Should a Business Purchase or Lease Their Commercial Vehicles?
When your business experiences rapid growth, you might require a fleet of vehicles to keep your operation thriving. Perhaps it’s to make deliveries, visit customers, or attend off-site meetings.
All of this considered, new car sales are admittedly plunging, but does this apply to the corporate arena? No matter their trade or industry, businesses often face the same, burning question: Should they purchase or lease their commercial vehicles? We’ll provide some answers below.
Purchase
While leasing does come with its benefits, purchasing can be the more reliable, if expensive, option. This is because a HPI check can often be included by your chosen dealer, gifting every company that uses them with a full rundown of their chosen vehicles history. How many owners has it had? Has it ever been used illegally? Is it wanted or stolen? All of these questions can be answered with a HPI check.
Of course, there is the argument that, upon purchase, corporate cars are now but a depreciating asset. They’re losing value and withering away whether they’re used or not used and are extremely costly to maintain. Once fuel costs and repairs are thrown into the mix, as well as multiple cars for multiple owners, all the funds being directed into the vehicles could perhaps be better invested elsewhere in the firm.
Lease
While not incurring full ownership, leasing certainly provides wiggle room for the budding company that’s flexible with their finances. Any firm going this route can expect access to the latest quality cars and all the tech that comes with them: rear view cameras, blind spot sensors, top of the line sat nav, and more. What’s more, this is all done at a reasonable cost, without depleting a company of its own resources.
Flexible agreements can also be made in terms of ending deals, such as if a business can no longer afford the contracts or changes its aims. This is highly beneficial, as it doesn’t lock any company into recurring costs. There’ll be far fewer safety and maintenance costs too, meaning the leaser or a professional repair service on their behalf will swoop in to solve any issues with the cars and their faults components.
In the end, the decision on whether or not to buy or lease comes down to the business’s own objectives, resources and preferences. For the company that has the funds to spare, purchasing their own fleet is likely in their best interests. However, for the SME or business that’s looking for cost effective solutions with limited funds, leasing is the clear way forward.
This is a collaboration piece with CAP HPI.
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