For many businesses, vehicles are essential tools of the trade. However, the way companies acquire and manage their fleets can have a significant impact on cash flow, efficiency and long term financial health. For this reason, smart businesses are realising that leasing can offer many advantages.
Amid the current economic uncertainty, businesses need to tighten budgets and control costs, so knowing your spend with regards to vehicles is key.
Many businesses continue to sink capital into vehicle ownership, a decision that often leaves them with depreciating and older assets as well as rising maintenance expenses.
Owning a fleet is more complex than it first appears. A vehicle purchased today begins to lose value the moment it leaves the dealership and within three or four years it may often be worth half (or less) of its purchase price.
This leaves businesses with aging vehicles that are expensive to maintain and difficult to resell.
In addition, purchasing vehicles involves the ongoing burden of servicing, repairs, compliance and time consuming administration tasks, all of which add to the real total cost of vehicle ownership for businesses.
Leasing, by contrast, provides access to modern, reliable vehicles without the burden of upfront capital expenditure. Instead of a large, upfront cash outlay, loans that tie up credit or with a large balloon payment, leasing allows companies to pay for their fleet through a single monthly payment.
At FleetPartners, our fully maintained operating leases bundle most running costs into one payment including exclusive use of vehicles, registrations, servicing, maintenance, tyres and even roadside assistance and accident management.
This option reduces financial surprises while keeping vehicles in top condition.
For many businesses, the appeal of leasing goes beyond cost alone. Outsourcing the hassle of vehicle admin – such as annual registrations, servicing, maintenance and driver support – is another advantage.
Businesses also need to look at the opportunity cost of capital as every dollar invested in buying vehicles outright is a dollar that isn’t available for growth.
Leasing frees up capital that can be used in more productive areas such as hiring staff, investing in new technology or equipment, or expanding operations.
Ownership comes with extra admin, risk and responsibility when compared to leasing, from the cost to manage vehicles by your team internally, taking risk on fluctuating resale values, and paying for unexpected repair and maintenance costs.
Leasing shifts this risk to us, ensuring businesses are not left exposed to market downturns while we help provide safe and compliant vehicles for your drivers.
Leasing is proving to be the smart choice for businesses that want to stay competitive. Instead of being tied down by aging assets, leasing keeps businesses agile, financially sound and always on the move.
FleetPartners helps businesses take the hassle out of managing vehicles – to find out how leasing can work for your business, visit fleetpartners.co.nz.
