Buying vs Leasing a Truck in India – What Works Best for Truck Owners?

One of the most pressing questions in the logistics business is whether you should buy a truck or lease it. Even as the question might seem very plain to others, this is a very pertinent issue for the millions of truck drivers in India and around the world. Thus, any new business or a slightly older one, which is trying to expand, is faced with this question: Should they lease the truck or buy it?

The decision to lease or buy a truck cannot be a monolithic or objective answer. The choice ultimately depends upon a variety of factors and ranges from person to person and from one business to the other. This decision to buy or lease a truck in India can be influenced by several factors:

• The budget the company allocates to vehicles
• The miles that the trucks of company usually undertake. For instance, if the truck takes up a lot of miles, then buying might seem to be a more feasible option than leasing.
• If the company is in a money crunch, then leasing out a truck makes more sense than paying a hefty loan or EMI for months together. 
• If you require certain modifications in your vehicle, then owning or buying it would be beneficial, as you cannot do that in a truck, which you will lease.

What are the Benefits of Buying a Truck in India?

• Buying a truck means you have complete ownership over it. You could customize it as you want, or drive any number of miles, without having anyone tell you what you can or cannot do. It gives you complete freedom to take care of your truck in the way you deem fit.
• Even though leasing might seem like a lesser cost, in reality, one is having to pay a large sum of money at the end of it. So, if your business can pay that amount, it can be seen as an investment, which you are making towards the company. You end up saving costs in the long run, while paying for it in one go at the beginning.
• Trucks often retain a good amount of resale value as well. Hence, having complete ownership over the vehicle, you can choose to sell it when you no longer require it. This will help you sell it if you require money, or even just do not require the truck anymore.

What are the Advantages of Leasing a Truck in India?

• If you are a small business, then leasing a truck makes the most sense as you do not have to pay a large amount of money and just have to pay the lease money. 
• The maintenance cost for leased trucks often falls under the jurisdiction of the company from which you are leasing the truck. Thus, you do not have to pay for the maintenance of the truck as well. 
• One of the biggest advantages of leasing a truck is that one can also buy or lease other vehicles along with that, as they do not have to pay a hefty amount for owning the truck. 

Realistic Explanation

When Purchasing

For Example : – Cost of Purchasing Mini Truck Bolero Pickup : Approximate 11 Lakhs + Labor Welfare Board Expense  and Tax (Rs 8,000)  + Insurance (Rs 25000) .

Here ,the Cost of Insurance and Taxes you pay in each year. Vehicle maintenance you have to manage

When Renting 

Cost of Renting mini truck:  Minimum duration is 1 Year and per month you have to give approximate Rs 28,000 as rent. Some vehicle owners also ask for caution deposit (refundable) 

In a vehicle leasing arrangement, the leasing company or the vehicle RC Owner typically covers maintenance and other related expenses, and also he supports partially  for additional costs such as taxes and insurance.

Conclusion

Even as both owning and leasing a truck in India have its own advantages and disadvantages, the decision depends on the business model one is following or the goal and aims that they have for their business in the upcoming years. So, buying or leasing a truck – the decision is yours and whatever it be should depend on your subjective reasoning. If you are new to the logistics business, we suggesting to lease a truck at least duration of 1 year. 

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