Behind The Wheel

Fleet Leasing

Fleet leasing is a whole other ballgame. There are many more variables to consider, such as the size of the fleet you need and the types of vehicles you want. What about their resale value? Do you have a large enough budget? Who will maintain, service and manage the fleet? Should you finance the fleet through the dealer, your bank or another financial institution? Before you make any decisions, run your list of questions by your accountant and the professional fleet expert at the dealership.

Retail leases are for individual personal-use vehicles; fleets are leased under commercial leases that are specifically geared for businesses. It is the general rule at most dealerships that you can qualify for fleet leasing only if you agree to lease 10 or more vehicles. A fleet entitles you to a registration number and all available manufacturers' and dealers' fleet incentive programs.

However, "some companies, including Ford, have lowered their eligibility criteria down to five or more vehicles," says Mike Antich, editor of Automotive Fleet magazine. Toyota's fleet leasing program also accommodates five-vehicle leases.

The key is to shop around. Some dealers will even work with a customer who wants a two- to five-car fleet, offering special discount programs, incentives and customized maintenance contracts. And if you need only a handful of vehicles, Chevrolet can group you together with another small business in similar circumstances so you can both qualify for the benefits of a 10-car fleet lease.

According to Automotive Fleet magazine, fleet leasing is projected to hit a record volume this year, especially in vans. The reason? Vans are replacing station wagons and large sedans in popularity.

Another new trend in fleet leasing: Fleet management companies are bundling more services together. By offering lessees the option to turn over fleet management, dealers are relieving business owners from the hassles of handling the work in-house. These services (which you may be charged extra for) include registration renewals, billing, maintenance, and expense and accident reporting.

One advantage of fleet leases is a clause guaranteeing that the dealer will supply a replacement vehicle should the leased car or truck break down. Check the small print on the lease to ensure this clause is included.

Leasing programs can differ greatly from region to region in the United States. Independent leasing companies, found in the Yellow Pages under "Automobile Leasing," can often save you some legwork. They understand the market, can pull vehicles from different dealers if necessary, and can find financing that will provide you with the most advantageous benefits.

Shopping around and doing your homework is still the best way to get a good deal. Then check with your accountant to make sure individual or fleet leasing is good for your business.

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This article was originally published in the January 1996 print edition of Entrepreneur with the headline: Behind The Wheel.

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