The big dilemma of businesses…

Vehicle fleets are a big area of contention for many businesses who are in the logistics, transport or courier industry and even into wider industries that require use of a commercial vehicle. The big dilemma in question is I have extra requirements now so is it worth me buying a vehicle or even leasing one? What if we told you that there was a simple solution to the problem that balances cost with long term commitment. First we will explore what the benefits of leasing or buying a vehicle is, then we will compare that to renting one and the difference between.

Leasing a vehicle and what it means.

At face value leasing a vehicle seems like a fantastic idea, what can go wrong? You have a vehicle, you don’t own it and can exchange it for a new one in a couple of years, you also aren’t paying for the whole vehicle but instead you are paying smaller payments which are much better for cash flow of course. Talking of cash flow, in a lot of cases you are responsible for the mechanical wellbeing and upkeep of the vehicle, which can add extra cost to the mix, especially if you are using a commercial vehicle. There are lots of costs associated with a commercial vehicle that many people do not consider when leasing or purchasing one, with RUCS, COF, Maintenance and different specialist requirements for each vehicle’s costs can quickly add up and the benefit of running a second vehicle can be quickly lost.

Buying a vehicle and what it means.

Buying a vehicle is exactly the same as leasing apart from you have a much bigger financial investment into it. Some people will finance the vehicle and dedicate to a 38 to 60 month payment plan to repay the loan. A lot can happen with business in that time, if the cash flow drops you may not be able to meet the loan obligations, and of course this is a worry with all aspects of business but why have an unnecessary risk? You need to know that this vehicle will get the use and pay itself off during the operation of its life and this isn’t always the case if the vehicle isn’t being used regularly.

Renting a vehicle and what it means.

Renting a vehicle in the beginning can seem like a bit of a rip off or a bit big of a purchase, but when you start to consider the things that are included in that price it becomes a bit clearer that renting can be an absolutely fantastic option for your business. Combining the conveniences of leasing and owning a vehicle but with a much lower risk to cash flow and future profits. Renting a vehicle means that you can pick the vehicle up WHEN you need it and use it as LONG as you need it too. This allows you to grab an additional vehicle as the demand for your service fluctuates. Renting a vehicle means that we as the company will take care of all the extra costs like COF, RUCS and maintenance and regos without you directly paying for it yourself. Sure you pay a little more to get the vehicle than you would on a lease, but your risk and obligation to the vehicle is a lot less.

So what is best for me?

This is a question you can only answer for yourself, but we always recommend starting with renting a vehicle and if that demand seems like its going to continue you could probably think about leasing or even a long term rental. – A long term rental is something that we can offer a bit like leasing but we take care of the hard stuff for you. We never suggest automatically buying a vehicle unless you know its going to be profitable for you. Renting a vehicle is always the best option and carries the least risk, not to mention the flexibility of renting.

So next time you have extra requirement in your fleet, think about what option is best for you, pick up the phone and give us a call because we understand New Zealand business and their requirements. We can cater our service to you and ensure ease of transaction for you and your staff.