Full-service Leasing Often Costs Less Than Ownership

This is part two of a two-part series. The first part ran in our March 2009 issue on page 34.


In a typical full-service truck lease, the cost of the vehicle, apportioned tax and license, finance charge (set interest rate for the lease term), and calculated cost-per-mile maintenance expenses, minus the calculated residual value determine your monthly payment.

Often, companies find that when we do a lease-own analysis in a net present-value, net after-tax format, full-service leasing from companies such as PacLease can help them reduce their operating costs after they consider the tax impact that a full-service and off-balance sheet operating lease provides. Through our analysis, we can help companies calculate how much owning and maintaining a truck fleet truly costs them down to whatever unit of measurement they need.

For food and beverage distributors, for example, we can calculate the cost down to the per-case level. Then we can show them how the per-case cost of full-service truck leasing with companies such as PacLease compares to that of truck ownership.

Company owners, finance officers and fleet managers are usually surprised to find that the per-unit cost with full-service leasing is often less than the per-unit cost of owning their trucks and maintaining them.

When we sit down with our customers, we ask questions to try to understand what drives their costs and then determine ways we can help them develop efficiencies in their operation through the right truck specification choices. For example, we sat down with a fairly large steel distribution company based out of Los Angeles and found that payload was the company’s most important measurement of success. Every pound we could take off the company’s leased truck was another pound of product they could haul to their customers.

In the past, the company leased trucks from another leasing company that took more of a “one-size-fits-all” approach to their truck specification needs.

As a result of taking measurements of one of the company’s trucks, we provided the company a Peterbilt 386 with an optimized wheelbase and durable, but lighter weight components. The optimized wheelbase and lighter weight components allowed the company to haul more steel and as a result the company made more money with that truck.

LOSING CONTROL

There’s another misconception about full-service leasing among companies that own trucks. They often believe that by turning over responsibility of truck maintenance to a leasing company, they somehow will lose control.

Nothing could be further from the truth. Companies that have switched from truck ownership to leasing trucks from us have found that when PacLease maintains their trucks, their operations department can concentrate on their core business, and in many cases, improve on-time delivery rates.

PacLease demonstrates its value to fleets through a unique blend of truck equipment and truck financing expertise.

When you go to banks for truck loans, the banks are primarily concerned with what’s the likelihood of repayment. Banks consider their appetite for those kinds of assets and also measure the risk of default.

That’s how they determine your finance rate. At PacLease, we also consider the likelihood of repayment, but we also look at maximizing the resale value of the equipment. We help customers steer clear of making truck specification mistakes that will not only lower that resale value, but also be a detriment to their operation.

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