A residential HVAC and plumbing company · About $30M revenue; 110 techs across 3 branches
A Novare engagement. The client's name is withheld.
Should we buy or lease the next 20 trucks?
The answer Buy 14 for the branches that will keep them five years. Lease 6 for the new branch.
- ≈$390Ksaved over five years
- 14 buy · 6 leasethe split we landed on
- Month 22when buying pulls ahead
A Novare engagement. The client's name is withheld.
The question
The company was growing and needed 20 more trucks. The leasing rep had a quote ready. The bank offered a loan. The owner wanted to know which one actually costs less, and what happens if growth slows.
- Leasing is easy, but the monthly bill never ends.
- Buying needs about $756K of cash up front.
- One of the branches is new. Nobody knows yet how busy it will get.
What we looked at
We put both options side by side for five years, month by month, and stress-tested the answer.
- Leasing cost about $1,400 a truck a month. Buying cost $54K, plus about $400 a month for repairs, insurance and the cost of the cash.
- Buying starts behind, because shelving and racks don’t come back at resale. From month 22, buying wins and the gap keeps growing.
- So the real question was how long each truck would stay in service.
Labels are generic to keep the client anonymous.
What we built
A buy-vs-lease model
Month-by-month cost for each option: payments, repairs, insurance, the cost of the cash and resale.
Three cases
Base, upside and downside volume for each branch, with the breakeven month and the most cash it ties up.
A stress test
What happens if resale drops, repairs climb or trucks retire early.
A cash check
The purchase run through the 13-week cash plan, so it never squeezes payroll.
| If this happens | Does buying still win? |
|---|---|
| Resale value 30% lower | Yes, by about $300K |
| Repairs run 50% higher | Yes, by about $310K |
| Trucks leave the fleet after 1 year | No. Buying costs about $90K more. |
| New branch misses volume by 30% | No. Lease there. |
Labels are generic to keep the client anonymous.
The answer and the money
Buy the 14 trucks for the established branches, where they will run five years or more. Lease the 6 for the new branch, so they can go back if volume falls short. That saves about $390K over five years compared with leasing all 14, and keeps the risk where it belongs.
| Lease (the quote) | Buy (the decision) | Result | |
|---|---|---|---|
| Cost per truck | About $1,400 a month | $54K, plus about $400 a month | Buying starts behind, then pulls ahead in month 22 |
| Cash up front | — | About $756K | Fits the 13-week cash plan |
| Five-year saving, after resale | — | About $390K | ≈$390K saved |
Same trucks on the road. The money stays in the business instead of in the lease.
The work behind this story
Systems involved: The 13-week cash plan. Inputs: the lease quote and the bank’s loan offer.
A Novare engagement. The client's name is withheld. Results vary by business. One company's results are not a forecast for another.
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