Leasing commercial vehicles 'is more effective for businesses'
Thursday 05 January 2012 Back to Blog
Businesses looking to increase their commercial van fleets as their companies expand during the next 12 months may be facing the question of whether to purchase or lease vehicles.
According to senior editor of Cars.com Joe Wiesenfelder, "both options have their pros and cons", with the use of the vehicle often the deciding factor in which is most suitable for an individual.
He explained driving habits, available funds and the amount of miles a van is expected to travel should all be considered when assessing whether to rent a vehicle or buy it.
Small and medium-sized enterprises (SMEs) may find leasing a fleet is more cost effective and practical than purchasing and having to maintain several vehicles.
Mr Wiesenfelder highlighted several benefits of van rental, with regular upgrades to the latest model noted as one way of ensuring peace of mind when it comes to vehicle safety. He commented that drivers will have the reassurance that they are covered by the latest technology and comforts when they get behind the wheel.
It was suggested another positive feature is the affordability of monthly payments, as these are lower than if a van or car has been purchased outright.
"With leasing, you're getting more car for a lower monthly payment," the vehicle specialist stated. He added that leasing a vehicle also prevents companies from "getting stuck in an upside-down loan", whereby they owe more than the mode of transport is worth when they come to sell.
Minimal maintenance may be the most attractive benefit for many SMEs, as repairs can be time-consuming and costly.
"With the exception of a few oil changes and filter replacements, there should be no need for any heavy maintenance," Mr Wiesenfelder remarked. It was also noted that providing fleets have been kept in a good condition - and within mileage limits - there should be no lengthy paperwork once the lease is completed.
Firms planning to lease van fleets were advised by senior consumer advice editor for Edmunds.com Phil Reed in an article for Business Insider to ensure they check the contract terms with regard to mileage. He explained how it is important to know what the limit is, otherwise companies could find themselves penalised for exceeding the annual maximum allowance.
The British Vehicle Rental and Leasing Association (BVRLA) recently explained how new research has revealed UK rental cars and vans are not only safer, but also more cost effective for companies.
A study conducted by Transport for London on behalf of the BVRLA found such vehicles are used more efficiently than the average privately-owned mode of transport.
It was suggested leased vans are often newer and better maintained, as well as being fitted with the most recent safety technology.
BVRLA chief executive John Lewis said: "Coming ... after the RAC told us that the annual cost of motoring had risen by 14 per cent to over £6,600 a year, this research is perfectly timed. It is now clearer than ever that car rental presents a cheaper, safer and more sustainable alternative to car ownership for millions of business and leisure motorists."