When making the decision whether to buy or lease for your company’s fleet, there are many factors to consider. There are short and long-term benefits, and we will walk you through some of the main differences between the two options.
Basically, leasing a vehicle means that you only pay for the portion of the car or truck that you use, where buying a vehicle means that you pay for the entire cost of the vehicle regardless. Purchasing can provide your business with valuable assets. However, unless your company is cash rich and can afford to buy without financing them, you will pay a higher monthly payment than you would if you were to lease. By leasing, since you are able to spend less each month, your capital can be utilized elsewhere to grow your business.
Depending what you select for a lease, as there are different types of leases, you earn different financial benefits for your company. With the operating lease, you can obtain tax benefits by deducting 100% of your lease payments from your income statement. Or, you can claim depreciation and deduct the interest expense from your lease payments under a capital lease.
Incentives & Discounts
Of course, you can strike a deal at a dealer on occasion. However, when partnering with a fleet management partner, you can be sure that you will always find discounts and incentives due to relationships built with the auto manufacturers, buying power leverage based on volume, and other negotiated services that save you both time and money.
When owning your fleet vehicles, you run the risk of the vehicles looking poor if you are unable to maintain them. And when leasing your fleet, you can keep your employees in the latest models. Additionally, your drivers do not benefit from the newest technologies – including better navigation, communication and safety features when relying on older vehicles.
If you choose to own your fleet, you are in charge of the maintenance on your vehicles, which can cost you valuable time and money. When leasing, leave the maintenance headaches to your fleet management partner, and costs are often low as well as included in your lease – sometimes at predictable fixed costs. Not to mention, leasing newer vehicles reduces the amount of maintenance issues that otherwise fall on an older and aging fleet that you own.
When leasing from a reliable fleet management partner, you can benefit from many other services – from maintenance and roadside assistance, to driver safety training and insurance coverage. Not to mention with the right fleet management partner, you will find customer service supporting you and your drivers and saving you valuable time. When owning your vehicles, you are in charge of the analysis of the vast amounts of data involved in fleet management, controlling your vehicle inventory, consolidating invoices and costs, as well as sourcing insurance and other services that help keep your fleet running.
For more information on the cost differences between leasing and buying, contact us today at 866.653.2737 or click here, and we can help you make the right decision for your fleet.