In this ever-changing world of uncertainty, now more than ever, business owners are often left facing tough choices on how they can stay competitive in their industry. For logistic businesses, hauliers and transport firms, making the right decision when it comes to determining whether or not you should hire or buy a semi-trailer outright can be a difficult one. To help make the decision that little bit easier, we’ve put together an in-depth look at the two options and examined the advantages and disadvantages of each approach.
To buy?
Owning a semi-trailer can be an incredibly valuable asset for any business. It offers the freedom to manage your own fleet and take on more jobs without having to worry about availability or cost of hire. However, being an owner can – at times – have its disadvantages, especially if you face uncertainty in terms of how much work you have on. In such instances, it can be risky to lock up valuable capital in vehicles you may only need for a short time.
Pros of buying a trailer:
- Owning a trailer offers you more control over your fleet and allows for more flexibility in terms of how and when it is used.
- Buying a trailer can provide lower costs in the long term, as you only need to pay the initial purchase price, as opposed to ongoing hire fees.
- The freedom to do as many miles as you like, when you like.
- Owning a valuable asset and, of course, the option to sell and regain a portion of the cost when you no longer need it.
Cons of buying a trailer:
- The initial investment is greater – you will need to pay for the upfront cost of the trailer and any associated taxes/fees.
- Vehicle values depreciate due to wear and tear, meaning that any repair or replacement costs can add up in the long run.
- If you lose a contract or your workload decreases, the costs associated with owning a trailer can become very expensive. You may be left with an idle fleet that must be maintained and serviced but isn’t generating any income.
Or to hire?
What with today’s volatile climate, hiring trailers instead of buying them has become an increasingly popular solution for many businesses. Hiring a trailer gives you the flexibility to manage your fleet without having to commit to the costs and risks associated with owning one outright.
Pros of hiring a trailer:
- The initial costs are lower since you only pay for what is required in the short term.
- With trailer hire, you have the flexibility to switch between different types of semi-trailers, depending on your needs.
- The maintenance and servicing costs are lower as you won’t be responsible for things like repairs, fixing any damages etc.
- No depreciation costs, so you won’t have to worry about losing money on a valuable asset that will inevitably decrease in value over time.
Cons of hiring a trailer:
- You don’t own the trailer, therefore, the ongoing charges of hiring can become expensive in the long run.
- Your freedom to use the trailer as you please may be limited since you won’t own it outright. This can be an issue with some suppliers, especially during peak times.
- You may face mileage limits. If you go over the agreed amount or damage the trailer in any way, you will be required to pay extra fees.
Ultimately, the decision between buying and hiring semi-trailers will depend on your individual needs and requirements. What works best for one business may not be ideal for another. Whilst buying trailers may be a more expensive option in the short term, it can often prove to be more cost-effective in the long run, as long as you are confident of having enough work to cover running costs. On the other hand, hiring can offer greater flexibility and help minimise risks for businesses with more unpredictable workloads.
Whatever approach you decide to take, it’s important that you consider all your options and make sure you make the right choice for you and your business.
