Whether you are looking to buy or rent a trailer, you have some choices to consider. The biggest challenge is getting precisely what you need for what your budget allows. The best is to plan for the long term —think about the total time you will be requiring your trailer for.
Take a moment and analyse your requirements. Is acquiring a trailer something you see as a capital venture and expect a return on investment? Or are you acquiring a trailer for a short-term purpose and are prepared to look at it as a one-time expense that you are not worried about recovering?
Like most decisions, there are benefits of renting trailers and benefits of buying trailers. It comes down to making an informed and educated decision. The wise choice weighs the overall ownership cost against the rental option and then decides what the best investment is. Let us look at both avenues of renting and purchasing.
Benefits of Buying a Trailer
Why buy a trailer? Trailers are an outstanding investment as a business tool that you use to earn an income or for domestic purposes you might be a serious hobbyist who pulls a trailer full of recreational toys. Either way, if you plan to use your trailer often, you will want to investigate the benefits of buying a trailer.
- Capital Investment
If you purchase a trailer rather than rent one, you have a capital investment to show for it. In other words, your money goes into a hard asset. You have acquired a tangible commodity that’s yours, and you have a valuable possession that you call your own. A bought trailer becomes part of your overall portfolio whether you have made it as a business investment or consider it a personal asset.
- Return on Investment
When you have bought and paid for a trailer, you can expect a return on your investment. Unlike a rental arrangement where your money is gone after using the trailer, purchase agreements allow you to gain a return on your investment. That can be from using your trailer as a business venture or tool where it makes you money. Or it can be a return in the way of having a valuable commodity to your name that you can use to leverage other options like borrowing collateral.
- No Hidden Costs
When you buy and own a trailer, you have no hidden costs. With rental trailers, you are subject to the fine print in the terms and conditions of your agreement. Many trailer companies charge by time and distance, which is a fair arrangement. However, you must watch out for hidden costs like drop-off and late fees, additional insurance and deductible charges for wear and tear on the trailer. You do not have these hidden costs when you own your trailer.
- Availability
An owned trailer is an available trailer. It’s there when and where you need it, rather than having to contact a rental company and source a trailer when necessary. Having your trailer always available is a tremendous convenience. You have little or no downtime spent traveling to a rental agency and picking up a trailer. You also have the convenience of leaving your trailer loaded between uses which saves you more time.
- Flexibility
By buying a trailer and owning it outright, you have the flexibility to use your trailer as you see fit. You are not bound by terms and conditions that a rental company fix. You can loan or sub-let your trailer to another party, which you cannot do with a rental unit. You have the flexibility to convert your trailer into another configuration to serve a purpose you never anticipated. You also have the flexibility with ownership to sell your trailer if the right opportunity arises.
- Taxability
If you use your purchased trailer for business, you have some attractive tax benefits available. Whereas a rented trailer is considered a one-time business expense, a purchased trailer is a business asset. You are allowed tax deductions for depreciation which offset the initial purchase cost. This adds to your return on investment and makes taxability an attractive benefit rather than something to avoid.
- Overall Use
How many times you will use your trailer is a critical factor in tipping the ownership benefit scale. There will be a point where the number of times you use a trailer will make buying one the only sensible and logical option. That number of overall uses will depend on your specific situation. It also takes in the previous benefits and makes the total ownership package your only viable choice.
Benefits of Renting Trailers
Owning a trailer is often the best option for people. With all the attractive ownership advantages, you might wonder why people would ever rent a trailer.
There are times when renting a trailer does make sense. You must take in the pros and cons of buying trailers vs. renting trailers to finally arrive at the right decision. Here are some of the benefits of renting a trailer:
- Duration of Use
If you only need a trailer for a short duration or a one-time event, then yes, it makes sense to rent it. You have the convenience of getting in and out fast. You do not have the hassle of arranging for financing, and you do not have all the licensing, registration, and insurance paperwork to fill out. With short-term renting, you also do not have upkeep responsibilities that you do as an owner.
- Financial
Renting a trailer is a clever idea if you have financing issues. Most financial institutes require a substantial down payment, and that dips into your cash reserves. You might also have a significant existing debt-to-service ratio which makes financing a challenge. You do not have those problems with rental trailers. But, then again, you have no retained capital asset when renting as you do with owning.
- Storing
Where you store your trailer when not in use might be a challenge if you own it and have the trailer around permanently. Trailers take parking room. That could be a premium, depending on your location. If you rent a trailer, you can pick it up and drop it off at the rental company rather than trying to store it where you have little or no room. However, by renting, you are sacrificing availability which turns into time spent getting a trailer and sending it back.
- Maintenance
Rental companies have the responsibility to maintain their inventory. Reputable rental companies keep their fleet well-maintained because it makes good business sense. Regular maintenance costs money, and you can be sure it is built into your rental agreement. There is some peace of mind here. However, you are paying for it with no guarantee that you will not have problems on the road. When you own your trailer, you are in control of maintaining it. Now that can give you real peace of mind.