Page 17 - ATR 2 2012 web 2

a Closer look

Is truck leasing gaining an edge over purchasing?

By Steve Brawner

Contributing Writer

When Paul Ray Trucking of
Nashville, Ark. secured a new account
hauling for International Paper, its owner
tried a new approach: Instead of adding
22 vehicles to his fleet of 40, he decided
to lease them.
“We just kind of put some numbers
together,” Ray said. “I like it because I
know what I’m going to do; how much
money I’m going to make.”
Ray leases each of the vehicles for
$1,900 a month plus 6-cents per mile
to haul freight 2,200 miles per week.
Because he’s not responsible for mainte-
nance, he knows exactly what his costs
and revenues will be, as opposed to pay-
ing $3,000 a month for tractors that
could break down tomorrow and whose
resale values are uncertain.
“I might do them all like this,” he
said. “I’m going to see how this goes.
Within four or five months, if it looks
good, I’m probably going to lease them
all.”
Three companies were contacted
for this story: Bell & Company and
Arvest Equipment Finance, both based in
Arkansas, and Regions Bank Equipment (Last year, it was 100 percent.) A truck- cash flow and transfers risk away from
Finance Corp. out of Nashville, Tenn. ing company that purchases its vehicle the trucking company.
They acknowledged most trucking com- has an asset that it totally controls and “Slowly but surely, people are see-
panies are buying equipment. But the can sell when the time comes. Finally, ing it as a financing vehicle, and they’re
reasons for leasing are growing. owning the tools of your trade is part seeing that if you’re working with a
There are several good reasons for of the American dream, and with inter- reputable firm, and you understand the
buying, including a federal law which est rates at historic lows, there wouldn’t structure, really, I compare it to financ-
allows trucking companies to deduct seem to be a better time to finance a ing,” said Mark Jannetty, vice president
the entire cost of a vehicle over three major purchase. of Regions Bank Equipment Finance
years. Fifty percent of the cost of vehicles Leasing remains an attractive option Corp. “It’s similar to financing some-
placed in service in 2012 are eligible to be however. It offers its own tax advantages, thing through a loan. We’re just giving
deducted as bonus depreciation this year. frees up capital for other needs, simplifies
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ArkAnSAS trucking report | issue 2 2012 17