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Fleet leasing and financing solutions

Understanding fleet leasing vs. owning

Make the financing of your new fleet assets less of a burden and maximize your cash flow with fleet vehicle financing options from Element Fleet. We will help you navigate the decision-making process and find the best financing solution for your business. 

 

An important part of long-term efficiency in your fleet management is the initial decision to lease or own your fleet vehicles. Cash flow implications are typically the biggest factor in this decision, but there are a number of other factors that need to be considered.

Should you lease or buy your fleet vehicles?

Managing an efficient fleet requires understanding the differences between leasing and owning fleet vehicles, and determining which option is best for your business goals.

Choosing the right option in many cases comes down to a simple financial question: “Would it be more cost effective for my company to own assets or lease them?”

How does this decision affect you up front?

The main aspect of a fleet leasing vs. ownership decision is the cash flow implications, both short-term and long-term. Put simply, in a leasing agreement, a company will incur payments each month until the vehicle is sold or paid off, with no down payment required. In an ownership scenario, a company is required to incur a one-time lump sum payment when the vehicle is purchased, and that capital is tied up until the time of resale.

Fleet vehicle leasing is typically the answer for fleets with 25 or more vehicles to allow the company to conserve capital at the time of the agreement.

Fleet leasing: What to consider

  • Because less capital is needed up-front to acquire vehicles, companies who choose to lease can free up funds for other investments.
  • In most states, rental taxes will be applied at each lease payment vs. the total price of the vehicle
  • Lessor, not purchaser arrange financing

Owning fleet vehicles: What to consider

  • Ownership is an attractive option for companies with access to excess capital or during times when interest rates are high
  • Sales tax is applied to total vehicle price at the time of delivery
  • The purchaser arranges to finance

How will Element Fleet work with you to find the best fleet financing solution?

Element Fleet’s goal is to maximize your cash flow and minimize your costs. How is this achieved?

Dedicated strategic fleet consultants will provide you with fleet leasing vs. owning, lifecycle cost, vehicle selection, and replacement analysis to minimize total cost of ownership.

Using this information along with a thorough understanding of your business goals, we’ll develop a customized financing plan for your business.Element offers a broad range of fleet finance options and tools to meet your needs, including:

  • Open-end Terminal Rental Agreement Clause (TRAC) lease
  • Closed-end and Fair Market Value (FMV) leases
  • Loans
  • Operating and Capital leases
  • Sale and leaseback funding
  • Self-funding ‘Fleet Acquisition and Remarketing’ program
  • Financing for a wide variety of asset types
  • Integrated ordering tools, invoice payment, tax administration and ongoing inventory management tools

Our financial solutions offer attractive financing rates and are designed to accommodate the asset life of each vehicle. Additionally, you will have complete visibility into your plan and your fleet’s operational costs.

How do the financing options differ for different fleet asset types?

Element Fleet has flexible leasing and finance options for all assets in your fleet including cars and light-duty vehicles, medium and heavy trucks, and material handling equipment.

Explore our fleet financing services to understand the differences.

Cars and light duty financing

Truck financing

MHE financing

For fleet managers, whether to lease or own can seem like a difficult decision. There's only one simple answer to this question: It depends on your company and its fleet goals.

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Recently the Financial Accounting Standards Board (FASB) announced new lease accounting standards going into effect in two years for public companies. Under the new rules, businesses that lease vehicles will be required to include the leases on their balance sheets but won't have the leases counted as debt.

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