Buy or lease? How to make a proper comparison

As a business, you have three ways of acquiring vehicles for your company fleet:

Buying outright

With this option, the entire financial and administrative burden remains with you. When you buy the vehicle, ownership is transferred to you, the purchaser. As the vehicle owner, you pay not only the cost of purchase, but also all the expenses associated with the maintenance and administration of your fleet. In addition to these extra costs, you also bear the risk of the residual value (not to be underestimated).

Financial leasing

Under a financial leasing arrangement, the vehicle you use remains the property of the leasing company. Financing covers the vehicle only. You, the lessee, are still responsible for paying the administrative costs plus all expenses associated with servicing and managing your fleet. Here, too, the greater part of the risk remains with you, the lessee. This is due to the high down payment amounts and habitually low residual values.

Full-service leasing or operational leasing

As with financial leasing, ownership of the vehicle also remains with the leasing company under full-service leasing arrangements – often also referred to as operational leasing. As the name suggests, full-service leasing payments include all additional services such as insurance, repairs, maintenance, tyres and replacement vehicles. Furthermore, the vehicle, or indeed the entire fleet, is managed by fleet management specialists. This is an efficient means of cutting back on extra costs and reducing the time spent on administering your vehicle fleet. The leasing company also bears the risk of the residual value and any exceptional costs.

Contrary to general opinion, leasing is neither cheaper nor more expensive than outright vehicle purchase: the costs are more or less the same. The big advantage of full-service leasing is that it leaves you free to focus on your core business whilst the leasing company looks after the task of managing your vehicles.

 

 

Buy or lease your vehicle?

Take the pressure off yourself – with Arval!

You know your business, we know ours. 82,100 Arval customers around the world confirm that. Take advantage of our many years of experience and entrust your vehicle fleet to our specialists. We would be very happy to explain the many benefits of full-service leasing to you in person. Please contact us for an individual offer.

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