When the busy season for ISP contractors hits, it hits hard! As an ISP contractor, one of the worst situations that can occur is having a delivery step van break down mid-route during the holiday craziness. This causes so many stresses and inconveniences – from late deliveries, coordinating a rental step van or truck, additional rental fees, repair fees, etc, that could be prevented. A solution that many MAG Trucks customers have found advantageous for their business success is the importance of supplemental vehicles for ISP fleets. Let’s explore this issue in further detail.
The cost of rental or lease step vans and trucks can add up extremely quickly. In addition, lease or rental vehicles may not be ready or available when you need them. When you are placed in a situation of dire need and the cost is unexpected, things can become very costly very quickly. When ISP contractors operate with supplemental vehicles within their ISP fleets, there are many advantages to this business procedure.
- Section 179
ISP Contractors are able to take advantage of the new Section 179 tax deduction. Section 179 is a substantial deduction that allows businesses to deduct the full cost of qualifying equipment. This huge tax savings can make a difference to your bottom line at the end of the year! Qualifying equipment (vehicles, step vans, trucks) must be purchased and placed into service by midnight on December 31, 2018. For more information, visit Section179.org.More on Section 179: Section 179 of the IRS tax code allows businesses to deduct the full purchase price of qualifying equipment and/or software purchased or financed during the tax year. That means that if you buy (or lease) a piece of qualifying equipment, you can deduct the FULL PURCHASE PRICE from your gross income. It’s an incentive created by the U.S. government to encourage businesses to buy equipment and invest in themselves. Businesses have used Section 179 to purchase needed equipment right now, instead of waiting. For most small businesses, the entire cost of qualifying equipment can be written-off on the 2018 tax return (up to $1,000,000).
The unforeseen expenses of a step van needing repairs is something that cannot be budgeted for. However, the purchase of a supplemental step van or truck can be included in a budget, which ultimately reduces the amount of unknown expenses. When purchasing a new or used step van, the pricing is transparent. You know what you’ll pay for that vehicle, so it’s very cut and dried. The repairs needed on your route truck may not be clear cut, nor is the timeline of repair or loss of service time. You are essentially at the mercy of the repair company.
- Growth Opportunities
The purchase of supplemental vehicles allows ISP contractors to be prepared and ready for growth opportunities. The ability to have an ISP certified step van in your fleet makes the business decision to expand or purchase new routes much easier. The expense for the supplemental vehicle is already budgeted for and purchased, so that is one less factor when deciding on expanding your business.
- Section 179
MAG Trucks has over 40 new and used route-ready step vans on their lot at all times. From P500 to P1200, gas or diesel, one of the top benefits of purchasing step vans from MAG is the convenience of ordering a step van and having it delivered or picked up within 7-10 days. MAG is one of the select upfitters that will arrange for shipment of the step van to you across the country. This reduces down-time, especially when peak season hits and you cannot afford to have any of your vehicles out of commission.
Another benefit of MAG Trucks is being able to offer in-house financing options. The application process at MAG is very easy, and quick. The finance options can be utilized for all supplemental vehicles as well. So get started here!
MAG Trucks and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.