7 myths about operational leasing

Contrary to past perceptions, operational leasing is specifically tailored to address the challenges faced by small and medium-sized enterprises (SMEs). For instance, companies can utilize vehicles without upfront costs. By avoiding the large investment required to purchase vehicles, businesses can free up financial resources. Additionally, the VAT on the purchase price and associated services can be reclaimed, while the VAT on rental fees is reclaimable proportionally based on use. This makes costs predictable and manageable.

Many business leaders assume that purchasing a vehicle is a one-time expense and cheaper in the long term compared to paying monthly rental fees. However, this calculation often overlooks operational costs. When evaluating a vehicle’s total lifetime expenses, it becomes clear that leasing is more economical, covering only the actual usage and operational costs without the risks of reselling a used vehicle afterward. Leasing can leave more room in the company budget over time.

Operational leasing typically involves fixed monthly fees throughout the lease term. Choosing local currency financing with fixed interest rates eliminates risks from currency and interest rate fluctuations. Monthly fees usually cover all costs, including taxes, maintenance, and insurance, while the fleet management company assumes operational risks. This makes expenses predictable and manageable throughout the lease term, unlike owning a fleet.

Many underestimate the administrative and financial tasks involved in acquiring corporate vehicles. Calculating lease fees may seem complex at first because they include various components, but the result is clear and transparent. Fleet managers handle all administrative burdens, from tax payments and tire changes to insurance management and replacement cars, allowing businesses to focus on their core activities.

In the past, long-term leasing was as binding as purchasing a vehicle. However, advancements in technology and regulations have introduced more flexibility. Through brand-independent fleet management, businesses can choose any model from any manufacturer. While typical lease terms range from three to five years, agreements can now be as short as one month, enabling companies to test vehicles and assess their suitability.

Many SME managers hesitate to lease vehicles due to fears of contractual risks. What happens if the contract is not suitable, if the small print contains surprises? Who will help if there are complex accounting problems? What to do if the fleet manager still does not take care of unexpected costs?With a properly selected, expert partner, such problems do not arise. Long-term leasing shifts financial risks to the leasing company, sparing businesses from cost fluctuations.

Some people believe that a rented car simply cannot provide the same experience as owning one. However, fleet managers also offer the option of purchasing the car at the current market price at the end of the lease if you do not want to part with it. However, most people do not take advantage of this option, as they enjoy the freedom of always using the most suitable, new car and, if necessary, can easily switch to a car of a higher category and equipment, with the cost of the switch being included in the rental fee of the new car.