UnionLeasing.com presents a unique advantage that comes with leasing: it allows you “to only pay for the usage of a vehicle, rather than accruing depreciation.” This is a better choice for companies that “cycle through their vehicles for a short period of time.”
There are also tax benefits that can be tapped when you lease rather than own your fleet vehicle — it is considered an operating expense that can be “written off your bottom line,” also there is the “flexibility of paying rental tax over time vs upfront sales tax in rental tax states.”
Apart from that, leasing affords you a consistent low monthly payment and no upfront fees. This allows you a certain amount of freedom to invest on other things instead of operating expenses.
“If your company frequently needs new vehicles and benefits from flexible cash flow, leasing is the way to go,” UnionLeasing.com advises.
Leasing is best for sales and service men because they constantly need nice cars and usually have a high vehicle turnover rate (under 5 years).
In its Fleet Leasing vs Buying Comparison Guide, Ewaldfleetsolutions.com elaborates on the advantages of leasing fleet vehicles:
- Financial life equals useful life.
- A leasing program provides the discipline to enforce standards and reduce vehicle acquisition costs and administrative costs.
- Replacing leased vehicles is cost-effective and simple.
- A fleet leasing program eliminates excess.
- Lessor assumes disposal responsibility, maximizing returns with automotive expense.
- Low monthly lease fee
- Leasing allows cash flow flexibility
- Vehicles are cycled under a carefully planned program, reducing maintenance expenses, improving corporate image and driver morale.
- Off-balance sheet financing and creative financial structures.
- Leasing is flexible.
“Every company has its own unique needs when it comes to vehicle management. Understanding the benefits of both leasing and owning will help you find the right solution to the needs of your business,” UnionLeasing further recommends.
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