16 Jan The Different Types of Commercial Vehicle Leases
For many businesses to be successful they need to be equipped with a fleet of stable and reliable vehicles. Nowadays, purchasing commercial vehicles is not a feasible option as they are costlier and don’t offer as many benefits as leasing, hence why most commercial businesses tend to choose this option.
Here at Corporate Fleet Services, we offer several leasing, purchase, and management options, but in the automotive world there are various types of commercial vehicle lease programs that are available for businesses.
For a business that’s new to the world of leasing fleets, we want to educate you a bit on some of the lease option terminology you may hear. Here a few:
1. Capital Leasing
Capital leases are known as long-term leases for business equipment. In these leases, the piece of equipment, or vehicle in this event, is considered an asset under the respected business. In light of this, it offers businesses different benefits and downsides. The benefit of this commercial vehicle lease is that businesses are seen as the owners. However, this is still considered a loan. So, given the nature of this commercial vehicle lease option, the value of vehicle will depreciate.
2. Operating Leases
Operating leases are a completely different form of commercial vehicle leasing. These loans are typically short-term and more formally known as service leases. Typically, businesses will not open an operating lease for a car; however, it’s still an option that is available. With this commercial vehicle lease, businesses do not take ownership over the equipment, or vehicle. Another significant different between operating leases and capital leasing is that this commercial vehicle lease provides businesses with the option of bargain purchasing. In other words, if a business decides to purchase the vehicle outright, they can under this lease.
3. Commercial Vehicle Line of Credit
Businesses may also find commercial vehicle lines of credit more beneficial than typical commercial vehicle lease programs. Commercial vehicle lines of credit are great for business owners looking to establish a fleet and lease multiple vehicles. However, this option may limit companies to the type of vehicles they may lease.
Commercial Vehicle Lease as an Investment
Before you are quick to pick just any commercial vehicle lease option, it’s important to view this decision as a financial investment.
At our company, we provide the options of indirect leasing, as well as open, closed, and custom leases.
In a closed lease option, we handle any of the car’s depreciation issues, along with other perks, and with an open-end lease you can control how much mileage you receive on the vehicle. We can also customize a lease to fit your needs.
If you would like to explore your lease options with us, contact us today.