In today’s episode, we will be discussing buying vs. leasing, but more specifically, the advantages of leasing from Penske. As stated in previous episodes, we believe leasing is the best option, especially with small and mid-size fleets, because it offers a fixed cost.
To help you make this decision for yourself, we have been able to get a complete booklet from Penske in Miami. This booklet contains all of the information on leasing and options.
We will provide this information to you so that you can evaluate whether leasing from Penske is the right fit for you.
Demand For New Trucks is Very High
Looking at SONAR® which is a platform we are big fans of, we can see that class A vehicle sales, which are heavy-duty rigs, is at a three-year high.
That means that lots of people are expanding their fleets. The question is whether this is sustainable growth or we are at a peak that is about to crash.
Currently, most people in the market are feeling very bullish. If you are looking to add to your fleet, you need to consider what option is best for you.
Buying vs. Leasing
The advantage of owning a vehicle is that it becomes an asset that you can sell later on. However, it is our opinion that when running a trucking business, you should be spending all of your time and energy maximizing compliance and service.
Trying to run a used truck business on top of that can be very difficult. It is our strong recommendation that you lease. When leasing, you have two main options, Ryder and Penske.
Today we are looking at why Penske feels that they are the best option in this space. Penske’s main value proposition is advanced technology.
Among these technologies are adaptive cruise control, collision warning, active driver assistance, lane departure warning, lane-keeping assistance, automatic emergency braking, and blindspot monitoring.
Having these features on your trucks will help you get a lower insurance premium. That is because not only will you be operating brand new vehicles, but you have oodles of safety features that will make it less likely that your drivers get in an accident.
As we have said before, the hardest part of getting involved in trucking is managing to get a competitive insurance rate. Getting a rate below the national average is the ultimate goal.
The way to achieve this is by having good compliance standards and reliable equipment. Penske’s trucks will give you an additional layer of safety resulting in fewer accidents and higher reliability.
Both Penske and Ryder are excellent at providing sub-units in the event of a breakdown. When running trucks, every driver has to do pre-trip inspections and, especially in cold climates, warm up their trucks before starting.
Ryder and Penske can both provide you with analytics so you can make sure that your drivers are warming their trucks up and completing proper inspections before they start driving for the day.
On top of that, Penske provides a comprehensive online platform that allows you to look at vehicle analytics and provide a pivoted approach to vehicle maintenance.
The Penske representative we spoke with was Eduardo Rodriguez his contact info will be provided. We are not being paid by Penske. We asked Penske to come on the show and their marketing team would not allow it.
We are not advocating that you go with Penske as opposed to Ryder, we will flesh out both at a later date. We are just focusing on the value that Penske provides on today’s episode to help you make an informed decision.
Full Lease Program
Penske offers a full lease program that includes all maintenance. Unlike owning and managing your own vehicles, both Ryder and Penske have tech-based systems through their back office to alert you when maintenance is needed.
For example, the three-month oil change is done through their respective platforms. That enables you to keep your vehicles under warranty as long as possible. That is especially important as manufacturers will not cover issues if you do not have proof of preventative maintenance.
Penske at a Glance
Penske was founded in 1969 by Robert Penske. Today, they have over 1,100 locations, 80,000 associates, and 300,000 vehicles. They work with Caterpillar, Great Dane Trailers, freight liner, Volvo, international, trail mobile, Hino trucks, and more.
Picking the Right Truck for You and Your Drivers
We recommend when picking your trucks that you look at what drivers in your area are familiar with. In the Florida market, especially among Hispanic drivers, Volvo is the most popular. That is for features like increased comfort, tighter turn radius, and general driver friendliness.
Then you have companies like Freightliner, which may not be as driver-friendly, but the parts are much easier to get. That is as a result of their sizable national distribution network. Both are great options.
The Value of Predictable Costs
You need to look at the advantages of predictable costs. If you are a vehicle owner and you suffer a breakdown, not only do you see a large cost spike, but you have to go looking for maintenance in that area. Providers in different states charge vastly different amounts, and as such, your cost will not even be consistent between breakdowns. Penske and Ryder offer consistent costs per mile on top of the base lease and take care of broken-down trucks for you.
They also have tremendous buying power, which allows them to negotiate deals with mechanics in advance across the country. On top of that, because both companies will provide you with a subunit while yours is in the shop, you cannot beat them on downtime.
Penske will also provide you a direct account executive who will speak to you to give you industry knowledge and help you predict the market to better plan growth opportunities.
Lower Upfront and Other Costs Through Leasing
With a lease program, your only upfront cost is the security deposit and the first month. When dealing with conventional financing, you could have a 5-7% interest rate on top of a 20% down payment on each truck. That can be orders of magnitude higher than the starting cost on a lease. A full-service lease from Penske includes a wide array of services.
These include: vehicle specking and acquisition, vehicle financing, preventative maintenance, engine fluid analysis, component repair and replacement, tire maintenance programs at a discount, 24/7 emergency road service, subunits, driver incentive programs, vehicle washing, skilled maintenance technicians, and vehicle towing. If you are trying to maximize your KPI and customer satisfaction, a full-service lease is almost always the way to go.
Fleet Insight from Penske
Penske offers a solid tool for managing your vehicles and maintenance programs called Fleet Insight. It is available online or via the iOS and Android app. It provides you with everything you need to keep your trucks in good standing. It has a very robust and easy-to-use UI. It gives you updates on roadside assistance, total repair orders, maintenance billing and allows driver registration.
You are also able to schedule maintenance and contact roadside assistance for any of your drivers. You can access vehicle information from functionality to compliance to fuel data all in one place and export everything in PDF or spreadsheet format to add to your existing database.
The Freight Guru
Download the PDFs mentioned
Safety Systems Vehicle Technology – https://thefreightguru.io/wp-content/uploads/2021/04/Safety-Systems-Vehicle-Technology.pdf
Penske Full Service Lease – https://thefreightguru.io/wp-content/uploads/2021/04/Penske-Full-Service-Lease.pdf
Maintenance Technology – https://thefreightguru.io/wp-content/uploads/2021/04/Maintenance-Technology.pdf
Digital Fleet Tools Technology – https://thefreightguru.io/wp-content/uploads/2021/04/Digital-Fleet-Tools-Technology.pdf
Connected Fleet Technology – https://thefreightguru.io/wp-content/uploads/2021/04/Connected-Fleet-Technology.pdf
Recommended Logistics and Trucking companies:
LTL Services – https://goltl.io
Hazmat Services – https://gohazmat.io
TMS – https://mytruckhub.com
Logistics Services – https://go-freight.io
Fulfillment – https://gosunship.io
Warehousing – https://gowarehouse.io