When it comes to the dry van trailers, flatbed trailers, refrigerated trailers, lift gate trailers, or other semi trailers your business needs to operate, how you choose to acquire them is an important tactical decision. Whether you are in the trucking, warehousing, or transportation business, getting cartage trailers, storage trailers, and over the road trailers in the way that best aligns with your financial strategy is critical to your success.
Does that mean renting a semi trailer? Would a long-term trailer lease provide financial advantages? Or does buying a semi trailer make more sense? There are many factors that go into answering those questions.
Renting a Semi Trailer
Renting a semi trailer involves entering into a short-term contract with a provider like Boxwheel, and often is a tactic for addressing an immediate, generally temporary deficit in transportation capacity. In some cases, however, it is a long-range or ongoing strategy.
Taking advantage of a trailer for rent is an excellent approach if you:
- Need equipment promptly
- Require a trailer for either a relatively brief period or an unknown length of time
- Have seasonal fluctuations in your workload
- Need to fill gaps created by a transition in your leasing/purchasing cycle
- Are starting a business and need trailers to accommodate immediate needs as you develop your long-term strategy
- Value speed, ease of doing business, and relatively inexpensive up front costs
For fast access to high-quality semi trailers, renting is a great option. There are, of course, some drawbacks to renting. For example, the rates might be higher than with a long-term lease or a purchase. And, some people feel there is a greater sense of security and continuity with trailers that they lease or own.
Leasing a Semi Trailer
An over the road semi trailer lease is an agreement between you (the “lessee”) and a provider like Boxwheel (the “lessor”). According to what are known as the “terms” of the lease, you are allowed to use the semi trailer for a defined time period for the stated fees. The provider retains ownership of the trailer, which is returned at the end of the lease if you don’t renew. In some cases, you might also have the option to purchase the trailer at the conclusion of the lease term.
As with any business agreement, there are pros and cons to trailer rentals. Advantages include:
- Lower upfront costs compared to buying semi trailers
- No risk of manufacturer delays affecting availability
- Cash flow benefits of taking leasing costs as a monthly expense
- Better rate structure than with renting
- Trailers optimized for a specific use
- Security of knowing trailers are yours until the end of the lease term
If there is any “downside” to trailer leasing it is that the semi trailers aren’t your assets and therefore don’t add to the valuation of your company. Plus, while you have the comfort of knowing how long they will be in your possession, you still may not have the level of confidence you would enjoy with an owned fleet, and you will need to renew the leases on a regular basis.
Buying a Semi Trailer
Buying a semi trailer is a significant investment. Like purchasing a building for your company, buying a trailer gives you many rights in how it is used or modified during the payment period and full rights once it is paid off. And, every payment you make on a trailer from a trailer sales company like Boxwheel builds your equity.
Buying a semi trailer provides certain benefits, including:
- Having an asset that figures into the value of your company
- Controlling maintenance of, and any modifications to, the trailer
- Being able to sell the trailer later
Of course, many operations, as successful as they may be, might not ever have the financial resources to purchase a semi trailer. Another drawback to owning a trailer is that operating and maintaining it is now fully your responsibility. Also, you no longer have the flexibility to respond to changing business conditions as easily as you would if you were renting or leasing.
Tips for Renting Trailers, Leasing Trailers, or Buying Trailers
Whether you rent, lease, or buy trailers to meet your needs, there are certain key considerations to keep in mind.
For example, you should:
- Know where, how, and by whom the trailer was operated, as some prior uses (e.g., hauling heavy material like paper products) may make it inappropriate for your needs or a riskier investment
- Ensure that all required maintenance has been performed to date according to the manufacturer’s maintenance schedule
- Confirm that the trailer has the right options for how you intend to use it (e.g., roll door vs. swing door, air ride vs. spring ride, etc.)
- Ensure that its specs meet the requirements in the location(s) in which you plan to use it (e.g., it doesn’t exceed the maximum height of bridges the driver will encounter or the length restrictions in larger cities)
- Be clear on responsibilities regarding the trailer’s maintenance, licensing, and insurance.
- Be sure you understand all the mechanical features of the trailer
Working With a Provider That Can Meet Your Needs
Some semi trailer providers specialize in one area: rentals, leased trailers, or trailers for sale. If you are unsure about how to meet your trailer needs, or anticipate that your needs will change over time, it makes sense to work with a company like Boxwheel that has extensive expertise in renting, leasing, and selling trailers from a wide range of manufacturers including Great Dane, Wabash, and Utility.
That way, if you choose primarily to lease your trailers, for example, but expect some seasonal surges where you’ll need to rent trailers, you can continue working with the company you know and trust. Or, if you are a startup and want to rent trailers until you are ready to commit to a lease or purchase, you’re perfectly positioned when the time comes for a more long-term solution.
If you have questions about renting, leasing, or buying from Boxwheel, we’re happy to answer them. Contact us at your convenience and we can tell you about our inventory, our industry-leading service, and our reputation for making it affordable, safe, and easy to get on the road with the right semi trailer.