Smart Money: Leasing vs. owning your fleet: Which option drives your business forward?

Lane Powell

Lane Powell

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When it comes to managing a fleet of any kind, business owners and fleet managers face the critical decision of whether to lease or own their vehicles.

This choice impacts everything from upfront costs to long-term financial stability and operational flexibility. While both leasing and owning offer unique advantages, the decision depends on a variety of factors including business size, budget and long-term goals.


Understanding the difference between leasing vs. owning your fleet

Owning a fleet

When you purchase a vehicle or piece of machinery, whether outright or through financing, you gain that asset. This means you are responsible for all aspects of the fleet's operation and maintenance. Owning provides you full control over your fleet and gives you the opportunity to build equity, though it comes with higher upfront costs and long-term maintenance responsibilities.


Leasing a fleet

Leasing, on the other hand, involves renting a vehicle or piece of machinery for a fixed term from a leasing company or dealership. Typically, leases include maintenance and repair services, but the fleet is not owned by the lessee at the end of the lease term.

At the conclusion of the lease, the fleet must be returned, though many lease agreements offer the option to purchase the fleet or renew the lease.


Key differences between leasing vs. owning a fleet

1. Flexibility

Owning a fleet means the business has full ownership of the fleet assets, which can be used for as long as the owner desires. Owners can modify the vehicles, customize them, and use them as assets for securing loans or funding.

Leasing offers more flexibility in terms of fleet size. You’re not locked into a long-term commitment with a large capital investment. Leases often allow for periodic fleet upgrades, ensuring vehicles remain modern and efficient.

However, you’ll be restricted by the terms of the lease and may not have the same level of freedom to modify the fleet.


2. Initial and ongoing costs

Owning a fleet requires a significant upfront investment. Even with financing options, the cost of purchasing a piece of a fleet, whether it be machinery or a vehicle, can be a heavy financial burden for businesses.

Along with the purchase price, there are ongoing expenses for maintenance, repairs, and insurance, which are the responsibility of the owner. Leasing generally requires lower initial capital outlay. Leasing companies often cover maintenance and some operational costs. While you will still need to insure the truck, many additional costs associated with repairs and maintenance are rolled into the lease payments.


3. Depreciation and asset value

Owning a fleet means the assets depreciate over time, affecting the resale value.

While ownership allows you to recover some of that cost by selling or trading in the asset later, the depreciation may lower the resale value compared to when the piece was first purchased. Leasing removes the risk of depreciation because the asset is returned to the leasing company at the end of the contract.

Businesses don't need to worry about selling the asset or managing its depreciation —although they won’t benefit from any residual value either.


4. Maintenance responsibilities

Owning a fleet requires the owner to handle maintenance, repairs and any associated costs. This means that fleet managers need to budget for unexpected repairs and ensure regular maintenance to prevent costly breakdowns.

Leasing agreements often include a maintenance package, which can simplify fleet management. The leasing company may be responsible for repairs and servicing, potentially saving businesses money and ensuring their fleet is always in top working condition.

Which option is right for your business? Fleet managers and business owners should carefully consider both the financial implications and operational needs of their business before making a decision.

In many cases, a combination of both leasing and owning may be the best strategy, allowing companies to balance short-term flexibility with long-term stability.

Lane Powell is the chief operations officer of Peterbilt Truck Parts and Equipment and Silver State International. With over a decade of experience in the trucking industry, he has fostered innovation, collaboration, and mentorship within his companies.