When it comes to managing a high-mileage fleet, finding ways to reserve your resources and optimize your budget is crucial. By using an operating lease for your fleet, you can boost your savings and customize your plan for your unique needs. At Glesby Marks, we understand that every fleet is different – whether it be the type of vehicles needed, the length of the contract, or even the price tag. Because of this, working with our team of fleet professionals is vital for securing the most tailored, efficient operating lease possible for your fleet leasing needs.
The “How”: What Is an Operating Fleet Lease?
The key to fully unlocking the benefits of operating leases is understanding exactly how they work and what makes them different from other types of financing agreements. At their core, operating fleet leases are just long-term, fixed rental agreements for your company’s vehicles. An easy way to think of it is like a subscription service for your vehicles. Unlike some leases that are designed to be ongoing, operating leases are contracted for a specific amount of time. At the end of the term, you simply return the vehicle and strategize your next move, whether it is a new lease or something different. Because of this, you get to use the vehicle and enjoy the benefits of a predictable monthly payment with none of the depreciation costs or maintenance fees associated with vehicle ownership.
Operating Leases Versus Capital Leases
The other most common type of fleet lease is a capital lease. The primary ways that these leases differ and why operation leases are more geared toward high-mileage needs include:
- Ownership: One of the biggest benefits of operating leases is that you don’t have to worry about vehicle depreciation. Because of this, operating leases don’t typically entail ownership at the end of the contract. However, capital leases are sometimes geared toward eventual ownership at the end of the lease term.
- Balance sheet impact: Operating leases are reflected on your company’s balance sheet as a rental or an off-balance sheet item. On the other hand, capital leases are recorded as an asset, which means the lease obligation is formally recorded as a liability, and your company takes on the responsibility of depreciation.
- Risk: For high-mileage fleets, risk can be a large factor, making operating leases the ideal type of contract. This is because your fleet leaser will assume the risk of the vehicle’s residual value and depreciation. For capital leases, the lessee bears the risk factor.
- End of lease terms: Another large difference between the two types of fleet leases is how the end of the lease plays out. Operating leases require the vehicle to be returned to the leasing company, after which the lessee can either enter a new lease or even buy the old vehicle at market value. At the end of a capital lease, the vehicle can be purchased at a nominal fee, as if it were making the final payment for a loan.
Why Operating Leases Can Be a Game-Changer For High-Mileage Fleets
High-mileage fleets have a myriad of specific needs that make operating leases a vital component of your business. Not only can they serve as a key financing option for fleets with high-touch requirements, but they can also play a vital strategic role in boosting operational efficiency and capital resources.
Boosting Operational Efficiency With Operating Fleet Leases
Managing a fleet is a large administrative undertaking to maintain optimal efficiency, especially for high-mileage fleets. This is one of the biggest benefits of outsourcing your fleet management and entering an operating lease with Glesby Marks. Our team is knowledgeable and dedicated to helping you maximize your fleet’s efficiency and profitability. When you let us handle tasks such as vehicle maintenance scheduling, registration renewals, and vehicle acquisition, you can significantly lighten your administration’s load and keep your focus on your business’s goals, rather than on monotonous paperwork.
Additionally, you can access newer vehicles faster when you enter an operating lease with Glesby Marks. We strive to continuously keep our clients using the highest-functioning models on the market. By using a consistent fleet cycle plan, not only can you keep your high-mileage fleet working faster for longer due to mitigated breakdowns, but you can also reap the benefits of the most modern technology available.
Increasing Your Business’s Cost Savings With An Operating Lease
Arguably, the biggest impact an operating lease can make is on your company’s bottom line. They do this in two primary ways:
- Predictable costs: Unpredictable bills can be the fastest way to kill your budget. From unforeseen maintenance issues to skyrocketing insurance rates – operating leases can give you a baseline price that doesn’t change month to month. This makes budgeting more straightforward and your monthly payments a steadfast, dependable cost without any major hits from repairs or accidents.
- Lower total cost of ownership (TCO): High-mileage fleets are unique because their depreciation happens rapidly due to the large amount of travel and wear-and-tear. This can make ownership a large risk for your company. When you choose to enter an operating lease with Glesby Marks, we take on the brunt of responsibility and allow you to avoid the loss in value, disposal costs, and the financial risk of depreciation – contributing to a significantly lower overall TCO.
Optimizing Your Bottom Line: The Vast Tax Benefits of Operating Leases
Operating leases also offer tax benefits for your company. This is because operating fleet lease payments are typically completely deductible as a general operating expense for your company. This can be a vital component of your financial strategy by keeping more money in your pocket.
Operating Leases and Strategic Management for High-Mileage Fleets
Glebsy Marks’ arsenal of strategic management tools can positively impact a high-mileage fleet. Every single decision can make a lasting impact on your bottom line, so choosing to work with an expert team like ours can significantly improve your management through a variety of facets, including:
- Telematics and GPS tracking: We can install these telematics devices into your fleet, allowing you to track their location, mileage, fuel consumption, and driving behavior in real-time. This can play a huge role in monitoring your lease from anywhere in the world.
- Maintenance and management software: At Glesby Marks, we use software to schedule and plan for your fleet’s maintenance and periodic repairs. By sticking to a preventive schedule, we can help minimize downtime and increase your company’s profitability.
- Fuel management systems: By implementing things like dual cards and tracking each vehicle’s unique fuel consumption habits, you can identify efficient models, trends, and even specific driver spending to manage your fleet’s overall cost.
- Driver management tools: These tools can help identify driver safety reports and behaviours to help you encourage your staff to use optimized routes while being safer on the road.
Drive With Confidence By Choosing An Operating Lease For Unmatched High-Mileage Efficiency
When it comes to running a business and a high-mileage fleet, every dollar counts, and your chosen strategy can make or break your budget. When you choose to enter an operating fleet lease with Glesby Marks, your high-mileage fleet can go from being a costly liability to being a strategic investment that boosts your company’s mission. If you’re looking for long-term financial gain, operational productivity, and lowered administrative loads – operating leases might be the perfect solution for you. Contact Glesby Marks today for a free lease estimate for your high-mileage fleet.