For decades, Canadian transport companies focused primarily on:
- Monthly payments
- Fuel costs
- Driver availability
- Maintenance and insurance
Depreciation and resale value were often treated as afterthoughts — something to worry about “years down the road.”
That mindset is no longer viable.
Between 2020 and today, the Canadian trucking and fleet industry has experienced:
- Extreme vehicle pricing volatility
- Used truck market booms and corrections
- Global supply chain disruptions
- Emissions technology shifts
- Electrification pressure
- Regulatory overhauls
- Rapid telematics and automation integration
As a result, depreciation curves are no longer predictable — and resale values can fluctuate drastically within short time frames.
For fleets planning 2025–2028 growth, understanding how depreciation and resale interact with leasing strategy is now a critical financial survival skill.
This guide explains:
- How truck depreciation actually works in Canada
- What impacts resale value today
- Why ownership risk is rising
- How leasing shifts depreciation exposure
- How fleet managers can future-proof asset decisions
- What strategic operators are doing differently now
What Is Depreciation in the Context of Fleet Vehicles?
Depreciation is the reduction in value of a truck or fleet vehicle over time due to:
- Age
- Mileage
- Wear and tear
- Technological obsolescence
- Regulatory changes
- Market supply and demand
Traditionally:
- The steepest depreciation occurs in the first 3–5 years
- Heavy-duty vehicles historically retained value longer than passenger vehicles
- Diesel trucks followed relatively predictable resale curves
That predictability has broken down.
Why Depreciation Has Become Unstable in the Canadian Market
Several forces have disrupted traditional depreciation models:
1. Emissions & Environmental Regulations
New engine standards, low-emission zones, and carbon compliance rules can instantly devalue older models that:
- No longer qualify for urban permits
- Require retrofitting
- Face higher carbon exposure
A truck that was market-viable five years ago may now face restricted resale markets.
2. Electrification & Powertrain Transitions
The rapid push toward:
- Electric trucks
- Hybrid fleets
- Hydrogen pilots
has created uncertainty for long-term diesel residual values. Buyers now hesitate on assets that may face regulatory sunset earlier than expected.
3. Technology Obsolescence
Modern trucks now integrate:
- Telematics
- AI-assisted diagnostics
- Predictive maintenance
- Driver safety automation
- Emissions analytics
Older platforms without these features depreciate faster — not because they are broken, but because they are operationally inefficient.
4. Supply Chain Volatility
Vehicle availability cycles now swing sharply:
- Shortages inflate resale
- Oversupply collapses value
Transport firms that timed purchases improperly saw massive paper value swings over just 12–18 months.
What Actually Drives Resale Value in 2025–2028
Today’s resale value is influenced less by age alone and more by:
- Emissions compliance class
- Fuel efficiency ratings
- Total operating cost per kilometre
- Regional regulation compatibility
- Integration with digital fleet systems
- Maintenance records (digitally verifiable)
- Battery health (for EVs)
- Availability of replacement parts
In effect, resale value has become a technology-weighted equation, not just a mileage calculation.
Diesel vs Electric vs Hybrid: Resale Dynamics Are Splitting
Diesel Trucks
Still dominant today—but facing:
- Regulatory risk
- Carbon cost exposure
- Long-term urban restrictions
Resale remains strong in rural and highway markets but weakens in:
- Urban last-mile delivery
- Government contracting
- ESG-driven corporate fleets
Electric Trucks (EV)
High upfront cost but:
- Strong long-term emissions complianc
- Lower maintenance depreciation
- Battery condition becomes the primary resale driver
Early-generation EV trucks may depreciate faster due to battery technology evolution.
Hybrid Fleets
Often serve as transitional assets with:
- Moderate depreciation
- Strong short-term resale
- Medium regulatory runway
Why Ownership Now Carries Higher Residual Risk Than Before
Canadian fleet owners historically assumed:
- Reliable five- to ten-year residual cycles
- Predictable resale liquidity
- Stable secondary markets
Those assumptions are eroding due to:
- Policy unpredictability
- Battery innovation curves
- Supply chain pricing shocks
- Insurance & risk recalibration
- Digital operating requirements
Ownership now exposes transport companies to:
- Residual value collapse
- Forced regulatory obsolescence
- Liquidity traps
- Capital lock-in during downturns
How Leasing Transfers Depreciation Risk Away from Fleets
This is precisely why fleet leasing has become the dominant growth model for transport operators.
Leasing:
- Transfers depreciation risk to the lessor
- Locks in predictable monthly operating costs
- Protects fleet owners from sudden market value collapses
- Preserves capital for expansion
- Enables faster technology refresh
Instead of worrying about what the truck will be worth in 5–7 years, leased operators focus solely on profit per kilometre.
Residual Value Protection Through Leasing Structures
Modern fleet leases now include:
- Pre-set residual values
- End-term buyout flexibility
- Early upgrade windows
- Contract extensions during market disruptions
These mechanisms shield fleets from:
- Depreciation volatility
- Regulatory shifts
- Technology obsolescence
- Battery evolution risk
The Hidden Impact of Resale Risk on Cash Flow
Owned fleets suffer double exposure:
- Falling asset value reduces balance-sheet strength
- Reduced asset equity restricts borrowing capacity
Leased fleets maintain:
- Cleaner cash-flow ratios
- Stronger debt-to-equity profiles
- Easier access to future financing
This matters enormously as financing markets tighten cyclically.
How Depreciation Affects Fleet Insurance & Risk Cost
Insurance companies increasingly price coverage based on:
- Repair cost inflation
- Replacement value volatility
- Theft and fraud exposure
- Fleet age concentration
Older depreciated fleets often face:
- Higher insurance premiums
- Lower claim recoveries
- Increased downtime during repairs
Leasing ensures fleets remain within preferred actuarial risk windows.
The Role of Maintenance Records in Preserving Resale Value
Digitally verifiable maintenance has now become a resale requirement.
Assets with:
- Telematics-logged servicing
- Predictive maintenance logs
- Emissions diagnostics
- Digitally certified repairs
command:
- Higher resale
- Faster liquidation
- Broader buyer markets
Fleet leasing platforms increasingly integrate maintenance into end-of-term asset valuation models.
How Government Policy Now Influences Residual Values
Transport companies must now factor in:
- Low-emission zones
- Municipal fleet mandates
- Government contract sustainability scoring
- Carbon taxation schedules
- Incentive qualification thresholds
Policy shifts can instantly reshape:
- Which vehicle classes hold value
- Which secondary markets disappear
- Which assets gain priority funding
Leasing allows fleets to rotate compliance risk off the balance sheet.
When Buying Still Makes Sense for Certain Fleets
Ownership still works best when:
- Vehicles operate in low-regulation rural zones
- Long-haul duty cycles dominate
- Asset technology is stable
- Emissions risk exposure is low
- Maintenance infrastructure is fully internal
- Capital reserves exceed opportunity cost returns
Even then, hybrid strategies now dominate:
- Core routes leased
- Specialty long-haul owned
- Seasonal contracts serviced by rentals
Leasing vs Ownership: Depreciation Exposure Comparison
| Factor | Ownership | Leasing |
| Depreciation Risk | Fully yours | Transferred |
| Resale Market Volatility | High | None |
| Regulatory Obsolescence | Direct exposure | Shielded |
| Balance Sheet Impact | Heavy | Light |
| Upgrade Flexibility | Low | High |
| Battery Risk (EV) | Full | Limited |
Depreciation Planning Is Now Strategy — Not Accounting
In 2025–2028, depreciation planning drives:
- Fleet acquisition strategy
- Regulatory compliance
- Carbon exposure control
- Technology refresh cycles
- Financing eligibility
- Market positioning
The most competitive fleets treat depreciation not as an accounting rule — but as a core strategic design variable.
Common Fleet Depreciation Mistakes to Avoid
- Holding assets too long in fast-changing regulatory zones
- Ignoring emissions compliance in resale planning
- Overestimating diesel residual strength
- Buying EV fleets outright without battery lifecycle modeling
- Neglecting digital maintenance documentation
- Assuming resale markets will “always be there”
How Smart Fleets Are Using Leasing to Future-Proof Resale Risk
Leading Canadian fleets now:
- Lease 60–80% of core vehicles
- Reserve ownership for specialty assets
- Rotate fleets every 3–5 years
- Bundle EVs with charging infrastructure
- Lock in pre-set residual values
- Use sale-leasebacks on aging owned assets
- Maintain resale diversification across regions
The 2025–2028 Outlook for Fleet Depreciation in Canada
Expect:
- Continued EV resale volatility during technology normalization
- Tighter policy enforcement in metro regions
- Carbon pricing adjustments affecting diesel valuation
- Growing value of digitally verifiable maintenance
- Strong resale for compliant hybrid fleets
- Greater lender scrutiny on residual projections
Fleets that do not adapt will face:
- Sudden asset liquidation losses
- Restricted financing access
- Insurance cost escalation
- Regulatory downtime
Frequently Asked Questions (FAQs)
Does leasing completely eliminate depreciation risk?
Yes. The lessor carries resale and residual value risk during the lease term.
Are EV trucks harder to resell than diesel trucks?
Resale depends on battery health, platform generation, and regional compliance rules. Early EV platforms may depreciate faster.
Can I refinance an owned truck through a sale-leaseback to remove depreciation risk?
Yes. Sale-leaseback converts owned assets into leased operating equipment while unlocking capital.
Does digital maintenance history really affect resale?
Yes. Digitally verified service records now significantly improve resale pricing and liquidity.
Is depreciation worse during high inflation?
Yes. Replacement cost inflation can temporarily inflate used values — followed by sharp corrections.
Final Takeaway for Canadian Transport Companies
Depreciation is no longer a background calculation — it is now a front-line strategic risk.
Between:
- Regulatory volatility
- Electrification pressure
- Technology obsolescence
- Carbon cost exposure
- Market pricing swings
Ownership risk has increased dramatically.
Fleet leasing converts that uncertainty into:
- Predictable monthly costs
- Compliance flexibility
- Technology agility
- Balance-sheet protection
- Stronger long-term scalability
Call to Action (CTA)
If your transport company is planning fleet expansion, EV transition, or depreciation-risk reduction between 2025–2028, the right leasing strategy can immediately protect your bottom line.
Sandhu & Sran Leasing & Financing helps Canadian fleets:
- Structure truck & fleet leasing with residual protection
- Execute sale-leasebacks on owned vehicles
- Transition from diesel to EV or hybrid fleets
- Bundle trucks, trailers & charging infrastructure into one approval
- Maintain cash flow through volatile depreciation cycles
- Secure approvals even with changing credit profiles
👉 Build your future-proof fleet strategy today:
https://www.sandhusranleasing.com
