Fleet Advantage, Fort Lauderdale, Fla., released the second part of its annual benchmarking survey, with topics on procurement and disposal of Class-8 heavy-duty trucks for private fleet and for-hire carriers.
According to the survey, the same number of respondents said they pay for their trucks through cash purchase (34%) as finance through leasing (34%). Equipment acquisition strategies have become a larger area of focus recently, especially with more private fleets and for-hire carriers replacing aging trucks to meet the demand of the economy.
In addition, last year’s corporate tax reform created more incentive for firms to place orders on new trucks. This survey revealed that nearly half of respondents (47%) say the recent tax reform and new lease accounting standards are impacting their lease vs. purchase decision when acquiring new trucks. The change to the corporate tax rate, now at 21%, along with new bonus depreciation rules make leasing more favorable than purchase.
The majority of survey respondents (37%) said they dispose of used equipment through trade-in, followed by wholesale (33%). And, one in four survey respondents (25%) said they are currently receiving below-market value for their used trucks.
“Having access to the right business intelligence, as well as a consultative approach to equipment acquisition can make a world of difference to a company’s bottom line when it comes to equipment disposal,” says Brian Holland, president and CFO. “As evidenced by the heated economy and backlog of truck orders, private fleets and for-hire carriers are more aggressive today in replacing aging trucks. We’re now seeing the effects of having access to this type of business intelligence that is shifting the business philosophy of asset management more toward a lease model.”
The first part of this survey was released in October.