Choosing how to manage your company’s fleet can be a complicated decision. The true cost of buying a fleet can oftentimes extend far past purchases, making understanding the immense value of fleet leasing invaluable. If you’re considering switching to fleet leasing instead of fleet ownership, learning more about how leasing with Glesby Marks can positively impact your company’s bottom line, you will feel more confident and empowered in your decision.
When you’re looking at potentially purchasing a lease, a key consideration is the concept of total cost ownership (TCO) in the United States. This is undeniably a critical metric for your company’s budgeting, as well as a great way to understand the improvement fleet leasing can make for your bottom line.
Understanding Total Cost of Ownership: Why Fleet Leasing is the Best Choice
You may think you know what your company fleet is costing you, but the bottom line of TCO can be sneaky, adding up the mystery costs and maintenance issues around every corner. To find this figure about your exact needs, you have to look past the price of each vehicle and realize that the majority of vehicle ownership comes after you sign on the dotted line. This figure represents the complete, full-scale picture of vehicle ownership in the United States over the entire lifespan of the vehicle. Many businesses miscalculate this figure, contributing to overextended budgets and failure. Miscalculations can be due to a number of factors, including unexpected maintenance, increased fuel usage, or poor route planning.
Componenets of Fleet Leasing
The complete TCO system comprises the following components:
- Initial acquisition: This oftentimes encompasses the purchase price of the vehicle, the down payment, and any interest on your car payment loan.
- Depreciation: Within a car’s lifetime, this is the highest factor when it comes to TCO. The moment a vehicle exits the lot, the depreciation process begins and rapidly escalates.
- Fuel costs: Fuel costs can be a volatile variable. It can be significantly impacted by gas prices in your area, as well as the efforts it takes for your company to track each vehicle’s usage.
- Maintenance and repairs: These can encompass everything from minor concerns like oil changes and tire rotations to full-scale battery or transmission replacements. What makes this component difficult is the unexpected nature of maintenance and repairs.
- Insurance, taxes, and registration: Not only can these be hefty, fixed costs, but they can also contribute largely to your overhead administrative costs. In many cases, navigating large-scale fees like insurance, taxes, and registrations requires a designated skillset to complete accurately.
- Administrative costs: This is one of the biggest factors in your TCO and a reason why fleet leasing can help keep your budget contained. Managing a fleet is a huge time commitment and requires elite knowledge of the industry.
What is Vehicle Depreciation and How Does it Affect Your Fleet
You may be asking yourself, ‘What is vehicle depreciation?’ Depreciation is a non-cash expense that can still have a huge impact on your company’s budget. On average, a vehicle in the United States will face a 30% depreciation of value over the first 2 years that you own it. After that, it will continue to decrease in value by 8-10% annually. For large fleets, this could be detrimental. For many companies with large or specialized fleets, this could easily put you underwater with your loans if you need to replace or expand your fleet.
How Fleet Leasing Can Solve the Issue
If you’re looking to maximize your budget and increase your financial security within your fleet, leasing might be the perfect fit for your company. If you’re unfamiliar with what a fleet lease is, the terms are simple. A vehicle lease for fleets is a contractual agreement where a monthly fee is established to secure the usage of a vehicle for a set time, without the stress of ownership or TCO.
The advantages are vast and can improve both your short-term and long-term financial security in many ways:
- Predictable monthly costs: This is perhaps one of the most impactful factors when it comes to opting for fleet leasing. Unlike vehicle ownership, where there can be massive maintenance fees on any given day, with fleet leasing, you are committed to a fair, monthly cost. This makes it possible for you to budget accurately and far in advance.
- Improved cash flow: Upfront costs when it comes to vehicle ownership have begun to slowly rise, due to tariffs and a rising fear of debt. With a lease, there is no down payment required. This keeps your cash flow steady, predictable, and flexible.
- Access to newer vehicles: At Glesby Marks, we are proud to offer specialized, thorough vehicle acquisition for our clients. If you’re looking for access to the most modern, high-tech vehicles on the market, fleet leasing can not only get them for you, but we can also help you upgrade every 2-4 years.
- Reduced administrative burden: Administration can be brutal when it comes to large leases. By outsourcing this aspect of your company, you can focus on your company’s core mission instead of working on maintaining your vehicles. We don’t just handle the administrative side of the leasing process; we are experts at acquisition, registration, fuel usage tracking, and everything in between.
Increasing Your Operational Efficiency with Fleet Leasing
Our team excels when it comes to fleet management, and helping our clients achieve their fleet leasing goals is our specialty. Not only is fleet leasing more financially economical, but it can also help you increase your company’s overall efficiency.
One way we do this is with our dedicated fleet solutions. We can help you track your team’s fuel usage and route optimization to get the most out of every dollar. Our fuel usage data monitoring technology helps us set spending limits per car, or per driver, in order to cut back on unnecessary spending at gas stations across the United States. Additionally, we can track driver behavior, giving you a full-scale picture of your team and their actions on the road. This not only helps save your money, but it also ensures that your team is operating with maximum safety and efficiency on the road.
Combating Costs With Fleet Leasing: Comparing the Impact
Fleets can serve as two things for your company: an asset or an expense. The biggest difference between leasing and owning your fleet is always the bottom line on your budget and how it impacts your company’s productivity. With Glesby Marks, we understand that every company has vastly different needs. We strive to ensure that all of our clients have fleets that serve them as assets, not just expenses. Working across the country, we continuously create functional, customized plans for you and your team based on your specific needs and priorities.
Making the Right Choice For Your Company and Fleet
The clear choice for ultimate financial control of your fleet is to choose a dependable leasing company like Glesby Marks. Don’t let your fleet control you, demolishing your budget with unexpected fees and maintenance, and choose the route of efficiency, flexibility, and power of choice.
Contact us today to get a fleet leasing quote for your company!