Everyone knows that buying a car is good for your credit score and leaves you with a vehicle that is 100% yours when the loan is paid.
Most people would agree that it's smarter to buy a car than to lease one. After all, lease payments don't go to finally owning the car. So why, then, is there such a thriving industry in leasing vehicles?
Why would anyone lease a car rather than buying it outright? Why invest in driving a car that you won't eventually own? The answer lies in flexibility. While vehicle ownership is a good thing, it is not always the right choice for each circumstance. There are many reasons why a person or business might lease a car instead of buying it, and the explanations are far more practical than you might expect.
Need a Car for a Short Duration
The single most common reason to lease a car is simply that you need it for a short period of time. Going on a business trip or making temporary travel arrangements sometimes means that you need a vehicle without keeping it forever. Some lease a car when their long-term vehicle is in the shop. Some lease when they travel instead of constantly paying for rides and waiting for Ubers.
Expected to Always Drive the Latest Model
Some jobs require a person to look as sleek and modern as possible. This means driving a shiny new version of the latest vehicle model - every single year. Luxury sales positions, executives, and executive transport services all fall into this category. In this case, the time it takes to pay off a lease on a high-end latest model vehicle is shorter than the time you would be driving the car itself.
When you're expected to trade in and trade up constantly, leasing is often a more practical business expense than buying new car after new car.
Planning to Buy When Budget Permits
Leasing a car in the short-term can also be more budgetable than buying a car. Many individuals and businesses choose to lease while they build up the plan and/or budget to buy vehicles more permanently. A person who has recently moved to a new city without a vehicle, for example, might lease a vehicle until they have saved up enough for a downpayment on the vehicle they eventually plan to buy.
Planning to Upgrade or Expand in the Near Future
Another option is leasing a car while planning for an upcoming upgrade or fleet expansion. A business might lease a few fleet vehicles to fulfill services while drawing up the plans to expand to a much larger and more permanent fleet. Leasing is a great way to tide over between plans or before a larger vehicle plan goes into action.
Trying Vehicle Models Before Purchasing
Buying a vehicle is a big investment, and the buyer should know they're making the right decision. If a person or business doesn't yet know which vehicle is the right choice, leasing gives you a 'try before you buy' experience that lasts longer than a dealership's one-time roll around the block.
With leasing, you can try out a vehicle one or several months at a time, testing it in many typical routes and circumstances. If the vehicle is satisfactory, one of the same model will be bought. If not, you can lease your next candidate for another testing period.
Working From a Temporary Location
Not all business trips are weekend-only. Often, a person will relocate for six months to two years to establish a new business location or train a new team. Some types of businesses will take their team to the client's location for however long each large project lasts. In these circumstances, the relocated business and/or professionals will need personal transportation, but not forever.
It is often more practical to lease a vehicle in 6-12 month periods instead of buying a car locally and worrying about how to get it back home or to the next location.
Offering Temporary Services
Lastly, some businesses give new fleet services a test-run before making them a permanent offering. Let's say your business is expanding into delivery, but you're not sure the service will have enough demand to stick. Or your business will be ferrying execs around for a few months but this is not a permanent service you plan to offer. In these cases, leasing vehicles allows you to offer a temporary service without investing in a permanent fleet.
Here at Wilmar Inc, we know that fleets and vehicle leasing are needed in a wide range of circumstances. We can help you find the perfect single vehicle or fleet for your unique purposes.
Whether you are offering a temporary service, providing transportation for relocated team members, or test-driving candidates for your permanent fleet, we'll connect you with the right vehicle and leasing arrangement. Contact us to discuss your vehicle leasing and fleet building needs.