Three reasons why you should lease your heavy-duty trucks

Three reasons to lease your trucks

Ever-evolving truck technology. Increasing efficiency requirements and goals. Meeting uptime demands. Maintaining proper maintenance procedures. There are a myriad of gears turning in a fleet manager’s world. Any cog in the fleet management machine left unchecked, unintegrated and unoptimized can mean the difference between fleet success and failure. When faced with such a daunting task and tough marketplace competition, leasing companies can provide a helping hand to meet fleet goals. Fleet Equipment reached out to the biggest names in the heavy-duty truck leasing game and picked their brains about the top three reasons that leasing trucks might be the perfect fit for your fleet.

1. Controlling cradle-to-grave costs

Money makes the business world go ‘round. You want to bring in more dollars than you pay out. While truck ownership revolves around total cost of ownership (TCO), leasing focuses more on the financing and operational costs.

“We look at all aspects of the asset,” began Rick Walden, director of sales for PacLease. “This includes the cost of capital to acquire the asset, insurance, taxes and legalization. This also includes the cost to maintain the asset from cradle to grave. There are many maintenance scenarios to consider, includes in-house maintenance and outside service providers. We also include the cost of substitute vehicles when their trucks are down. Lastly, when we look at ownership alone, we look at the cost of administrative and maintenance related overheads with regards to people as well. This commonly gets overlooked when comparing the cost of a lease to ownership.”

Joe Gallick, senior vice president of sales for NationaLease, explained that financing costs revolve around depreciation, interest and residual value risk that the customer may or may not take. “As a large purchaser of vehicles, which a leasing company typically is, we’re able to leverage economies of scale that provide a benefit to the customer when it is translated to a lease rate,” he said.

In addition to acquisition costs, fleet ownership expenses include ongoing comprehensive maintenance, additional administrative and/or technical staffing and vehicle repairs and replacement costs.

“Throughout the useful life of the vehicle, technology and regulatory changes may require additional investment not only in the fleet, but also in technical training and shop technology and equipment,” said Jim Lager, senior vice president of sales for Penske Truck Leasing. “Additionally, recruiting, retaining and managing skilled staff can add significantly to the cost of ownership for companies that perform their own maintenance on-site.”

The laundry list of costs associated with trucks is seemingly endless: Fuel, tires and emergency road service are the obvious costs, but there are also subtle yet substantial costs such as warranty administration and recovery, road permits, insurance, and driver training for new truck technologies. Fleet managers don’t specifically have to worry about these day-to-day, but they still add into the total cost of ownership equation.
Lager explained that a fleet’s decision to lease or own its fleet is driven primarily by its operations, company culture and strategic goals. As far as truck options and availability, most leasing companies typically have trucks matched to application ready to go. If you’re looking for a custom spec, a leasing company will work with you to develop the spec and program that fits your application.

“Most leasing companies offer a variety of OEM offerings with specifications geared to the customer’s actual application,” explained Ryder Executive Vice President and Chief Sales Officer John Gleason. “However, leasing companies will often offer spec’d vehicles that are suitable for a wide range of applications. In this case, the customer can take advantage of immediate delivery and a lower acquisition costs due to volume discounts.”

“All vehicles are built based on the customer’s operating and performance parameters and preferences,” Penske’s Lager said. “We provide significant guidance on building the most efficient and capable vehicle to handle the client’s overall transportation and delivery requirements. Penske does not limit its selection of trucks; however, we do recommend trucks based on the customer’s application.”

2. All of tomorrow’s technologies today

Do your trucks sport advanced collision mitigation systems? How about driver behavior training and reward systems? Aerodynamic components? Automated manual transmissions (AMTs)? Are you leveraging your truck’s operational telematics data? Leasing can provide a platform for you to put the latest technologies in place.

“An over-the-road tractor could have the latest aerodynamic package, low-rolling resistance tires, automated manual transmission and an axle ratio to allow a lower engine RPM at cruise speed,” Ryder’s Gleason said. “Many of our customers are equipping tractors with systems that enhance the driver’s ability to operate the vehicle safely. Just some examples are collision warning/avoidance systems, roll stability, lane departure, and RYDERcamera systems.”

AMTs are also growing in popularity. “More and more vehicles today are being designed and sold with automated transmissions simply because the pool of experienced drivers, who traditionally shifted in the right patterns and operated the vehicle in the sweet spot of the performance curve, is shrinking,” NationaLease’s Gallick related. “New drivers are entering the work force may lack that experience, so an automatic transmission takes the shifting decisions out of their hands and provides fuel efficiency as well as reducing fatigue.”

Gallick went on to explain that application still drives the transmission spec. In a stop-and-go pedal-run type of operation where the driver is perhaps making 14 to 16 deliveries a day, for example, there is a lot of shifting. “Clearly an automatic or an automated transmission is a benefit, because there is a lot of fuel efficiency that gets lost through inefficient driver shifting patterns,” he said. “Additionally, the driver is able to have both hands on the wheel and focus on what’s ahead through the windshield or in the side view mirror, resulting in reduced stress and fatigue as well as improved safety.”

The power of leasing is in the ability to get your hands on the latest technologies quickly, while the leasing company also provides support for those new systems and processes.

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