By Kingbee Rentals
March 13, 2023
Fleet buying is like twerking, it requires balance and flexibility. When vehicles aren’t available through traditional avenues, or when cash flow is tight, flexible rentals maximize fleet utilization and keep everything running smoothly.
To Stay Proactive, Not Reactive
It is very unlikely you will be able to purchase vehicles in a timely manner. Wait times for allocation start at 8 months, making it very difficult to accurately forecast costs. If you overestimate demand, a big chunk of capital will be tied up in depreciating assets that aren’t contributing to revenue.
On the other hand, long-term rentals give you the freedom to return your vehicles when they are no longer needed. The right rental company can supplement your fleet by 10-20%, so you don’t miss out on revenue while you plan for a more long-term solution.
If You’re Broke in the Sheets but Need Vans in the Fleet
Scaling a commercial fleet is one of the most difficult things anybody can undertake, especially when cash flow is “tighter than a gnat’s ass” [sic]. If you fail to deliver on time, customers will find viable alternatives. If you don’t deliver enough, you could bleed thousands in cash every day.
Most fleets finance their vehicles through a combination of leasing and renting. This requires an extremely accurate projection of growth and enough leverage to take on more debt. Renting gives you the flexibility to take chances without catastrophic financial consequences.
When Growth Is a Struggle
Purchasing vehicles adds debt to the balance sheet, which reduces the amount you can borrow. In any business, leveraging debt is a huge part of the growth equation. If borrowing capacity is limited, then it makes sense to leverage debt for things that don’t have alternatives, like utilities and payroll.
Flexible rental contracts keep your fleet running. Work-ready rentals give you the capacity to carry on business as usual while sidestepping the total cost of ownership with vans that are wrapped with your company’s branding and upfitted with shelves and racks.
When Cash flow Is Plugged
The ideal situation for a fleet manager is where costs are at their lowest and the fleet is operating with minimal downtime. This requires a perfect balance between projected expenses and maintenance costs. Order too many vehicles, and an underutilized fleet could depreciate rapidly. Don’t order enough and you could miss out on revenue. A flexible contract allows you to avoid unnecessary depreciation or downtime expenses by being proactive instead of reactive.
Renter? I Barely Know Her
When flexibility and speed are a priority, or when vehicles are simply not available, Kingbee provides a work-ready van rental solution. We upfit, wrap, and deliver work ready vans to any job site and we have hundreds available right now.
