Lease vs. Rent: How To Choose
Leases and rentals give fleets flexibility to adjust the number of vehicles they need without making long-term, up-front capital commitments, and there are similarities between the two. Both provide capacity without significant capital investments and give fleet operators flexibility in the number of vehicles they keep.
However, there are also differences that companies need to keep in mind when determining the best solution for their needs.
Benefits of Leases and Rentals
Fleets use a variety of acquisition strategies for equipment. The National Private Truck Council’s 2023 Benchmarking Survey found that 30% of the fleets taking part in the survey leased all or most of their heavy-duty units, and another 30% used a combination of ownership and leasing acquisition strategies. Additionally, 29% of respondents operating heavy-duty equipment said they had turned to the rental market in the past year.
Advantages of leases and rentals include:
Lower Initial Investments: Commercial vehicles are costly, and leases and rentals allow fleets to increase their capacity without a significant capital investment.
No Hidden Costs: Besides the hard costs associated with purchasing assets, there can also be hidden costs, such as taxes and licensing. With leases and rentals, those costs are included, making it easier to budget.
Late-Model Equipment: Rentals and leases allow fleets to obtain late-model equipment, giving them access to the latest technology, safety and driver-comfort features.
Robust, Included Maintenance: Maintenance is a critical aspect of increasing uptime and operating a safe fleet. Penske’s rentals and leases include maintenance and repairs and wear-and-tear items such as tires. Penske offers a nationwide network of service locations to meet preventive maintenance and over-the-road repair needs. Because maintenance costs are included, fleets can avoid unexpected repair costs.
24/7 Support and Replacement Vehicles: If a problem does occur with either a lease or rental, roadside support is available around the clock. If needed, Penske can provide a replacement unit to keep freight moving.
Technology Support: Rental and lease customers gain access to Fleet Insight™, which is available on desktop and mobile. Through Fleet Insight, fleets can customize reporting, manage maintenance repairs, access billing and invoicing, and analyze reporting and data trends.
Rental customers can also use it to view and edit reservations.
Key Business Considerations
When choosing between a lease or a rental to add capacity, there are important factors to consider. These include:
Duration of Need: The length of time equipment is needed can determine whether a rental or leased truck is the best approach. Rental trucks can be rented daily, weekly or monthly, so they are ideal for short-term surges and seasonal demand. Lease periods tend to be longer, making them a good choice for longer-term, consistent and ongoing operations.
Flexibility Requirements: Penske offers flexible reservation and cancellation policies on rentals, giving fleets more flexibility if their needs change. Customers can also take advantage of rent-to-lease conversions if they determine a longer-term commitment is needed.
Growth Expectations: A business’s growth plans can help determine what type of additional capacity is needed. If the company anticipates expanding its fleet to meet consistent, longer-term needs, leasing can provide a more structured and scalable approach. If growth is uncertain, a rental that can be transitioned to a lease could be a better option.
Finances: Finances are always an essential consideration in any business decision. Leases can provide savings over rentals. Fleets interested in transitioning to leasing from ownership can utilize Penske’s Sell2Lease program. Penske will buy customers’ used trucks, regardless of the fleet’s age or condition, with a fair and competitive offer.
Penske Solutions
Penske offers a wide range of equipment available to lease or rent, including Class 8 day-cab and sleeper tractors, dry-van, pup and flatbed trailers, refrigerator trucks and trailers, high-roof cargo vans, straight trucks with liftgates and more. Customers can also choose alternative fuel options, including electric and natural gas vehicles.