Being a business-owner is all about decision making, from large-scale considerations to the small but often significant details that can drive commercial growth. Your ability to make informed and time-sensitive decisions will therefore have a definitive impact on your success as an entrepreneur, while it will also be the determining factor in minimising costs, optimising efficiency and maximising profits.
Commercial Leasing vs. Buying: The Key Considerations for your Fleet
One of the biggest decisions you will make as a business-owner (or at least one who delivers goods and services to the general public) is whether or not to lease your buy your commercial fleet. Wile the latter gives you access to a permanent selection of functional vehicles, for example, the former offers a more flexible model that offers distinct advantages. So, lets look at the key considerations when making your choice: –
1. Cost
In terms of cost, you must choose the option that suits your business model and cash flow. While buying vehicles will require an up-front financial commitment, for example, when you lease you need only make agreed monthly repayments for a typical period of between two and four years. Conversely, leasing is slightly more expensive in comparison, meaning that your ultimate choice must be determined by your budget and the nature of your businesses turnover. It is important that you calculate these numbers in detail, however, and use them to inform your final decision.
On a final note, the rise of second-hand dealerships such as Shelbourne Motors has made it easier than ever to source commercial vehicles for less, so this is also something to keep in mind when making your choice.
2. The Burden (or benefits) of Ownership
The key difference between leasing and buying revolves around ownership, but this is something can be viewed in numerous, alternative lights. While you may see a purchased vehicle as a valuable asset that affords you greater flexibility, for example, others consider it to be something that continually depreciates in value and burdens their businesses balance sheets. Your choice will therefore be influenced by your outlook, and whether or not you see ownership as a benefit or a financial burden.
3. What do you get for your Investment?
If we consider both funding options as investments, it is also important to determine precisely what you get from each one. The primary benefit of leasing is that it includes all scheduled and unexpected maintenance costs, for example, which can help your business to save huge amounts of money on an annual basis. In contrast, buyers must have a contingency that takes into account the cost of repairs and services, so once again it depends on your business philosophy and cash flow circumstances.
