Is leasing mainly for big business?

No. Individuals and small fleets can enjoy the same advantages that make it smart for large fleets to lease. Leasing may provide:

  • Low monthly rates.
  • The opportunity for a minimal or no down payment.
  • Simplified expense records for tax purposes.
  • Availability of cash that would otherwise be tied up in a car or truck.

Why do large companies lease? Most frequently they lease to:

  • Turn fixed assets into working capital to be employed in the company's principle business.
  • Convert fleet vehicles from capital items to expense items, thereby removing them from the balance sheet and increasing net worth as well as borrowing power.
  • Cut the paperwork and administrative expenses involved in fleet ownership.
  • Get out of the used car business.
  • Enhance the company image with late-model vehicles.
  • Move fleet management responsibility out of the company and into the hands of specialists.

What kind of vehicles can be leased?

Most makes and models with all available equipment or options. However, a good leasing company will offer advice as to the most practical vehicle(s) for your needs.

What does it cost to lease?

It depends on the kind of vehicle(s) you want and the equipment you desire. Also, it depends on the type and length of the lease and anticipated mileage. The only way to get a dollar and cents answer is to discuss your specific requirements with a reputable leasing representative and let him or her develop an actual rate for you.

Are there mileage limitations on leased vehicles?

Yes, there are usually mileage limitations on both open-and closed-end contracts. One of the factors that determines a lease rate is anticipated mileage. Should the predetermined limitation be exceeded, resale value will probably be less than estimated, and a mileage cost penalty would normally be included. Mileage limitations can be set to meet your requirements.

How about insurance, taxes and licensing?

These costs are the lessee's responsibility and are arranged for and paid directly by the lessee.

How are leased vehicles billed?

Normally per month by invoice or automatic checking account deduction.

Can a lease be cancelled and the vehicle turned in prior to expiration of the contract?

Yes - however, all lease contracts have "premature termination" provisions which determine any additional costs.

What about service on leased vehicles?

Under a typical open- or closed-ended lease contract, the company or individual lessee has the same responsibilities as a purchaser, including full responsibility for all non-warranty repairs and service on the vehicles it leases.

How does leasing differ from renting?

Units acquired by the day, week, or month are normally considered rental vehicles and intended as temporary replacement transportation. Units acquired for a longer period (usually 12 months or more) are normally considered leased vehicles.

What can be done with the car(s) and truck(s) we now own, should we decide to lease?

Most leasing companies will help you dispose of currently owned vehicles.

Why do companies offer lease vehicles to their employees rather than pay mileage allowances for the use of personal vehicles?

The following are the most significant reasons:

  • It eliminates the automobile as a prerequisite for employment, letting a company hire the right person rather than the right car.
  • It provides more equitable reimbursement.
  • It releases employees from the burden of shopping, financing, and replacing vehicles at their own expenses - probably on company time.
  • It assures late-model, dependable transportation which contributes to the company image.
  • It allows standardization of equipment through control of the age and type of vehicle used.
  • It can become a highly tangible fringe benefit, depending on company policy regulating use.
  • It reduces the possibility of inadequate insurance coverage.