Photo by Hillary Ehlen
You’re an expert in your industry. That’s why you became an entrepreneur. But, you don’t know anything about corporate structure, tax filings, loans, HR or the thousands of other minutiae you deal with every day.
At Fargo INC, we want to help businesses grow. That’s why we found 10 business owners and executives and asked them for their toughest business questions. We then paired them up with an expert in that industry. Here are your questions answered.
Executive Vice President of FF Fisher
General Manager of Meridian Seeds
What are the financial benefits of leasing company fleet vehicles versus purchasing them?
There are significant financial and practical advantages for businesses to lease their vehicles in preference to purchasing them.
Improved Cash Flow: Leasing typically requires a smaller down payment that helps a company keep more of its cash to manage its core business activities.
Greater Flexibility: At the end of the lease, you can purchase the vehicle, turn it in or release it for an additional term – it’s all about how your lease can be structured and tailored to your situation.
Increased Vehicle Management Support: Leasing professionals can help with acquiring the right vehicles, at the right prices, with the right options and can assist with titling and registration, fuel management, maintenance management and vehicle remarketing. This reduces your costs of ownership and saves your company time. For some companies, it’s just not practical to employ full-time staff for vehicle management.
Improved Image: Having newer fleet vehicles improves your image and employee morale. Cycling the vehicles with a fleet leasing professional lowers your costs of ownership and downtime. Fleet vehicles are often the face of the company and newer vehicles that are cycled can showcase your success. Minimize your costs and maximize your quality.
Greater Access to Vehicles: We can acquire vehicles from across the country and can access all makes and vehicle types and the up fits required for your unique business. We’re not locked into a specific brand.
Funding Stability for Your Fleet: With lease structures, instead of relying on capital funding to purchase your vehicles, leasing allows using operating expense funding. With purchasing, replacing fleet vehicles requires comparing the costs of the current unit to the replacement. With leasing, replacements are easy since they automatically occur at the end of the lease period.
Disposal Support: With purchased vehicles, disposal can be a burden with many moving parts, coordination, time and effort. Leasing eliminates these issues for the fleet. Also, we have processes for early terminations of the vehicles if it’s necessary. It’s really easy.
Remember, your company is unique and you deserve the highest level of customer service provided. Your goals, budget and size are important and the right leasing partner can help you save time and money. Leasing eliminates the need for a one-time significant cash outlay. Leasing is “pay as you go.” Purchase is “pay before you go.” Leasing will result in your vehicle replacement occurring in a timely manner, reduced downtime, greater reliability and lower maintenance costs. Purchasing can significantly increase your fleet management time, create less predictable vehicle replacement and requires a lot of capital. This will increase your overall cost of ownership because you will exceed your optimal lifecycle replacement.