Business Leasing vs. Purchase
Many business owners often wonder am I better off to lease vehicles or purchase vehicles for my company needs?
In today’s business environment, in most cases it makes sense to add leased vehicles to your fleet. Leasing gives the business owner more options than a traditional purchase
Better Cash Control
Leases traditionally require much less cash at delivery than a traditional retail purchase. In most cases a retail purchase will require at least a 10-20% down payment which could easily be thousands of dollars. In a lease vehicle, normally the only monies due at delivery would be the first month payment, and the motor vehicle fees.
Shorter Commitments
Unlike retail purchases, a lease is for a specific time period, giving you the ability to adjust the make-up of your fleet needs much quicker than having to worry about the value of your trade in and the balance owed.
With the shorter lease terms, you will not have to worry about repair and or maintenance costs as the vehicle increases in age.
Best Experience
With a leased vehicle, you are driving the vehicle for the best part of its life. In most cases the vehicle is still under the manufacturer’s warranty during the length of the lease. You get the new car experience without the long-term commitment.
Protection Against Loss
With the prices of new vehicles becoming more expensive, a lease gives you a guard against any loss in an accident. Lease vehicles all include gap insurance guaranteeing you if the insurance company does not pay to cover the full balance owed, the gap insurance will cover the difference regardless of what the amount is.
Additionally, if a retail owned vehicle is damaged in an accident and it is repaired by the insurance company in most cases there will be diminished value, as the repaired vehicle will be worth considerably less than the same vehicle that has not been in an accident. Obviously, this would be a major concern at the time of trying to trade this vehicle towards a new one when the value has been lessened by the accident and subsequent repair.
With a leased vehicle, should an accident happen, and repairs are made, you can simply turn in the vehicle at the end of your lease term, with no worries regarding the value as your commitment is over, and any diminished value becomes the concern of the leasing company and not yours.
Written by: Sussman Automotive