As a business owner, you’re constantly searching for ways to minimize risks while maximizing profits. Perhaps you rely on vehicles to provide an essential service to your customers. Purchasing commercial auto insurance is important. Once you have a strong policy in place, you’re likely trying to figure out whether to lease or buy a fleet. Most companies opt to lease instead of buy. However, each company’s financial situation is different. Here’s some important information to help you through the process.
Comparison Between Leasing and Buying Fleet of Vehicles
Let’s understand the differences between the two through the following factors:
- Cost Control
It’s recommended that you assess your financial situation carefully before deciding whether to lease or buy a car. If you decide to purchase the fleet of vehicles, then you are taking on all the associated costs. You’ll be responsible for handling the maintenance for each vehicle, which may get expensive quickly. You’ll be responsible for keeping track of the potential repair costs. Choosing to lease the company fleet can help alleviate stress because you may not be fully responsible for maintenance costs. Research shows that leasing can help you save thousands of dollars per year on potential repair costs.
- Ownership
This is one area where outright purchasing the fleet is preferred. As the owner, you’ll get to keep the vehicles. Once you pay off the loan, you’ll have full autonomy over the vehicles. This differs from leasing the vehicles, where you will be responsible for paying as long as you want to use the vehicles.
- Responsibility
As previously noted, managing a fleet of vehicles can be overwhelming at times. Perhaps you aren’t ready to make the physical, emotional, and financial commitment. Leasing is your best option in this situation. Leasing a vehicle means that you have limited control. However, this may be appealing to you. You won’t be responsible for renewing the license and tags, paying taxes, retaining the title, and other issues.
- Flexibility
Leasing a vehicle means that you are essentially tied to a specific vehicle for a period of time. However, owning the fleet gives you the flexibility to make changes. Owning is a great option if you don’t want to use a specific vehicle for several years.
Leasing a fleet does provide some flexibility as well. Perhaps you want to purchase a specific vehicle, but you don’t have the financial flexibility. If your tight budget restricts you from purchasing a high-end vehicle, you still have the option to lease it for a year or two. Leasing allows you to use your preferred vehicle while striving to increase your revenue so that you can purchase it eventually.
Things to Consider
It’s recommended that you assess your company’s financial strength before making a final decision. While purchasing a fleet may seem ideal, the potential maintenance and repair costs will add up quickly. There’s also the possibility that some of your vehicles are totaled, and you’ll have to purchase replacement vehicles. Adding commercial auto insurance in Long Island helps alleviate some stress, as you’ll be covered in the event that something happens to your vehicles.
Whether You Lease or Buy, Consult with Premier Risk to Cover Your Fleet of Vehicles
Adding a fleet to enhance your business is a significant financial investment. The team here at Premier Risk, LLC will help you find the right commercial auto insurance in Long Island to secure long-term protection for your investment. Contact us today to get started with us.
