Paying for equipment outright is usually unrealistic and unaffordable, and with restrictions by traditional finance lenders on limited trading history, equipment age or mileage, many transport company owners see the outward convenience of traditional truck hire as their only option.
However when this method is relied on for more than a few weeks, the cost becomes exorbitant, specific equipment availability is uncertain and there is no opportunity for ownership.
GoGetta Business Leader Caleb Gunn said GoGetta’s rent-to-own funding costs are 35-100% cheaper, with one year of rental equivalent to only 20 weeks of hire.
“Equipment ownership is extremely important for our customers; they know what equipment they want long-term but they can’t afford to pay for it outright. GoGetta’s rent-to-own funding model allows them to claim 100% tax deductibility and build equity in the asset with each payment,” he said.
Earl De Cruze, owner of Earl Cruze Transport, said he saved a lot of money when he made the switch from traditional hiring to GoGetta’s Rent-Grow-Own solution.
“I was looking at trucks and the dealer was advertising GoGetta’s Rent-Grow-Own, which had all these options for my business – it was pretty flexible – and meant I would not have to invest lots of money up front.
“The $25,000 truck I got through GoGetta was decent, with low kilometres. I’m paying GoGetta $288 a week for it in rent. For the previous six months, I had been hiring a similar truck from a well-known truck hire company for $330 a week – five days, not seven. It was dead money,” he said.
Rent-to-Own: GoGetta buys the equipment on your behalf and rents it to you. You make regular rental payments and have a number of options, including purchasing or returning the equipment.
Hire: The equipment hire company owns the equipment and you hire it from them for as little as an hour or several months. You return it when you’ve finished using it.
The similarities between renting-to-own and hiring include:
NO OR MINIMAL CAPITAL OUTLAY: Neither renting-to-own nor hiring requires a large capital outlay, helping you preserve your cash flow: the single most important factor to your business’ survival
TAX DEDUCTIONS: Rental payments and hire fees are operating expenses, which are 100% tax deductable.
‘OFF BALANCE SHEET’: Rental payments and hire fees do not appear as a liability or debt on your balance sheet. In other words, your ability to borrow more money is unaffected.
QUICK & EASY APPLICATION: Depending on availability, you can get your hands on hire equipment within 24 hours. Similarly, a rent-to-own agreement can be processed within a day and the equipment delivered within a week.
TRY BEFORE YOU BUY: Hiring allows you to try equipment before deciding whether to buy it. GoGetta’s rent-to-own funding solution allows you to try equipment and, if it’s not entirely suitable, return it to GoGetta after 12 months without penalties.
How do the costs of rent-to-own and traditional hire compare?
The whitepaper compares the similarities, differences, and most importantly, the costs of four commonly used pieces of equipment through GoGetta’s unique funding solution against quotes from five leading Australian truck hire companies. These include:
- 2 tonne light duty truck
- 5 tonne medium duty truck
- 8 tonne medium duty truck
- Heavy duty prime mover truck