If you’re struggling to navigate the complex world of fleet leasing, just know you’re not alone. It can be difficult to understand the fine print of a lease agreement, but Glesby Marks can help you master fleet management and discover new ways to save and achieve maximum efficiency.
At its core, fleet leasing is an agreement where a business gains the use of a vehicle, or multiple cars, for a set period of time, in exchange for regular payments. Fleet leasing is becoming increasingly popular for a vast array of reasons. With Glesby Marks, we are constantly striving to provide the most comprehensive, fair fleet leasing agreements for our customers, so they can maximize their fleet’s efficiency.
No matter the size of your company, fleet leasing offers you the flexibility and control you need to reach the next level.
The Importance of Understanding Your Fleet Leasing Agreement
Being knowledgeable about your lease’s terms and conditions is crucial for optimizing your savings and creating a plan that is tailored to your company’s specific needs. Entering a lease without really understanding what you’re signing can lead to hidden costs, unexpected penalties, or simply not maximizing your agreement. Understanding not just how a lease works, but also what can be negotiated or customized, will empower you to get better deals and improve the management of your fleet.
Key Terms Within Your Fleet Lease
Within your lease agreement, many terms are essential to understanding to fully grasp the contents of your agreement. The lessor is the company that is leasing out the vehicle, and your company is called the lessee. The length of a lease is called a lease term and will most often be listed in months. Within the lease term, mileage allowance will be the set distance a vehicle can travel during the length of the lease. While these are just a handful of common terms, Glesby Marks wants to empower you to know what is in your customized lease, and we welcome the opportunity to educate you about all aspects of your agreement.
Primary Types of Vehicle Leases at Glesby Marks
The two types of fleet leases we offer are capital leases and operational leases. These leases can offer vastly different benefits, depending on your company’s specific fleet management needs.
- Operational Leases allow you to treat your fleet lease like any other operating expense. This means there is no ownership transfer in any capacity, and the leasing company is still responsible for the vehicle’s residual value. Along with the vehicle’s end-of-lease value, oftentimes bundles of insurance, maintenance, and mileage flexibility can also be included to simplify your leasing experience further. This type of lease offers predictable monthly payments, which allows for more accurate budgeting. Oftentimes, operational leases offer lower monthly payments and more flexibility for upgrades or fleet sizing.
- Capital Leases allow you to account for your fleet on your balance sheet, rather than as an operating expense. This means that, for tax purposes, you essentially own the vehicle. This can be a good option for companies transitioning into fleet leasing after purchasing vehicles in the past. To qualify a lease as a capital lease, it must meet one of four criteria. One is if your total lease payment adds up to more than 90% of the vehicle’s total value. Two is if you agree to purchase the vehicle at the end of the lease for a pre-determined price. Three is if the length of the lease will constitute more than three-quarters of the expected life of the vehicle. Finally, the last factor is whether you agree to automatically take over the ownership of the vehicle at the end of the lease term.
At Glesby Marks, we know every company has vastly different needs, and we specialize in finding the exact right lease for your specific requirements.
Choosing the Right Fleet Lease for Your Company
Within the fleet leasing industry, there is simply no one-size-fits-all option. Choosing a fleet leasing option and the specific add-ons or customizations you want to negotiate can be incredibly difficult if you don’t understand how fleet management works. Glesby Marks can help evaluate what your company needs out of a fleet lease and craft a tailored agreement to fit your needs.
Open-ended leases mean the lessee assumes the face value risk of operating the vehicle. These are common for heavy-duty vehicles and specialized equipment which it is more difficult to predict the wear and tear that could occur by the end of the agreed-upon lease term. To offset the lessee’s added risk, we retain a portion of the sale profit when the vehicle sells, and we return it to the lessee.
On the other hand, a closed-end lease means the leasing company takes on the risk; you return the car at the end of the lease with no extra compensation. This is the most common type of lease, and we primarily use it for passenger cars or light-use utility trucks.
Within open-ended leases, a terminal rental adjustment clause (TRAC Lease) can be added. This means we can adjust a vehicle’s final value based on its sale price. This allows your company maximum flexibility with how you report your lease and how you structure your payments.
Solving Your Company’s Unique Fleet Management Needs
When our team crafts a contract for your fleet management, we consider a variety of factors to determine what best suits your fleet’s needs.
- Understanding your company’s cash flow rate is integral when making this decision. Depending on whether your income has significant, rapid increases or decreases through the year, or if it is steady and smooth, that can dictate what kind of agreement we present to you. Depending on that, we can customize your monthly payments and your end-of-lease options to best suit your needs and what will best suit your budget.
- We will also learn exactly what kind of vehicle you need for your fleet. Larger trucks, utility vehicles, or specialized equipment can be more difficult to acquire and more costly to upkeep, which can also affect the type of lease you need based on risk responsibility.
- Finally, the desired mileage allowances can also affect your leasing terms. You can negotiate a lease that’s in your best interest, whether you want more flexibility or a more structured agreement, so you have the right amount of control over your fleet.
The Glesby Marks team has been operating fleet management agreements since 1976 and has the knowledge and experience to find you the right solution to any fleet requirements your company may have.
Informed Decisions for Lasting Fleet Leasing Success
Having a well-rounded, fully formed knowledge base for fleet leasing is the first step in achieving a successful fleet leasing experience. Not only does our team at Glesby Marks want to equip your business with a reliable, fair fleet lease, but we also want you to be fully confident in what you’re signing up for. Ensuring our customers’ satisfaction and comfort in entering a lease agreement is just how we do business.
Contact us today to learn about your fleet leasing options.