your option to lease. However, most people say that leasing is not worth it and others say that buying is not a good choice. Which is best for

    Read More

  • Riverbend Telephone Company

    556 Words  | 2 Pages

    The NAL still favors buying over leasing by $1216. The only other consideration would be that lease may raise the earnings on asset ratio above 12%. But since the PV of the lease payments is greater than 90% of the FMV (assuming the purchase prices is FMV), then it would be considered a capital lease and the asset would go on the Balance Sheet. Therefore there are no earning over asset ratio advantages to leasing.

    Read More

  • Renting Versus Buying

    807 Words  | 2 Pages

    This article describes the disadvantages and advantages of buying or renting your home. It describes advantages of buying such as taxes and appreciation of the home. However, coming up with a down payment may be hard for many people. Renters may have less cost and more flexibility on when and where they can move to.

    Read More

  • Issues Bonds Generally Go Through A Series Of Steps

    732 Words  | 2 Pages

    There are two major types of leases: operating and capital. An operating lease involves leasing service equipment for shorter periods than the fiscal life of the equipment. Operating leases are used for short-term leasing and for technological assets. Capital assets involve leasing an asset or equipment for all of its economic life. Capital lease are used for long-term leasing and for equipment that cannot become technologically obsolete (Zelman, 2003).

    Read More

  • Rent To Own Real Estate Essay

    949 Words  | 2 Pages

    Sometimes you would have to pay the irrigation payments with it as well. As always, you would also pay for water, sewer, garbage, and other utilities, but this is not in the "Rent to Own" contract with the original owner. "Rent to Own" tends to be on the expensive side. But if you think about it, you're paying the same amount if you were buying it out right. The only difference between it and actually buying, is that you can decide to move and not have to worry about putting

    Read More

  • Mitigating Risk in Transportation Costs

    1279 Words  | 3 Pages

    Finding ways to move goods from one point to another at a reasonable cost and within an acceptable time frame is a growing challenge for global businesses today. The costs and risks associated with transportation are increasing with the advent of globalization and low-cost-country sourcing. Even for companies with local operations only, they have to supply their products to various parts of a country which increases the costs and risks. Since the cost of gasoline has been on an upward trend, high level of efficiency in transportation is required to lower the costs involved and the risks associated with the costs. Costs concepts in transportation include economic, social and accounting costs. The risks and costs involved increases if the various modes of transport are used. There has been concern over many businesses failure to strategically think when they employ multimodal transportation services. Many businesses prefer the least expensive multimodal model instead of choosing the most effective; this trade-off is very expensive with hidden costs and risks increasing significantly (Molenaar, Anderson, Schexnayder, National Research Council (U.S.)., National Cooperative Highway Research Program., American Association of State Highway and Transportation Officials., & United States, 2010).

    Read More

  • Tenants And Landlord Relationships

    954 Words  | 2 Pages

    “To understand the tenant landlord relationship, one must first understand the roles of each party and understand how the relationship is defined. The landlord, or lessor, is the owner of real property who willingly gives up his right to possess the property in exchange for a monetary gain. The tenant, or lessee, agrees to pay the landlord for use of the property” (Bleatherman, 2013). A lease is a contract between a landlord and tenant, which contains the terms and conditions of rental. A residential lease, ordinarily, is a periodic tenancy that continues for successive periods until the lease is terminated and payment is required month to month.

    Read More

  • Pros And Cons Of Negative Gearing

    2075 Words  | 5 Pages

    One can have the deposits over the tax deductions and also makes the cost of property along with the other rental costs and interests that affects the taxes within the negative gearing.

    Read More

  • Benefits Of Buying A Shuttle Bus

    1071 Words  | 3 Pages

    Buying a used bus will offer you a bounty of benefits over buying a new shuttle bus for sale, among which the major benefit is the price point. However, while buying a second-hand passenger shuttle bus for sale, you should first do your homework. This is because while buying pre-owned buses for sale online, it may be affordable, but if you fail to choose the right ones, it will be more expensive than the new ones when you come across repairs and maintenance. If you buy a lower quality used diesel shuttle bus for sale, and if the bus stops working during a run, you will end up with discontented customers who may not come to your business back. On the other hand, if you decide the right used shuttle

    Read More

  • Short Term And Long Term Capital

    839 Words  | 2 Pages

    If you need money to purchase assets for your business, leasing offers an alternative to traditional debt financing. Rather than borrow money to purchase equipment, you rent the assets instead. Leasing typically takes one of two forms: Operating leases usually provide you with both the asset you would be borrowing money to purchase and a service contract over a period of time, which is usually significantly less than the actual useful life of the asset. That means lower monthly payments. If negotiated properly, the operating lease will contain a clause that gives you the right to cancel the lease with little or no penalty. The cancellation clause provides you with flexibility in the event that sales decline or the equipment leased becomes obsolete. Capital leases differ from operating leases in that they usually don't include any maintenance services, and they involve your use of the equipment over the asset's full useful life.

    Read More

  • Essay On Advantages And Disadvantages Of Owning A Car

    980 Words  | 2 Pages

    With convenience comes cost. There are many costs associated with owning a car. Firstly learning to drive can be prohibitive, with lessons often out of a lot of peoples budgets. Once you have passed your test buying a car can also prove expensive. It is often the case we have to buy cheap second hand cars as new cars are very expensive. Sometimes this is fine and you can have a reliable car, but other times you pick one up that’s not been well maintained and can cost you a fortune in repairs and keeping it on the road.

    Read More

More about BLOG: Benefits Of Renting A Semi-Trailer

Open Document