As a fleet manager, finding the right fleet vehicles to transport your goods is hard enough – then comes the question “should I lease or buy?” Both options have their advantages, but in the end, it all depends on your money situation. Here are some other things to consider when it comes to leasing or buying:
Leasing
When you lease your fleet vehicles, you pay to use them instead of own them. If you decide to lease, you usually have the option of an open-end lease or a closed-end lease. When you sign an open-end lease, you usually get use of the vehicle for one year. After the year is up, you then pay month-to-month.
A closed-end lease, on the other hand, means you’ll have the vehicle for an extended period of time, such as three years. Closed-end leases usually come with a limit on mileage and a limit on “wear and tear.”
Pros
Less management: When you own a vehicle, you have to manage elements like license and tag renewals, titles, personal property taxes, and more.
Fund preservation: Leasing lets you keep the majority of your business’s funds (whether it be capital or your own investment) and credit lines in-tact.
No need to sell: When it comes time for you to upgrade your fleet vehicles (or if you no longer need them), you won’t have to worry about selling them. Instead, you can simply return them to the lessor.
Owning
When you own your vehicles, you usually pay an amount for the vehicles themselves and then various fees for titles, tags, and taxes. After that, the vehicles are yours to do what you want to with.
Pros
Possible profit: When it comes time to sell the fleet vehicles, a lessor would sell them in bulk, but by owning the vehicles, you have the option of selling them individually. If sold right, you could gain a profit.
Fewer restrictions: Owning your fleet vehicles means you don’t have to worry about paying a fee if you go over the mileage restriction or if “wear and tear” occurs.
Price negotiation: Buying your vehicles in bulk means you can usually bargain for a good price from the fleet dealer.
No matter which option you decide to choose, the next step for your new fleet vehicles should be fleet fuel cards from Fuel Express. Find out why!
