Does your business have some shipping needs? You’re not shipping often enough to justify the expense of maintaining a fleet but going through a logistics supplier is becoming expensive. You want a little more control over your shipping needs but you don’t want to blow your budget.
An option to consider is looking at semi-trailers for rent. Sure, you can lease a semi-trailer for a fraction of the cost associated with buying one. However, before rushing out to sign a rental agreement, it’s a good idea to learn a little more about the advantages and potential downsides.
If you’re only delivering a few small boxes now and then to local customers, a semi-trailer may be a bit extreme.
In this scenario, you may want to downsize and consider renting a cargo van. You may even want to list an employee’s vehicle on your company’s insurance policy. If the employee’s vehicle is large enough, they may be able to handle your occasional deliveries.
However, if you're sending out large shipments, leasing a semi-trailer may be the ideal solution. To help, here’s a look at some of the advantages you can get when you rent a semi-trailer.
Semi-trailers may not have a ton of working components, they’re essentially large boxes on wheels. The back doors slide up and there’s a towing hitch, this doesn’t seem like a lot to maintain.
However, semi-trailers are a bit more complex than you may realize, which means they require routine maintenance. Everything from ensuring the tires are road-worthy to the hitch being in proper working order can be expensive.
Don’t forget about insurance. You’ll need to add the trailer to your company’s insurance policy and this can drive up rates. Leasing a semi-trailer eliminates most if not all of these costs.
Do you need a semi-trailer for a few months or only a couple of weeks? If so, a rental agency is probably your most cost-effective option. Most semi-trailer rental agencies offer flexible lease agreements. You only pay for the time you actually need to use the semi-trailer.
What happens if you need to extend the lease agreement? Most rental companies will happily extend the lease without charging you additional fees. If you return the semi-trailer late, you should expect to pay a fine. The amount of the late fee varies depending on the rental agency but it’s rarely cheap.
To avoid getting hit with a late fee it’s usually a good idea to rent the semi-trailer for a day or two longer than you plan on using it. This way, if something delays the return you’re not blowing your company’s shipping budget.
The Federal Motor Carrier Safety Administration sets down regulations that semi-truck and semi-trailer owners must follow. Most states and even municipalities also have compliance standards.
Some of the standards are pretty easy to meet and others may require industry knowledge. However, since you’re leasing the semi-trailer, it’s not your responsibility to ensure the vehicle meets all compliance standards. Not only does this relieve a lot of stress, but it can also result in significant savings. If the semi-trailer is out of compliance, you’re not responsible for covering the fines and other potential penalties.
As we mentioned earlier, owning a semi-trailer can be expensive. From maintenance to inspections and compliance issues, a semi-trailer can tie up a significant portion of your company’s cash flow.
Something else to consider is vehicle depreciation. Every time the semi-trailer hits the road it loses value. Since this isn’t your investment, it’s not something your business needs to worry about.
Even though there are good reasons to consider leasing a semi-trailer, there can also be a few potential downsides. Not all leasing agencies offer flexible rental programs. You may even incur a fee for extending the rental agreement.
Some rental agencies may only offer set leasing programs, and this may mean you’re stuck with a semi-trailer for a week when you only needed it for a day. Now, you have to find a safe place to store the semi-trailer until it’s time to return it to the rental company. If you don’t have a place to park the trailer, this may mean renting a spot and this is an additional expense.
Don’t forget about paying for fuel. If you’re only renting the trailer and not the cab, don’t worry about filling the tank up before returning the semi-trailer to the leasing agency.
You will need to pay for insurance while the semi-trailer is on your property. Yes, the leasing agency also carries insurance on the trailer but it’s still your responsibility once you sign the rental agreement. Adding a semi-trailer temporarily to your business insurance policy isn’t too difficult but it can be expensive even if you only need it for a single day. You may be able to lower insurance rates a bit but it depends on the policy provider.
Figuring out your business taxes can be a nightmare when factoring in a rental semi-trailer. You can usually deduct some items like fuel from your business taxes but leasing the vehicle changes things. To avoid being audited by the IRS, it’s a good idea to leave your taxes to a professional business accountant. They understand the ins and outs of the tax code.
Since most businesses already rely on professionals to handle their taxes, this may not be an applicable downside. However, it’s something to consider before leasing a semi-trailer.
Renting a semi-trailer has its advantages and it can be the right move for your business. Leasing the trailer means you’re not responsible for most of the costs that come with vehicle ownership.
However, you can also run into a few potential downsides like difficulty figuring out your business taxes and inflexible rental agreements. Knowing the ups and downs of semi-trailer rental can make it easier to make the right decision for your business.
