The True Costs Fleet Ownership

The True Costs of Fleet Ownership

Fleet Ownership is often thought of as a necessity to anyone that operates a large fleet ­however, this not true. While fleet ownership does have it its benefits, often times there are large downsides to fleet ownership such as immediate vehicle depreciation and rising maintenance costs as your fleet ages. One the biggest downsides to owning your fleet is the equity you have invested in your trucks. By leasing your trucks, you can expand your fleet without putting your company’s credit at as risk. Another advantage of not owning your fleet is the fact that your lines of credit can be used to expand your business or purchase the necessary equipment your company needs to operate

Fleet depreciation is often an afterthought to fleet owners/managers; however, vehicle depreciation can harm the financial health of your company for several reasons such as, going upside down the vehicle loan (owing more than the vehicle is worth), low vehicle trade in and resale values and the need to disperse large amounts of capital and or credit to purchase new vehicles. While vehicle depreciation might seem somewhat of a “natural occurrence” when owning a fleet of vehicles, it can be a detriment to a company’s finances and ability to operate. The longer your company operates a vehicle the more expensive it becomes to maintain. As your fleet ages maintenance, can become a burden to your company’s finances. Repairing older high mileage vehicles is costly because labor has to be paid for, your vehicle is down and you have to bear the cost of renting or leasing a vehicle until the vehicle is repaired. Having a down vehicle can also cause your company to lose money, after all your company will not make money if your trucks aren’t moving.

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