Buying vs Renting

[atlwww]

Hi guys,

My name is Steven, I am new to the forum. I need advice on whether I should buy a truck or just lease it for my business. I've read other post but seems like none of them are related to my dilemma.

I have a wholesale business, we are looking to do over 20 trade shows for this year. With the cheapest truck rental, we are looking to spend $2100 + $0.19/mile for a a monthly rental. Each show averages 800 miles round trip. We are looking to spend around $800 per show. That's $16000 out of pocket just on the truck rental, not counting the fuel cost will be higher(heard it from other thread).

I read from other posts that buying a truck will require commercial insurance for the truck, DOT sticker(what's required to get that? Any link to those information will be greatly appreciated) I have a class D driver's license from New York State, will I still need a commercial driver's license? How much will truck maintenance/repair be per year?

Most of my merchandise is on wheeled wired shelf, I would love to have a dock height truck as it makes unloading very easy. But most of the dock height trucks are class 6; that's too much for my need. I haul about 5500 lb +/- of merchandise. I think something like Isuzu NPR should be enough. I don't have any knowledge about truck so any truck recommendations or dock height solutions will be great.

Thanks

 

[jjtdrv4u]

rent/lease a truck, unless you are going to use it every day;

for your part time work, rent is cheaper, plus it is a total write off for your taxes,

penske or ryder would love to rent you one.

 

[tknight]

You can lease from Ryder on a 5 year lease they will build you a truck I've seen dock high Mitsubishi cusps that were pretty nice for your use just make sure it has real seats your butt an droids will thank you

 

[sewmun]

I've rented a few trucks & then used a pickup & trailer to go to trade shows & had a 20'10k trailer built so I could haul heavier loads,but it caused problems w/our products getting bent & damaged do to bumps in the road like on overpass's .SO I decided to find a straight truck w/airide.I found one Ryder had bought I one-way ticket & bought it.It has 191,000 mi & came with all the maintenece records,it was a lease truck.It also has a liftgate that we use all the time.It has an extra high box that make an attic in the front 8' long for some boxes I have to haul to the shows I go to.
I also haul my own freight in it that we import.It is very handy to own one because we can take our time loading & unloading it.Sometimes as we get ready f/a show we put alittle in @ a time as we get it ready.
I bought it around 5 years ago & think it's been one of the best investments I've bought.

 

[mugurpe]

I would second the lease suggestion. Based on my own experiences buying and dealing with these companies I'd recommend going with Penske.

As for renting, I think you're right at the split where renting vs leasing is a tough decision. If you go with renting I'd recommend finding a trade organization that has a negotiated rate with penske as that can bring the cost down SIGNIFICANTLY. We go through the american moving and storage association. We get other benefits from that membership as well, so there may be some trade-show oriented group that would work for you that also has a penske negotiated-rate-account.

if you're going for a dockheight lease truck and can take your pick I'd recommend isuzu over mitsubishi. Some rental locations once you get to know them will let you keep a rental in your yard, but not have it active and just activate it when you need it, that is, if they're not super busy and need it. That kind of arrangement can be very convenient.

If you're not into trucks (as in you wish you where a trucker and want to get out of tradeshows), if you don't have a commercial truck background, or if it's not the main thrust of your business, don't buy one. The amount you MIGHT save via ownership vs lease/rent is probably not worth the learning curve and it'll be a terrible distraction. Remember, you're in the trade-show business, not the trucking business.

as for inspeciton, insurance etc. It's all rather expensive and if you're crossing state lines (800 mile trips would suggest that) you'll need authority which is also a pain in the ***, though I've heard not-for-hire authority is easier assuming you're only hauling things you own. rentals would mean you could get by without applying for authority probably, leasing would mean needing your own DOT# though it's possible penske or ryder could help with that.

 

[tknight]

I know of a pretty new low mileage fido for lease to buy in San Fran let me know I'll hook ya up

 

[atlwww]

I've rented a few trucks & then used a pickup & trailer to go to trade shows & had a 20'10k trailer built so I could haul heavier loads,but it caused problems w/our products getting bent & damaged do to bumps in the road like on overpass's .SO I decided to find a straight truck w/airide.I found one Ryder had bought I one-way ticket & bought it.It has 191,000 mi & came with all the maintenece records,it was a lease truck.It also has a liftgate that we use all the time.It has an extra high box that make an attic in the front 8' long for some boxes I have to haul to the shows I go to.
I also haul my own freight in it that we import.It is very handy to own one because we can take our time loading & unloading it.Sometimes as we get ready f/a show we put alittle in @ a time as we get it ready.
I bought it around 5 years ago & think it's been one of the best investments I've bought.

I agree on having extra time to load when you own your truck. I rented last year and every time we go to show we have to work until late night, so we don't pass that one weekly rate. That was very tiring and I know I won't be able to handle it when doing it long term. Having own truck can definitely solve that.

 

[atlwww]

I would second the lease suggestion. Based on my own experiences buying and dealing with these companies I'd recommend going with Penske.

As for renting, I think you're right at the split where renting vs leasing is a tough decision. If you go with renting I'd recommend finding a trade organization that has a negotiated rate with penske as that can bring the cost down SIGNIFICANTLY. We go through the american moving and storage association. We get other benefits from that membership as well, so there may be some trade-show oriented group that would work for you that also has a penske negotiated-rate-account.

if you're going for a dockheight lease truck and can take your pick I'd recommend isuzu over mitsubishi. Some rental locations once you get to know them will let you keep a rental in your yard, but not have it active and just activate it when you need it, that is, if they're not super busy and need it. That kind of arrangement can be very convenient.

If you're not into trucks (as in you wish you where a trucker and want to get out of tradeshows), if you don't have a commercial truck background, or if it's not the main thrust of your business, don't buy one. The amount you MIGHT save via ownership vs lease/rent is probably not worth the learning curve and it'll be a terrible distraction. Remember, you're in the trade-show business, not the trucking business.

as for inspeciton, insurance etc. It's all rather expensive and if you're crossing state lines (800 mile trips would suggest that) you'll need authority which is also a pain in the ***, though I've heard not-for-hire authority is easier assuming you're only hauling things you own. rentals would mean you could get by without applying for authority probably, leasing would mean needing your own DOT# though it's possible penske or ryder could help with that.

Why Isuzu over Mitsubishi? I think Isuzu NPR isn't dock height either, unless there's a model I don't know about.

And what's the learning curve for owning a truck?

As far as insurance, my friend in same business has 26' class 6 truck and pays $300/month for insurance. I am getting a class 4 truck, I think it will be less than that, I would estimate insurance, inspection, maintenance and repair will be less than $6000/year, comparing it to $15000/year spent on the rental alone, it might be worth the hassle dealing with dot and stuff. Correct me if I am wrong

 

[atlwww]

I know of a pretty new low mileage fido for lease to buy in San Fran let me know I'll hook ya up

Thanks, but I think San Francisco is bit too far from Atlanta.

 

[tknight]

It's only 3 hrs by plane then you get to see the county on the way home or he can put some freight on it and you can make some mo money on the way home

 

[mugurpe]

well, based on the rates you quoted for rental, you should be able to knock 5-15% out of your rental cost right off the bat.

On the total cost of ownership there's plenty that's been written already on these and other forums. You've got the old new vs used debate, if new is there a payment/interest? is it all deductible up front? the insurance depends on the value of the truck if you're getting collision and if you're crossing state lines you'll need at least $750K in coverage, not sure if the $300 per month is for that or not. On dockheight trucks we'll assume 22.5 normal profile tires which are $225 per cheap recap, you get a highway blowout you're looking at a $300-$500 roadside repair bill, etc. But maybe the roadside guy doesn't have tires that are a good match for your tread/individual tire diameter/etc, so you get back home and then need to get another tire to make your set match to keep pressures and wear correct. You have a light out or something silly and you hit a weigh station and get put OOS, you get the ticket plus have to figure out how to get the issue fixed before you roll, maybe a roadside service call? again, expensive and more to learn about. On a leased truck it's all in the price, and they have their own roadside repair guys and will also bring you a rental for free if your truck is out of commission for a while. $6K may be accurate, but it might not. There's a lot to figure in depending upon the details, and a varying amount of learning depending on how you want to go about it. Like I said I own mine, but trucking is what we do and I spend a fair amount of time/money keeping things kosher, if trucking wasn't my main concern, I'd just lease a truck, or if my volume wasn't that high, rent (which I do when I need more equipment).

Mitsubishi doesn't currently offer a dockheight truck in the USA, neither does Isuzu. They both used to and probably will again later. the FE180 is the current largest and only goes to 18K lbs, the isuzu NRR goes to 25K. As for why is the isuzu better? they're pretty similar so not much. The isuzu cab has better visibility and is a nicer place to spend a day in my opinion. Fuso has recently had some real reliability issues lately that I've heard about from other local fleet owners that own both isuzu and fuso trucks. The quality of your local dealership and parts availability/proximity matter just as much or more as it impacts your downtime, and when you get an engine issue, if your local dealer has bad techs anything can happen, not all dealerships are equal. I've not driven every fuso model out there but I've owned 2 npr, one npr-hd and an ftr and they're all great trucks. I test drove fuso gear and opted not to buy it.

A class 4 truck will be cheaper to insure than a class 6 by about 30% I think, but it will also not be dock height. I might be wrong but I don't think any class 5 trucks are dock height either?

It's your choice. There's a definite satisfaction to being able to say "that's mine". Given the need for good DOT compliance and a focus that's not strictly transportation I'd suggest leasing. The low mileage however could make a case for an older used truck, but it also makes the case for continuing to rent, but trying to get yourself some nicer rates. An older used truck will require knowing a bit about trucks/mainenance/compliance to keep the costs down, a rental may mean not having to get a DOT #. Also, rentals do not ever get inspected at weigh stations. If you roll under your own DOT # expect to spend some time having your equipment checked by the state police on occasion, even if it's just a class 4, especially if it's not brand new. Cops love to nail class 4 trucks as they're very likely to catch an HOS or healthcard violation.

 

[Moot]

Another point to consider is the tax advantages of leasing vs. owning for your business.

 

[Moot]

Maybe one of these so called RV toy haulers would work for you. Gives you living quarters, space for your merchandise and no DOT hassles.

 

[tknight]

The toy haulers are nice but if you put your name to advertise it just remember your now a commercial vehicle again not dock high either but comfy none the less!

 

[sewmun]

I also thought of getting a Toyhauler & even found a bus w/a wheelchair lift & make it look like a motorhome.But knowing my luck I'd get stopped somewhere & get busted by a cop & then of course they'd give some fines for something??They are good @ doing that!!

 

[runrunner]

Why don't you just hire someone with a truck!

 

[atlwww]

Why don't you just hire someone with a truck!

It will cost more money, we try to save as much as we can.

 

[rollincoal]

The rate per mile on your rental sounds high. I rented a class 8 tractor from Penske a couple of years ago for 11 cents a mile (+ weekly rental fee) that was negotiated down from 13 cpm.

 

[tknight]

I haven't rented a truck lately have you rates for a 24 st8 non Cdl are around 100 a day and 20-25 a mile min less if your a regular and a good negotiator

 

[rollincoal]

They're really racking it up on straight trucks if that's what they charge per mile. More expensive than tractors but I guess if they can why not right? Rates on class 8 tractor were $850 a week for sleeper cab plus 13cpm or $750 a week plus 13cpm for a day cab. I was really in no position to negotiate anything as I only needed it for a few days and would have paid whatever it took. But I couldn't help myself and did talk them down to 11 cents per mile. They also didn't have a day cab available but offered a sleeper truck for daycab rate without me asking.