Are you looking to lease a fleet of vehicles for business use? If so, a commercial fleet lease company can help. Below, you will find an overview of what fleet lease companies do and why they can be a great option for businesses. Keep reading to learn about the key benefits of leasing vehicles through a fleet leasing company.
What Is a Commercial Fleet Lease Company?
A commercial fleet lease company specializes in leasing vehicles to businesses and organizations. These companies can help businesses save money on the costs of ownership and the operation of vehicles.
Fleet lease companies can also provide businesses with a wide variety of services and support programs. If you’re looking for a new way to reduce the cost of your businesses vehicle fleet, a fleet lease company might be a good option for you.
How Do Fleet Leases Work?
Fleet vehicle leasing is when a company leases a number of vehicles that are used by employees for business purposes. Typical vehicles include cars and trucks.
In fleet leasing, the lessee is the business that leases the fleet vehicles. After choosing a fleet leasing company, the lessee selects the number of cars they need, as well as the models of those cars, at which point they will then define the ideal leasing time as well as a budget.
The fleet leasing company can recommend vehicles for the fleet and offer discounts or other benefits, depending on the number and types of cars rented. The leasing service is formalized by way of a contract that can last for either a few months or even years.
This service is different from car rentals, which can be done by everyday people who can rent cars on a daily basis. On the other hand, businesses typically lease a fleet of vehicles for a longer period, paying on a monthly basis. With this type of service, the contracting party counts on built-in services, such as vehicle maintenance and insurance.
Important Advantages of Commercial Fleet Leasing
Commercial fleet leasing provides many advantages for businesses that need high-quality and updated vehicles. Here are a few advantages of commercia fleet leasing.
Reduces Acquisition Costs
With fleet leasing, business owners can eliminate the cost of acquiring a fleet of vehicles and all supporting expenses, like maintenance. Instead, the fleet leasing company will take care of bureaucratic issues and associated costs. This way, the business that is leasing the vehicles can focus on core activities instead of figuring out how to buy vehicles.
Leaves Repairs and Maintenance To the Leasing Company
When a company hires a fleet leasing service, the responsibility of repairing the vehicles lies with the leasing company. After all, the cars belong to the leasing company as it is. In the event of any problem with a vehicle, the fleet leasing company can offer a replacement.
Ensures That Vehicles are Always Up To Date
When you hire fleets from reliable companies, they will provide you with new vehicles, which usually have a maximum of 5 years of use. Take advantage of vehicles with newer technology.
Types of Fleet Leases
Not all leasing is the same, and when it is put into practice, the leasing services can be structured very differently. There are two main types of commercial fleet leasing, including open end leases and closed end leases. The differences lie mainly in the flexibility of the two types of leases.
Open End Lease
Leasing provides flexibility that vehicle ownership cannot offer. For instance, with open end leases, the term of the leasing contract is not fixed at the beginning. As such, it is easy for the lessee to extend the lease if needed.
However, open-ended leases come with some drawbacks. For instance, many companies don’t want to take responsibility for vehicle repairs or maintenance after the initial term expires. This could mean they will purchase additional insurance coverage.
Another downside is that open end leases often include a terminal rental adjustment provision (TRAC), which requires the company leasing the vehicle to ensure the vehicle’s defined resale value. If the actual resale price is lower than the defined value, then the lessee must cover the difference.
Closed End Lease
On the other hand, a closed end lease comes with a fixed rate and a term that is usually anywhere between 12 to 48 months. Also known as a walkaway lease, the lessee has no obligation to purchase the leased asset at the end of the agreement.
The leasing company is responsible for any additional depreciation to the vehicle below the remaining value at the end of the lease. A closed-end lease can be a good option if you don’t plan on driving more than the mileage limit and you want to avoid any risk of owing money at the end of the lease.
How a Fleet Lease Company Supports Businesses
Businesses that purchase several vehicles at once frequently choose fleet leasing as an alternative. Saving money and streamlining the vehicle sourcing process are two main goals of commercial fleet leasing. In essence, commercial fleet leasing saves businesses the trouble of having to lease each vehicle individually and pay retail costs as well.
Fleet Management and Maintenance Support
Many companies operate fleets of vehicles because there is money to be made. But running a fleet requires you to do much more than just buy equipment and rent out vehicles.
You have to consider a number of responsibilities, including insurance, fuel costs, vehicle maintenance and regulatory requirements. In fact, many trucking companies have lost their licenses over poor documentation, improper records and failure to follow proper procedures.
This is why it is important to hire professionals who can handle these issues for you. A good commercial fleet lease company will provide you with the maintenance, repairs, regulatory compliance and fleet management services you need to ensure that your fleet runs smoothly.
Flexible Leasing Options
Instead of being boxed into the ownership of a fleet of vehicles, a flexible leasing option is a helpful solution for companies that are in need of commercial vehicles. Flexible leasing also allows the size and the type of fleet to be adapted to the actual real-time needs of each business.
Specialized Vehicles
The fleet leasing company examines the operational needs of your company with you. Perhaps your business needs different types of vehicles. If that’s the case, the company can help you determine which vehicles are necessary as well as which ones will be most efficient for each individual activity.
Hassle Free Financing
Commercial fleet leasing companies are an easier option, especially compared to traditional banks for vehicle leases, namely because fleet leasing companies provide their customers with the option of customized financing terms. Experienced commercial fleet leasing companies can help you build your fleet affordably.
Lease Your Fleet For Flexibility
Your business may need fleet vehicles for various reasons, whether it’s to visit clients or make deliveries. However, buying a fleet of vehicles can be expensive, not to mention a situation that could lock you into dealing with both maintenance and management responsibilities.
With commercial fleet leasing companies, you can lease fleet vehicles with ease, making them a viable solution for businesses. Gain flexibility and access to financing through commercial fleet vehicle leasing.
FAQ
Vehicle fleet leasing is the act of leasing a motor vehicle for business-related purposes.
You can find a lender to finance your fleet when you buy vehicles outright or lease them.
Fleet vehicle leasing requires a lower level of investment than buying vehicles yourself. You can also avoid maintenance costs and the worries associated with owning vehicles that could eventually depreciate.
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