There is a lot to consider when deciding whether to lease or purchase your fleet vehicles. You can start by asking yourself a series of questions to help determine which direction is best for your company.
- What are potential budget constraints?
- If you purchase, how will this affect future investments?
- Would you be in a better position if you save up front or in the long-term?
- Is your fleet a core asset of your business?
- Are there any rules or regulations for your fleet type that prevent you from leasing?
Although there are many questions to ask before deciding whether to lease or purchase, this list can help lead the discussion. Fleet is an investment for your business, and it’s important to understand how available funds will be allocated and what that means for the future.
Leasing, purchasing and financing are all viable options when it comes to acquiring fleet vehicles. For some organizations, purchasing vehicles is the best way to invest their cash directly into the business. For other companies that prefer to invest their cash elsewhere, open and closed end lease options can provide a valuable alternative. This will keep your fleet moving with a smaller upfront cost. Before deciding, you should consider:
- The amount of miles the vehicles will be driven
- Regulations for the type of vehicles you need
- Amount of capital available
- Current vehicle replacement strategy
There is no “one-size fits all” answer to the long-standing lease vs. purchase decision. Consider the direction your organization is headed and where your fleet fits in the big picture. Your fleet should be a strategic asset that delivers value to your business. Consider all the options before committing to just one.
To learn more about the lease vs. purchase decision, read our free white paper on capital forecasting.