Buy or Lease Railcars

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Buying vs Leasing Railcars

Your business is only as strong as your supply chain. Even the best products will fail to dominate the marketplace if you can’t get them to your customers. Which is why transport reliability has never been more important. If you ask those in the know, they’ll tell you that the rail industry is still, quite literally, the engine that drives American trade.

The U.S. was built on the back of railroads, and it’s still one of the most important links in the process of getting goods from A to B quickly, reliably and cost effectively. If you’ve been relying on freight brokers to get your shipments where they need to go, you may have noticed that things have become more volatile in recent years.

When you buy or lease railcars you have absolute control over availability of the fleet; many industries have learned the hard way that when you rely upon the railroad to provide cars you can often be very disappointed when business is booming; just when you need capacity the most. And, if your destinations or business locations change, you are in control.

There’s no guarantee that there will be excess railcars waiting for your shipment when you need them, and freight bottlenecks can further snarl up the works. Which is why many companies who use the U.S. freight rail system consider railcar leases or purchases. Because when you have your own cars waiting for your goods, there’s no chance you’ll be left without a way to get it where it’s going, when you need it to.

Not sure whether to buy or lease railcars? Let’s look at the pros and cons of railcar leases versus purchasing your own fleet.

Railcar Leases

Let’s look at railcar leasing as the first option to ensure you always have the means to get to market. There may be sound business and/or tax reasons to lease your fleet, and this option also makes it easy to change your fleet over time if desired.

The biggest pro of leasing your railcars is lower upfront cost. If you are conserving capital, this is a significant benefit. The cost of leasing may also be offset by tax benefits, which can make this a viable financial choice for many companies.

Lower or no maintenance costs are another big factor. When you lease railcars, they still belong to someone else, so during and after the lease term, you will be free of the cost and headache of routine maintenance.

On the con side of the equation, while you will undoubtedly get value from leasing railcars, you aren’t investing in a tangible asset, and at the end of the lease term, you won’t have a tangible piece of infrastructure to show for your investment.

Purchasing Railcars

When you buy railcars, you have more choice of the railcar types you want to invest in, which you might not have when leasing.

Purchasing railcars costs more upfront, but they are a tangible asset that you can rent or sell at any time to recoup some or all of the value you have put into the investment. You own the railcar and for permanent, long-term use it is always the lowest cost. You can elect to sell cars at any time if conditions or needs change; or run them until they are no longer certified for use.

One of the negatives that you do need to consider when you want to purchase railcars is the lifecycle and maintenance costs of the cars. Since you will be the owner of the cars, you will be solely responsible for keeping them maintained to rail industry standards, and for compliance with any relevant legislation.

How to Find Railcars for Lease or Purchase

If you are looking to purchase railcars, you always have the option of purchasing new, purpose made rolling stock. However, the cost of new railcars is often prohibitively high for smaller companies, and it can take a long time for some railcar types to be made to order. Which will leave you scrambling for solutions while you wait.

Another option is to find a company that has a network of connections and relationships in the rail freight industry, that can connect you with excess railcars.

Often, in the rail industry, companies that do purchase new rolling stock for their rail freight fleet find that they consistently have cars standing in yards, rather than moving freight around the country. Or, for whatever reason, their shipping and freight plans change, and they shift focus from rail transport to a hybrid of road and rail.

In those cases, companies will often choose to sell or lease their fleets, to recoup the cost of the cars, and some or all of their investment. Some companies also routinely sell off high quality used railcars to replace them with new, simply because of their own infrastructure maintenance program.

Rail Car Deals is just such a company. We have established relationships within the rail freight industry throughout the continental U.S. and we leverage that to find the best deals for our customers. We can connect you with companies that are looking to sell or lease one car or many, of all types, sizes, and conditions.

How to Start the Process

If you are interested in purchasing excess rail cars, or you think that railcar leases might suit you better, the time to act is now.

It can take time to find exactly the right stock for your needs, and to negotiate and complete purchase and lease agreements. Then there’s transfer of ownership, if applicable, retagging and more, all of which can delay the process a little more.

The longer you wait, the longer you will spend at the mercy of unreliable freight brokers and railway companies, and the more chance there is that your supply chain will experience delays, cancellations, and worse, spoiled product.

You don’t have to know everything about the rail industry either. We’ve been in the business for a long time, so we don’t only know who to talk to, we know what the best railcar solutions are for any kind of company. So, if you’re not sure what you need, or how much, we can help you to make informed decisions. Then we negotiate a great deal on your behalf, and we’re with you right until the deal is signed, and beyond.

Rail Freight Is Not Going Anywhere

There might be some people that will tell you that rail freight is old fashioned, or that it’s going to go away sometime. But the truth is, the world was built around rail, and it’s still the pulse that drives industry around the world.

When you choose rail, you know you will have a reliable, stable, and dependable means of getting your goods where they’re going. And when you own or lease your own rail cars, you have all the control.

Let Us Help You!

At Rail Car Deals we have long-established partnerships with leading sources across all of North America. At the same time, the specific railcar you are looking for may not always be in the marketplace just when you want it. Additionally, the natural lead time from purchase, to perform re-tagging, any necessary shop time, and delivery to your first load site will easily span weeks. Entering into a lease can also add time to complete the documentation process. As a result, we recommend submitting your search request as far as possible in advance to the date you need the railcars in service.

Please give us a chance to serve you; we always seek to meet your needs on the best terms available. Let us know what your project is and we can help. If you would like to give us a call first, please feel free.

We do the work and contact you!

There is no cost for a custom request and it could not be easier – Just complete the form and “Submit”. Note: If your request applies to more than one car type, please submit the form separately for each.
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