Leasing: the appeal of a flexibly financed fleet
3rd March 2017
A fleet of vehicles, by definition, isn’t cheap. Knowing how to pay for it realistically, and reliable, is invaluable. Getting it wrong… well, let’s not go there.
So let’s say you need a new company van, truck, or car. Maybe several. The question isn’t who is going to pay for it. It’s how. Should you lease or buy them? Relax, you’re not alone in asking. It’s probably the most common question any business asks itself when searching for a vehicle. The short answer is: it eventually comes down to your current (and projected) financial situation.
There are clear advantages and disadvantages of leasing. If you do choose to lease or finance, there are then four other main options to consider. But they’re covered separately in the latest edition of Fleet Matters.
The first question is whether to lease or not. The advantages of leasing are certainly compelling: fixed, predictable monthly costs and a low (or maybe no) deposit. You may also have the option to upgrade your vehicle, or the agreement itself, depending on what terms you’ve signed. What else? No depreciation to worry about and reselling of the vehicle. You can simply hand it back, there are lower repair and maintenance costs; sometimes none at all.
So why buy your vehicle? First off, those tax deductions can be appealing and if you’re paying in monthly instalments they’ll eventually stop when the vehicle’s been paid for. Insurance costs decrease over time, and there no mileage limits to negotiate.
At the end of the day, there’s an easier decision to make: image. Your fleet vehicle is a representation of your company. A fleet comprising vehicles of varying quality, age, doesn’t often broadcast a desired message to the world.
It may, at heart, be a shallow decision. But often for businesses, it’s well worth it.
Read more about it in Fleet Mattersback