Choosing to lease before buying your company’s vehicle fleet is common for most companies. However, this two-way difference raises some important questions. What are the benefits of leasing? Is it economical? Can you save a lot by leasing instead of buying a vehicle? Whether you have a small or large business, one of the biggest expenses is always the cost of your fleets.
Whether you buy or lease, this can be a long-term financial commitment for your business. You need to make sure you make the right decision and do not get caught up in the buying frenzy.
- You can control your costs: If you choose to buy, you are responsible for all costs associated with the maintenance and repair of the vehicle. But with leasing, in some cases, the contract may include that you will not be responsible for the maintenance of the car, which saves you 10-20% in costs.
- You can change model quickly: You have been stuck with the standard model for several years when you buy a vehicle. However, a typical average term is three years when you lease, which means you can get a whole fleet of new models after a few years.
- It’s More Hands Off: Managing an entire vehicle fleet can be challenging, especially if you buy it. You have to take care of everything from license and tag renewal, payment for retention of title, paying taxes and so on. But when a vehicle is leased, you are not the owner, so the company that owns them does all this.
- More control over vehicle selection: When you buy a vehicle, you are limited by your budget. Due to these budget constraints, you can not get exclusive or more luxurious vehicles. But that is not the case with leasing. You can choose the type of vehicle you want and have the entire fleet delivered in a few days.
- Ownership: This is where buying a fleet is more lucrative for those who want to own the vehicles. Leasing does not give you the advantage of owning the asset. You must continue to pay as long as you lease the cars. If you own the fleet, you will at some point pay off the car loan and completely own the cars without paying anything again.
Over to you:
Although it may seem more lucrative to buy the vehicle fleet, it really is not because the cars get old and start to break down often over time. If you replace them, you will have to pay a lot more to get the latest models. Leasing gives you more flexibility so that you can replace the entire fleet in a few years without paying out huge sums of money.
However, keep in mind that whether you are buying or leasing your fleet, you still need to buy car insurance, so be sure to keep this cost in mind as well. If you want affordable coverage options for your vehicle fleet, please contact Paradiso Insurance at 860-453-0116.