Becoming an owner-operator is more than just making a career switch. Driving a truck as your own boss means starting a business, including all of the capital investments that come with any new venture. Buying your tractor is often the costliest part of the process, but purchasing a trailer isn't necessarily cheap.
While many drivers choose to buy or finance trailers, leasing may be better for new business owners. This approach can have numerous advantages that are particularly well-suited for anyone just getting started. If you're trying to decide which option is right for your business, consider these three reasons that a lease might be an excellent way to bootstrap your new operation.
1. Reduced Capital Investment
There's no avoiding the initial outlay of funds when purchasing a trailer. Even if you're financing, you'll still need to put down enough money for an initial down payment. This extra money can cut into your available funds and drastically increase your total startup costs, leaving you with less cash on hand for other purchases.
Saving money on your trailer can also be helpful if you're purchasing a used tractor. While it's always best to buy a rig that's as trouble-free as possible, you never know when unexpected repairs can strike. The extra money you save by avoiding a trailer down payment gives you the cushion you need to survive costly repairs.
2. Increased Flexibility
Semi-trailer leasing is a more short-term commitment than buying one, which means your business retains more flexibility. You can rent a trailer that's appropriate for the clients you'll be working for out of the gate and then switch to another option in the future if your customers or routes change. You can also choose to purchase or finance a trailer later if your operations remain static.
It's also critical to remember how valuable flexibility can be for new companies. By keeping your options open, you'll be able to pursue opportunities that provide the best revenue for your new business without feeling tied to a trailer you already own.
3. Fewer Long-Term Concerns
Maintaining a trailer over the long term may not cost as much as upkeep for the engine in your tractor, but it's still an added expense. If you're purchasing a trailer, you're putting yourself on the hook for these costs over the long run. A lease frees you from worrying about maintaining an aging trailer, and you can simply turn it in and lease a new one as your needs change.
While leasing offers benefits for all owner-operators, it's an option that may be especially helpful for new business owners. If you're looking for a way to cut costs for your new business while staying flexible, a leased trailer may be exactly what you need.