At some point, most businesses will wonder whether it's
worth buying a trailer rather than leasing one. The answer depends very much on
your position and business objectives, as well as your tax status. Sometimes leasing
can be favourable for tax purposes in terms of repayments and it can help to
have fewer assets on the books. However, there are definite benefits to owning
directly too, particularly if the cost argument wins and you can lease your
trailer out to other businesses.
The Pros of Ownership
Leasing can impose restrictions on your trailer usage.
When you own outright, it is yours to do with as you will. After the initial
outlay cost, you won't have any ongoing leasing payments to cover either.
Control is another big factor. When you are in control of
your own trailer, you can be sure that it is legally compliant and roadworthy
and you will naturally take good care of it.
When you buy confidently, you also gain confidence in
what you are buying and your equipment. This can be a problem with some leases,
where quality is unknown until tested.
Depreciation savings can also be realised at the start of
the ownership period or amortised over the trailer's lifespan, depending on
which treatment is more advantageous for the business.
Another benefit is the ability to customise the trailer
to show your business branding and gain a new marketing channel.
There are also some excellent offers available on used trailers and prices can be attractive. If well cared for, used
trailers can work effectively for fifteen years or more, making them a sound
investment for your business.
Some businesses also lease or rent out their trailers to
neighbouring farms or other businesses to bring in extra income and to offset
the cost of the trailer. This can be worth considering if you are seeking an
extra income source.
But for balance, we also need to consider some of the
benefits of leasing.
Firstly, ownership brings about the inevitable costs of
maintenance, repair and upkeep. These are largely exempt from a leasing
arrangement.
Equipment ageing is a problem over time, whereas a lease
can see you upgrade at every contract renewal to a new model. With a leasing
arrangement, you can also often afford a higher-spec trailer model than you
could if you were buying outright.
Ultimately, the choice will depend on your available
finances, your objectives and your business plan. Seek help from a business
advisor if necessary so that you can feel confident in your decision.
