For businesses in all industries, one of the most important elements to consider is asset finance as this can have a huge impact on your overall finances. In particular, financing for a fleet of automobiles is crucial as this will be an enormous and costly asset for the business. In today’s day and age, businesses in many different industries require a fleet whether this is for making deliveries, picking up customers or simply for employees to get from A to B in.
Fortunately, there are a few different ways that a company can finance their fleet whether they are looking to obtain their first vehicles, upgrade or add to their current fleet. This means that you should be able to find a method that is well-suited to your particular business and be a smart financial move.
Purchase Outright
If you can afford it, purchasing outright can be beneficial as this gives you complete ownership of the vehicle so that it can be used however you wish. This can be simple, but there are a few drawbacks such as depreciation and the hassle of trying to sell down the line.
Contract Hire/Purchase
Alternatively, contract hire or purchase deals can be a smart move. Contract hire involves making monthly payments until the end of the agreement where you hand back the keys and can take out a deal on a new automobile. Contract purchase, meanwhile, is similar but has a “balloon payment” if you wish to own the automobile at the end of the agreement. These are beneficial for businesses because they are flexible, the monthly payments make it easier to manage and you have the ability to drive new vehicles every few years.
Leasing
Another excellent way to finance a fleet is to arrange a lease deal. Leasing involves paying a fixed fee to hire the car which is based on the original cost of the car minus the cost at the end of the agreement. This means that you are only paying for the depreciation which can be highly effective and particularly when you opt for luxury automobiles as they tend to hold their value better than other cars. The value of the automobile will be key if you decide to lease which is why you should always obtain a valuation from an industry expert like Cap HPI prior to agreeing a deal.
These are the main options that a business has when it comes to financing a fleet. It is a huge decision and one which will have a big impact on the company so you need to carefully decide which method is best for your business. You could always use a combination of the above which could be effective although it will also be complex and could be difficult to manage.
Businesses in many different industries need a fleet of automobiles in order for their operation to run smoothly and efficiently. The success of the company could depend on these vehicles, but they will also be a huge cost in terms of financing and running the cars. Fortunately, there are a few good options available that should make it easy and cost-effective to finance your fleet.
