Getting a fleet of vehicles for your company involves many things besides deciding between leasing and owning. Once you decide that leasing is the most cost-effective and convenient strategy, you have to figure out which kind of lease is best for your business. When you choose one of the top fleet service companies, they show you a variety of options (as well as many other services). Here are some of the options you may need to consider.
Open-End
Open-end leases can be for as short as one year. After that time period, you can keep the vehicles longer or terminate the lease agreement. You won’t have to pay any penalties. However, the business owner assumes risks at the end of the lease.
If the vehicles sell for less money than their book value, you have to make up the difference. In other words, you could be responsible for some of the depreciation costs. Fleet service companies may recommend that you keep the vehicles longer than one year, as it’s in your own best interests.
Closed-End
Closed-end leases give you more flexibility and fewer risks than open-end leases. For example, you don’t have to pay the difference between book value and selling price at the end of the lease. You also may buy the vehicles after the lease period. You’ll probably have limitations on mileage, and if you exceed the limits, you can pay a stiff penalty. This is an important thing to check out before you finalize an agreement.
Partner Plans
A few fleet service companies offer partner plans for their clients. These plans give you even more options. For example, maintenance payments are fixed, and you don’t have any penalties for early termination. Over and under mileage charges can be adjusted to your needs too.