According to Safegrapgh, over 6,410 trailer rental sites exist in the United States. But, deciding whether to rent or buy one can be daunting because both options have pros and cons.
Buying a trailer is convenient if you intend to use it frequently long term. You can also rent it out to make extra cash on the side. On the other hand, renting is the best choice when you only need the trailer for a limited time.
Buying or renting are great choices. But they all have drawbacks! Settling on either depends on your personal preference and convenience. We’ve put together this guide to help you make an informed decision if you’re looking to rent a trailer.
So, let’s get to it!
What are the Different Types of Trailers?
There are several types of trailers designed for a particular use. Below is the quick rundown!
- Lowboy trailer–used to transport heavy construction, industrial, and aggregate equipment.
- Dump trailer–used to transport abrasive aggregate equipment.
- Dry van trailer–used to transport dry goods.
- Reefer trailer–used to transport temperature-controlled goods.
- Tanker trailer–used to transport oil.
- Walking floor trailer–used to transport soil, mulch, or refuse.
- Flatbed trailer–used to transport building materials.
Pros of Buying a Trailer
Whether you own a trailer for commercial or personal use, a trailer is an asset. Below are the benefits of buying a trailer!
1. Capital Investment
Buying a trailer is a capital investment, especially when intending to put it into commercial use. It’s a hard asset that you can add to your portfolio and someday flip. This isn’t possible if you only rent the trailer for a limited time.
2. Return on Investment
Investing in a trailer is a wise decision because of the almost guaranteed return on investment. Trailers are always on-demand and you can rent out yours for a profit. This isn’t possible when you only rent the trailer because you have to take it back to the owner.
3. No Hidden fees
Buying a trailer is a straightforward transaction, unlike renting, which is characterized by hidden fees. Generally, rental trailers will have terms and conditions you must comply with. While some are open regarding their fees, others have hidden fees. Typical hidden fees when renting a trailer are late fees and wear and tear.
4. Total Access
When you buy a trailer, you’ll always have it whenever you need it. You don’t have to make special requests or sign contract agreements to use the trailer. All you have to do is fuel it and get to your business. This isn’t a privilege you have when renting.
5. Freedom of Use
While there are several types of trailers for a specific use, you can put your trailer to any reasonable use. You have the flexibility as the owner and can go anywhere or transport whatever you want. You can also rent it, convert it for another use, use it as loan collateral or sell it as you seem fit.
6. Tax Benefit
The main tax benefit from buying a trailer is depreciation. According to the IRS, depreciation is an annual income tax deduction allowing you to recover the cost of a property over time. In this case, the property is your trailer.
It allows you to recover the initial purchase and maintenance costs. You can claim the tax deduction once or spread it over several years. Unfortunately, you don’t have such a tax advantage when renting a trailer.
Cons of Buying a Trailer
While the benefits of buying a trailer are plenty, it’s not a good idea to overlook the cons. Below is a quick rundown of the cons of buying a trailer!
- You require more capital; buying a trailer is a high capital investment. According to the Camper Report, a new trailer costs between $11,000 and $35,000.
- Maintenance cost is on you; owning a trailer means servicing it regularly because you can’t pass the responsibility to another person.
Pros of Renting a Trailer
Renting goes a long way, especially if you intend to use the trailer for a limited time. Below is the breakdown of the benefits of renting a trailer.
1. Convenient for Short-term use
As we’ve already seen, buying a new trailer requires more capital. It is not a good idea to spend over 11 grand to buy a trailer when you don’t use it frequently. Instead, it’s best to rent one whenever you need it to save money and other associated costs.
2. No Parking or Storage Constrains
Trailers are huge and take significant space. You need a lot of space to park or store one on your premise, especially when you own it permanently. But this can be daunting when you don’t have adequate room. This is where renting comes in handy. You only need to pick it up from the rental company, use it, and take it back.
3. Low to Zero Maintenance Cost
You may have zero or little obligation to maintain the trailer depending on the renting terms. Often, trailer rental companies keep their trailers well serviced. So customers have no obligation to service the trailers unless the terms bind you. This is a stress-free way to operate a trailer.
Cons of Renting a Trailer
Despite the benefits of renting a trailer, there are cons to be wary of. Below is the quick rundown!
- You’re bound by the rental company’s terms of service, which you must abide by.
- You can’t flip the trailer for profit.
- You have limited tax benefits.
Buying or renting a trailer has advantages and disadvantages. If you’re looking to acquire a trailer for convenient long-term use and have the money, buying would be the best choice. On the other hand, renting goes a long way if you only want the trailer for a short period.
The Neighbors Trailer has your back if you’re looking to rent a trailer based on your situation. We’re a peer-to-peer online marketplace dealing in various types of trailers. So, be sure to contact us for inquiries!