Heavy Duty Trucking, April 2018

cycle to lower their total costs by utilizing flexible leasing Holland holds that leasing provides the flexibility to run newer equipment more frequently That provides many benefits including lower total cost of ownership reduced emissions safety improvements and better driver retention and recruitment since drivers prefer to operate newer trucks he says When deciding whether to lease or own fleets need to recognize their true cost of doing business vs spreading out the overhead costs says PacLeases Civitts He says lessors are also doing more and more with technology for their customers noting that the cost of compliance now includes dealing with ELDs various emission systems and stopping distances And we definitely have seen the annual hours it takes to keep new trucks maintained increasing A good full service lessor can handle all this for a known amount he continues and other services can be bundled in as the customer chooses from washing trucks and replacement vehicles when needed to fuel tax reporting and compliance management A lease can truly become a one stop transportation solution Fresh wrinkle Ryders Leon says theres a fresh wrinkle that may influence the lease vs own decision in the coming years We have entered a new landscape with the lowered tax rate now a flat rate of 21 per the new tax reform bill that became law in January which favorably leans toward equipment leasing Under the new scenario he explains the timing advantage of accelerated depreciation is diminished and interest expense will no longer automatically be 100 deductible In addition businesses may no longer use like kind exchange programs for vehicles and therefore no longer defer taxable gains on the sale of vehicles Penske Truck Leasing Senior Vice President Jim Lager expects that in most cases the tax changes will tip the scale in favor of leasing There are if you will moving parts within this tax reform Its not just about gaining bonus depreciation because on the other hand you can only take so much That is the rules on pass through earnings limits the benefit of bonus depreciation We can conduct a comparative value analysis for customers using their information to calculate all this for them Lager explains further that bonus depreciation will come into play only if assets are carried on the fleets books whether by owning or financing equipment By contrast if the fleet has an operating full service lease that benefit is baked into our rates Sunshine rule On top of the new tax law there are new accounting rules coming into play that may impact leasing decisions says Patrick GasOWNING VS LEASING HDT APRIL 2018 66 WWW TRUCKINGINFO COM Civitts says typically a fleet pays cash or finances ownership if its primary source of revenue comes from trucking Those choosing full service leasing tend to operate trucks to support their business operations like a company that sells fuel and needs trucks to get it there According to Brian Holland president and CFO of Fleet Advantage which provides equipment financing and lifecycle cost management to fleets basing the lease vs buy decision on functional obsolescence and for how many years trucks can be operated is outdated Instead he contends fleets should look at economic obsolescence which uses data and analytics to determine how many years each individual truck should be operated We call this the tipping point that point in time where it costs more to maintain and fuel an existing vehicle than it does to replace it with a new more fuel efficient model Under this approach a fleet would move to a shorter asset life Full service leasing is a growth market and has been for quite some time now Joseph Gallick NationaLease SERVICESUP TO8 8 oz 237 ml twin neck bottle for easy measuring Highly concentrated and fluoresces yellow greenGLOWS BRIGHTER THAN THE COMPETITIONDYE LITE ALL IN ONE COMPLETE SYSTEM COVERAGEAPPROVEDTO LEARN MORE SCAN QR CODE OR VISIT WWW TRACERPRODUCTS COMTP 3405 0008DYE LITE ALL IN ONE OIL DYEPROFESSIONAL OEM GRADE LEAK DETECTION