What is Fleet Leasing?
Fleet leasing is when a company leases a number of vehicles for their employees to use.
This can be for business only vehicles or to use in their company car schemes.
Leasing is becoming an increasingly popular choice for businesses as it offers employees the opportunity to drive a new model every few years and comes with a whole range of financial benefits for the company.
Why Choose Fleet Leasing?
There are a number of reasons that you might decide leasing is the best option for your company’s fleet.
- It’s convenient.
- It offers flexibility – you can select the model, lease length and mileage that is best for each of your drivers.
- It’s cost effective – there are a number of savings you can make with leasing, from lower initial payments through to claiming VAT back.
- The fixed monthly cost makes it easier to manage budgets.
- All lease vehicles are brand new, which means not only do they look great but will come with the manufacturer’s warranty and if the lease is under three years you won’t need to worry about MOTs.
- Your business won’t own the vehicles so there’s no worry over vehicle value depreciating or stress over having to sell them when they're no longer required.
- If you add a maintenance package to the lease the cost of servicing and maintenance will be covered, and your drivers will have just one number to call with any queries. Take a look at our maintenance section below for more details.
Other Things to Consider:
There are many benefits to leasing a vehicle but there are a number of other factors that you will want to consider when deciding if leasing is right for your fleet.
A lease vehicle will need to be returned at the end of the lease and if its condition is not in line with the BVRLA’s fair wear and tear guidelines then there may be a charge.
A lease has a set contractual mileage allowance and if the vehicle is returned with more miles on the clock than expected there will also be a charge for this. If you realise partway through the contract that you are likely to go over the contracted mileage on a particular vehicle you can request a quote for amending the mileage allowance but this would also change the monthly rental cost as well.
If you opt for non-maintained leases, then it would be the business’ responsibility to maintain and service each vehicle in line with the manufacturer and funder’s guidelines.
If you have a large fleet of vehicles for your business then it can be quite time consuming to manage them so you might want to look at a fleet management service which can handle this for you. Our parent company Wessex Fleet offer a fleet management system, you can take a look at all of the services they can offer here.
There are a number of different options that you can choose from to supply your fleet vehicles.
The main two leasing options for businesses are a contract hire agreement and a finance leasing agreement.
A contract hire agreement is a form of long-term rental where the business leases a vehicle for a set period of time with an agreed annual mileage.
This is the main type of business lease that Car Lease Special Offers can offer your business.
The vehicle will not show on your balance sheet as it is not an asset owned by the business.
Unlike with a contract hire agreement a finance lease has the option to purchase the vehicle at the end of the set contract.
The full cost of the vehicle, including interest charges, may be spread over the duration of the contract or you can choose to have lower monthly payments and one balloon payment at the end of the lease.
Vehicles under a finance lease may show on your balance sheet as an asset depending on the agreement.
An alternative to leasing for your fleet is outright purchase. This is where the business buys the vehicle, paying for it upfront.
With an outright purchase the vehicle shows as an asset on the balance books.
Owning the vehicle comes with different responsibilities to leasing. The business will be responsible for servicing and maintaining the vehicle, taxing it and ensuring the vehicle is fit for purpose.
If you no longer require the vehicle it will also be up to the business to sell, and depending on the condition and age the vehicle depreciation may mean the business loses money.
As part of a lease agreement you have the option to include a maintenance package.
Most packages cover servicing, maintenance work and MOTs that are needed for the duration of the lease.
They will usually also include repairing or replacing tyres.
The specifics of what is included in your maintenance package depends on the funder but if you would like a general overview of what is included before making your decision you can take a look at our guide here.
With a maintenance package you will not need to worry about arranging any servicing or required maintenance as the funder will make all of the arrangements once you have contacted them, which is easy to do with their one-stop phone numbers.
You can even give the driver the contact number so they can discuss any servicing or maintenance requirements directly with the funder.
Fleet Management Services:
Depending on how large your fleet is you might want to look at a management service. This can take the stress out of having to manage new, returning and maintenance of vehicles for the business.
You can take a look at the services our parent company Wessex Fleet offer as part of their fleet management here.
End of the Lease:
With a lease vehicle you will need to get in touch with us towards the end of the lease so that we can arrange collection for you by the end of your contract.
You can see a full guide on what to do at the end of your lease here, or you can simply give us a call and we can go through the process over the phone with you.
Please note that the vehicle will need to be returned in a condition that is in line with the BVRLA’s fair wear and tear guidelines. This includes removing any signwriting that you may have applied to the car.