When it comes time to lease vehicles for your Houston business, there are many factors to consider such as budget realities and tax implications. However, the type of commercial leasing used can also affect costs, such as closed-end leasing, open-end leasing, or capital leasing.
While some businesses may be familiar with different types of leasing, others might not know the differences between them. Today, we will discuss these various types of commercial leasing so you can determine which one best fits your needs! For all your Houston fleet leasing needs, contact our team at Glesby Marks now.
Open-end Commercial Vehicle Leasing
Open-end commercial vehicle leasing is a flexible leasing solution that allows businesses to lease vehicles for their operations without worrying about mileage limitations. This leasing option is ideal for businesses that require heavy use of their fleet. With open-end leasing, businesses can customize their leases to fit their specific needs and adjust their mileage limits as needed, giving them more control over their expenses.
However, this flexibility comes with a higher cost of ownership. With this type of leasing, you are responsible for the vehicle’s residual value at the end of the lease period. If there is a difference between the residual value and the vehicle’s actual market value, you are required to pay it. Typically, the depreciation amount is determined in advance, when the lease agreement is first created.
Both parties also generally agree to a minimum lease term. This type of lease is commonly used for longer durations, such as three to five years, and is preferred by companies that need vehicles for an extended period.
Closed-end Fleet Leasing in Houston
Closed-end commercial vehicle leasing is a type of leasing agreement where the lessee returns the vehicle to the leasing company at the end of the term, without any further financial obligations. This type of leasing is ideal for businesses that want predictable budgeting because the monthly payments are fixed.
One big advantage of closed-end leasing is that the businesses do not have to worry about the depreciation of the vehicle, which can save a lot of money in the long run. On the downside, the mileage allowance can be very restrictive, and any excess mileage will come with hefty penalties.
Additionally, modifying or customizing the vehicle is not allowed in most cases, which can be a disadvantage for businesses that require specific modifications. While closed-end commercial vehicle leasing may not be perfect, it is often a smart choice if you want to reduce the risk of unexpected expenses.
Capital Leasing Vehicles for Your Business
For businesses that rely heavily on transportation, acquiring commercial vehicles can be a significant investment. Capital leasing is a financing option that allows businesses to lease, rather than purchase, their fleet of vehicles. With a capital lease, a company can use the vehicle for a set period of time and ultimately take ownership of it at the end of the lease term. This makes it a good option for businesses looking for a long-term fleet solution.
Additionally, capital leasing can offer significant tax benefits and flexible payment options, making it a popular choice for businesses of all sizes. By alleviating the financial burden of buying and maintaining a fleet, capital leasing can help businesses stay efficient, competitive, and ultimately, profitable.
Flexible Houston Fleet Leasing Solutions from Glesby Marks
Glesby Marks can provide flexible, customizable fleet leasing for your business, and make sure that your account is always handled quickly and professionally. Let us handle the work of getting your fleet up and running so you can focus on your business. Contact us today to start laying down the foundation of your future fleet success!