What is the best way to build a fleet for your business? Putting together the right fleet can be done in several different ways. Before you purchase your fleet, it's important to weigh your options. It is not always necessary to buy your vehicles outright. The alternative is to rent the vehicles you need for exactly as long as you need them. The right choice, to buy or rent, depends on your fleet's available fund,s budget, and your long-term plans as a vehicle owner.
With these options, you can build a fleet that most efficiently meets the needs of your business. Factors like cash flow, upgrade cycle, and customization all play a role. Should you lease your fleet on a yearly basis or buy the vehicles needed to operate the mobile elements of your business? Let's explore the pros and cons of your two options.
Leasing/Renting Your Fleet Vehicles
Renting your fleet is typically called leasing. Each vehicle is leased temporarily on a one-year or multi-year contract with a leasing provider. Leasing has a lot of advantages, but you are also not the permanent owner of the vehicle. This can be a pro or a con, depending on your business model. Leasing is generally favored by businesses that would rather calculate a flat monthly or annual fee rather than invest in the long-term ownership and maintenance of a fleet of vehicles.
Pros
- Steady and predictable cost
- Update your vehicles on a regular basis
- Often includes maintenance services with the provider
- Business relationship with the provider
- Access to additional services
Cons
- Vehicles cannot be resold to recoup value
- Limited ability to modify vehicles
- May come with usage limitations
Buying Your Fleet Vehicles
Many brands prefer to buy their vehicles outright and enjoy the benefits of full ownership. This is a larger investment and requires greater commitment to fleet maintenance, but also comes with the advantage of full control over your fleet once it is assembled. This option is favored by brands with the ability to invest and a long view on both financial and logistical business strategy.
Pros
- Complete control over the vehicles
- Unlimited modification capacity
- Full possession of value and profits from resale
- Independent vehicle operation
- Enjoy the benefits of a vehicle's full lifespan with good care
Cons
- Larger initial investment or loan creation
- Responsibility for maintenance
- Consideration of value depreciation over time
Considerations When Buying or Leasing Your Fleet
Is leasing or buying a fleet better for your business? This is an important question to ask when it comes time to build or to update your company's vehicle fleet. There are a few important considerations to look over as you weigh your options.
Available Cash Flow
Buying vehicle requires good credit and/or deep pockets. However, many businesses - especially startups and small businesses - calculate their revenue on a monthly to yearly basis instead. Leasing a vehicle is far easier to budget for, while buying vehicles requires savings or a business vehicle loan to achieve.
Desired Modifications
Understandably, you can only modify a leased vehicle so much. If you want to fully re-kit the dashboard and integral tech of your business vehicles, buying is the ideal option for full control. While decals and non-permanent upgrades re acceptable for leased vehicles, permanent modifications likely are not.
Need for Lastest-Model Vehicles vs Workhorses
Fleets that need to stay stylish and impress guests/execs with the latest models benefit from leasing. This makes it easy to turn in vehicles and get the new releases every 1-3 years. However, if you're building a fleet of workhorse trucks and vans, buying vehicles and optimizing their performance is more ideal.
Capacity for Internal Maintenance
Some businesses have their own vehicle bays and mechanics already on-staff. If so, you can take good care of your privately owned vehicles and extend their lifespan with good care. However, brands that do not have the capacity for internal maintenance may benefit more from a service deal provided to leased vehicles.
Desire for Independence vs Service Contracts
Lastly, the core principles of a business can shape whether leasing or buying fleet vehicles is desirable. The more independent-minded the business, the more buying is the ideal option. If your business enjoys a good service contract with a vendor, leasing may be more appealing.
Lease Or Purchase Your Fleet with Wilmar Inc
The good news is that you can cultivate a positive business relationship with fleet experts whether you choose to buy or lease. At Wilmar Inc, we pride ourselves on building effective fleets for clients and provididing valuable services, whether you choose to buy or lease the vehicles that your fleet needs. Contact us today to learn more and to scope out the best vehicles and deals to build your fleet to perfection.
