Leasing a Tow Truck
If you want to have your own tow truck business, you’ll have to decide whether leasing your vehicle or buying it will be the best choice for your business.
This is assuming that you don’t already have a dependable vehicle that you can tow with. Leasing vehicles used in business has become a great alternative to purchasing one.
Because of the huge investment involved in such a costly piece of equipment, many tow truck business operators opt for leasing their first tow truck and then seeing about purchasing one after the business is up and profitable enough.
Leasing has become the preferred financing choice because of the creative lease packages many dealers offer that are designed to fit the specific needs of the new business owner.
By leasing your tow truck from a dealer, you have the option of paying the ?residual’ payment of the leased vehicle’s value and actually owning the vehicle at the end of the lease term. This is very attractive to many business owners who want the option of being able to lease a newer vehicle or buying the leased vehicle when the term becomes due. This means that at the end of your lease term, you’re not stuck with a ‘used’ vehicle. You have the choice of what you want to do; either give the vehicle back to the dealer or lease a newer model, or pay the residual and own the vehicle outright.
By leasing your tow truck, you avoid the depreciation, interest and maintenance costs of a vehicle purchased through a conventional loan plan. This leads to a higher profit margin every month as the lease payment is usually much lower. This leaves your company with more money at the end of the month for things like payroll and marketing.
Leasing your tow truck will allow for more cash flow throughout the month, which is always important to any business. Also, leasing vehicles is usually cheaper as there’s no high down payment to come up with as there is with conventional loan purchases. An operating lease doesn’t show up as a long-term debt on the company’s balance sheet, which makes the business look much better every month without that apparent long-term debt load.