Purchasing or leasing a business vehicle

Better for the environment
Car emissions are emerging as one area which can effectively be addressed in order for organisations to reduce their business’s impact on the environment.

Companies like Custom Fleet have launched fleet carbon management programs to help their customers reduce car emissions. Custom Fleet’s initiative, Drive Lightly, measures a company’s carbon emissions, looks at ways to reduce those emissions, then implements an offset program for the remaining carbon based on actual fuel consumption. The program gives organisations access to driver training to educate people on techniques to improve fuel efficiency and encourage driver safety. A vehicle selector tool is also available to help organisations choose a vehicle based on elements such as fuel consumption, environmental impact and whole of cost life.

On the downside, leasing agreements mean if companies do want to purchase the vehicle once the leasing period has ended, the cost won’t be determined until that time. This makes financial planning more difficult.

Fleet leasing suits most organisations, but particularly those whose vehicle needs vary. For example, a company with short-term construction contracts only needs vehicles for a finite period of time, making leasing a far simpler choice. Leasing also suits many non-profit organisations who, already pushed for funds, simply don’t have the resources to buy, sell and manage vehicles. It gives these organisations a better handle on their funds – critical in that sector – and because they know in advance what their outgoings are, they can better manage their finances.

PURCHASING

Within some companies and industries there is still a culture of “buying is best”. Although not always the most time and cost effective option, sometimes purchasing vehicles is a better choice for certain organisations. Purchasing your own fleet simply means you source, buy and manage your own vehicles. Obviously there are no fees from a leasing/management company, but every aspect of vehicle management becomes your responsibility.

The advantages of purchasing include:

Vehicle ownership
Purchasing vehicles means you or your company can call that asset your own. Once you no longer need that car, you can do with it what you like, whether that’s selling it, trading it in or giving it to a family member.

Drive with impunity
If you own your vehicle, it’s your choice whether you drive it carefully or really push it to its limits. Certainly, in some industries where vehicles are put through tough conditions, it may pay to purchase in the first place and write the car off as a loss once it has reached its life end.