A fleet lease is an agreement between a company and the fleet owner. The company pays to use the fleet of vehicles for a specified period of time. It's actually quite similar to renting a passenger car as a private citizen. A fleet vehicle is one that is owned or leased by a company and is often used by employees in the performance of their work tasks.
For example, it may be necessary for a salesperson to have a fleet of vehicles to visit contacts and customers to generate sales for their company. A fleet leasing vehicle is a vehicle owned by a leasing company and leased to a company as part of its fleet (group) of vehicles. Fleet leasing allows a company to use several vehicles during a fixed lease period with monthly payments. Here's what a fleet leasing company entails and how it can help your business, along with four basic characteristics you should consider when choosing a company.
When you arrange a fleet lease, you'll pay for the use of those vehicles for an agreed period. This allows you to purchase the vehicles you need without having to make a long-term commitment to a leasing company. If you're looking for the lowest cost when it comes to vehicles and plan to upgrade them frequently, automotive fleet leasing companies are what you need. Fleet vehicles are often used by workers who require a significant amount of travel during a workday, such as salespeople.
Business owners are often faced with the decision to obtain a fleet lease or purchase them outright. Permanent leases are ideal for companies that need the vehicles they are trying to purchase in the short term. In this case, fleet leasing doesn't give you much flexibility before the lease ends. For many companies, the key to determining if the lease or purchase is correct will be to consider whether that additional capital should be invested elsewhere in the business or if it should be invested in vehicle assets.
After that, the contract is extended from month to month if the lessee (the person holding the lease) still needs the vehicle. However, fleet management is still an important part of any company's vehicle system, whether owned or leased. Keep in mind that reliable fleet leasing companies work closely with their vehicle manufacturers, so their vehicles are properly maintained according to the manufacturer's specifications. One of the most advantageous advantages of fleet leasing is the ability to deduct leasing costs from taxes.
However, there are some negative aspects associated with an indefinite lease, the first of which is that, after that initial year, the leasing company is generally no longer responsible for maintenance or repairs.