Archive for January 12, 2012
Leasing versus Buying Cars
Is your fleet in need of revamping? There comes a time when you need new vehicles in your fleet. The question is, how will you make your fleet this time? Will you decide to buy the vehicles with three year loans? Perhaps you want something that seems more opportune for you?
Leasing is a better option in several ways for most businesses. Leasing means you pay a monthly fee for a contract period and then the car or vehicle is returned to the leasing company. Basically, you do not own the vehicle unless you want to. This reduces any disposal problems you may have had previously.
This option also offers other benefits like reduced administration times and costs. You have a set amount you must pay each month for the lease you have on the vehicles. As a part of the set up for the contract you did pay a fee that helped to cover the administration costs. You may also have an interest rate on the contract hire that helps pay for any administration costs during the period of the lease.
You have a contract that will offer you an accurate monthly and yearly budget. One of the hardest things in business is being able to track what expenses you may have. If you have a car loan that is changing or a payment that changes it can be more difficult to pay.
With a lease situation you are certain of the payment amount you will have each month because it is in the contract. At the end of the contract you can renegotiate for a new car and new lease terms. You may be able to reduce your costs with the new terms, but more importantly you did not spend a great deal of money to buy the car and have to dispose of it before obtaining new ones.
There are optional advantages to the concept too. You are able to include a maintenance package. Did you know that maintenance is one of the hardest expenses to track from year to year? You may have information from previous years, but in the next year the vehicle requires something different in addition to the oil changes and mileage maintenance. With lease options you can ensure the maintenance is paid as part of the contract to even out the expenses on a monthly and yearly term, making it possible to budget better.