Leasing for your Towing business has become a great alternative to purchasing. Tow Trucks, Wreckers and/or Car Carriers, are huge investments and making the decision on whether to purchase or lease is major. Both options have their pros and cons. But with creative lease packages available that are designed to fit the needs of the customer, leasing has become the preferred financing alternative.
Why should you choose leasing over buying? Well, having a choice is a great reason. You have the choice on what you want to do with your truck. At the end of your lease contract there is the "residual" amount that you can buy the truck from the lease company. Residuals can range from $1.00 to 50% of the original purchase price of the truck. You have the choice on whether to buy the truck, or let the lease company have the truck back. Leasing contracts can go from 3 years and up. So at the end of your lease you are not stuck with a used truck. You can let the lease company take over the truck and release you from the burden.
Another reason would be profit. Having a higher profit margin at the end of every month can be very important to a company. If you look at a monthly lease payment and compare it to the amount of depreciation, plus interest on a conventional loan, it is easy to see that there is an overall lower monthly expense. This leads to a higher profit margin every month, which can mean more money in pocket.
Money can be a great reason for leasing. Leasing a New or Used Tow Truck can help preserve cash flow. Every business needs to protect their available cash flow. Most leases just require the first and last month lease payment to get started. With a lease you can eliminate the need for the common 20% down payment that is required on many conventional loans. Not having to make that hefty down payment can keep money in your businesses pocket. Click here Truck Wreckers Melbourne
Having that positive cash flow can make for a better balance sheet. An operating lease is a monthly expense. But it does not show up as a long term debt on the company's balance sheet. Having the cash on hand can have a positive look on our balance sheets every month. Also your business appears to have a higher net worth because of the lack of debt.
Profit can be another reason for Leasing. Looking at a monthly lease payment and comparing it to the amount of depreciation, plus interest on a conventional loan. There is an overall lower monthly expense. This leads to a higher profit margin every month, which can mean more pocket money for the business.
As you can see there are some great reasons for leasing a Tow Truck, Wrecker and/or Carrier instead of purchasing. When making a decision as important as stocking your Towing company with quality machinery, Leasing can be a great alternative.