In most minds, there are two options for acquiring a vehicle. You can either buy one with the help of a long-term loan or you can rent one temporarily for a few days. However, in the business world, there is a third option, one that may be far more practical for your circumstances than either buying or short-term renting.
Vehicle leasing lies somewhere in between the two, essentially a way to rent a very nice vehicle for as long as you need it. But the question is: Is leasing worth it?
How Vehicle Leasing Works
Vehicle leasing is a special arrangement that allows a business or individual to take and use a car regularly as if it were their own. It is kept in the customer's garage and used every day as if it were an owned vehicle, with a single caveat that you not damage it or make any permanent alterations.
Each month, a lease payment is made which allows you to keep holding onto the car and when you're done with the vehicle, it is returned to the owner and payments will stop. It's as simple as that.
Leasing a vehicle is very much like deciding to rent a home instead of buying one. And while most people acknowledge that owning your own home is the ideal situation, there are dozens of circumstances where having a temporary rental is a better solution. In the same way, leasing can offer opportunities for vehicle use that might not otherwise be available.
Like a Trade-In With Less Paperwork
So when is leasing worth it? One of the primary reasons people and businesses decide to lease vehicles is when they plan to trade-in and trade-up in a relatively short cycle. Buying a car, even for businesses, is expected to take several years of loan payments.
However, if you need the latest vehicle models for function or brand image, you are likely to trade your original vehicles in for new ones before the loan period is over. When this happens, you cycle the first loan into a new loan and start making payments, once again with a plan to trade-up in a year or two.
So essentially, you are taking a shiny new car and sending monthly payments for the privilege of driving it for personal or business use. And When you're done with that car, you will give it back and stop paying the initial loan in return for monthly payments on a newer vehicle.
Now ask yourself: How is this different from leasing the latest vehicles from a fleet manager? The only answer is paperwork. It requires a lot more paperwork to symbolically by the cars and then trade out your loans. Instead, you could be working with a simple rental contract that can be easily updated when you're ready to trade your current vehicles for the latest models.
Maintenance and Care
Of course, the other big difference between buying and trading in vs leasing is how the vehicles are maintained and cared for. Dealerships will often offer some kind of discount service to recent customers, but ultimately the maintenance responsibility is yours.
With vehicle leasing, however, the long term quality of the vehicle is the responsibility of your leasing company as long as you take good day-to-day care of the vehicle. A leasing company is usually happy to take their vehicles back temporarily for a full check-up and tune-up so you're always driving well-maintained vehicles at little to no additional expense and no worries about where to go with maintenance concerns.
Is Leasing Worth It?
The vehicle needs of each individual and business are unique. Only you can decide if vehicle leasing is worth it for your budget and logistics.
However, if you want to always have access to the latest vehicles and quality maintenance service without the hassle of constantly buying and trading in privately owned vehicles, leasing is the perfect solution with much less paperwork and credit burden connected to each vehicle.
For more information about vehicle leasing and what we can do for you, contact us today!