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Buying vs renting trucks for business use: the pros and cons

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This guide outlines all the advantages and disadvantages of buying vs renting trucks for business deliveries.

Running your own business involves delivering your goods to customers right from your hands to theirs. You are often going to need a vehicle to get the product from point A to point B.  Trucks are helpful in this endeavor because you can haul goods in their beds, while cars have only small trunks to place stuff in. The problem is that trucks are so much more expensive than cars. That’s not even considering the increased rates on insurance for these big vehicles. 

When you take out 4×4 truck insurance or a policy on a similar truck, it is almost always going to be more expensive than a policy for a smaller vehicle like a sedan or an SUV. This happens for a variety of reasons, mainly because trucks are more expensive to repair after an auto accident and pose a bigger risk to the insurance companies. 

A possible solution is renting a truck instead. If you are only going to be using a vehicle occasionally for your business, you could save money by renting. Still, insurance is required for any truck that is driven for business purposes, even if you are renting. 

Buying vs renting trucks: pros and cons

We need to discuss the pros and cons of buying vs renting a truck for a small business. We will talk about whether the insurance policies that are taken out on these vehicles are affected by buying or renting, and whether you even need a vehicle at all for your business. 

Pros of Renting

Renting a truck can be cheaper than buying it if you’re only planning on using the vehicle for a short time. Trucks usually cost a lot more than sedans, vans, and motorcycles, so renting can save you money in the short term. 

Say you are delivering your own goods for two months until you can outsource your delivery for your small business. It wouldn’t make sense to buy several $50,000 trucks in January just to get rid of them in March.

Cons of Renting

The major cons of renting have to do with the time you will be using your truck. As we already mentioned, rental costs are going to stack up if you will be delivering your own company goods for two years. In the long term, buying a truck or two is going to be the better financial decision.

Renting a truck also leads to the insurance problems we talked about before. You always need to take out insurance on your vehicles, including ones that are for company business.

Many folks will try to use their personal policies to make claims on accidents that happen during work. Most of the time, this is not going to go over well with your insurer. They are going to ask you to take out a separate policy if the vehicle is being used strictly for work or company stuff.

Renters insurance on a company vehicle is going to be very high because you are a riskier client. Company vehicles are constantly on the road, and because you don’t own the vehicle, the insurer might deem that you won’t be as careful with your rental. Compare costs of insurance on rentals versus purchases and see what works for you.

Pros of Buying 

Buying gives you the freedom to choose a truck freely, modify it, and get cheaper car insurance policies than renting. It also gives you more flexibility with when and where the truck can be driven. Imagine that you have a delivery that is due on the day that the rental expires and you forgot about this date.  Buying takes away the hassle of using someone else’s stuff and having to return it on their schedule instead of yours. 

Cons of Buying

Buying a truck is a big investment for your company. Think about whether you actually need such a vehicle. Would it be better to join a car share if you are simply transporting yourself or employees to your job site?

Trucks are going to put a huge dent in your young company’s budget, and if there is an accident requiring insurance coverage, navigating the claims process can be tricky.

The verdict

The honest answer is that every company is going to have to decide for themselves whether buying or renting is better. Every scenario calls for a different solution; those needing delivery drivers will have different needs than those wanting to start a food truck business.

The short versus long-term use of a truck is going to factor in the most heavily, but you can also get creative in your driving endeavors to save money after making your purchase or rental. Having employees share a truck, figuring out how to shorten the drive to work or the delivery point, or trying to get into local shops with your product before delivering full time are all good alternatives. Whatever you decide to do, just make sure you compare rates and know your business’s needs inside and out. 

Shawn Laib writes and researches about car insurance. He has a strong desire to educate small business owners on the pitfalls of poor decision-making early on in their business. 

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