What is fleet leasing and how does it work?
As a business, reliable and affordable transport is essential to commercial growth, but buying a fleet of vehicles can be an expensive commitment. Fleet leasing is an alternative to purchasing outright, helping companies source brand-new fleet cars and vans.
To better understand fleet leasing, we’ve put together this guide, which explores some of the most commonly asked questions. All this will help you decide whether fleet leasing is right for your business, and why choosing Synergy to replace existing vehicles or invest in a larger fleet is the right choice.
What is fleet leasing?
Fleet leasing refers to a business leasing multiple vehicles for their operation. It’s an affordable solution if you require more than one vehicle, as the company won’t own the vehicles and won’t be paying towards the cost of ownership. Instead, they are leased for two, three, or four years.
Most commonly, fleet leasing is used by businesses who want easy vehicle sourcing and management, reduced maintenance costs, and access to competitive business lease deals. Once the leasing contract has ended, each vehicle must be returned to the finance provider, allowing companies to refresh their fleet regularly.
A fleet vehicle can also come in various forms. It could be a fleet of company cars for directors or sales executives, a shared electric car used by multiple employees, or a fleet of van leases for running operations up and down the country. This means fleet leasing can be specified to meet your commercial needs, while avoiding expensive disposal and depreciation costs.
How many vehicles are in a fleet?
Many business owners will assume they have to run a large number of vehicles to qualify for fleet leasing, but that’s not the case. A business that runs more than one vehicle will qualify as having its own fleet.
So, your business can qualify for fleet leasing if you’re a smaller limited company with only a couple of cars or a large corporation running hundreds of vans.
How does fleet vehicle leasing work?
Fleet leasing works the same way as business leasing but relates to a greater number of company vehicles. Let’s take a look at how to lease a fleet with Synergy:
Choose the type of vehicles you would like to lease – these can range from electric cars and hybrids to specialist platform vans (or a range of different vehicles depending on your requirements).
Decide on the number of fleet vehicles your operation requires. You could be replacing existing old vehicles with new vehicles over time, or introducing a larger number of vehicles to your company fleet to accommodate growth.
Contact our dedicated team here at Synergy for a complimentary fleet consultation and review.
Our team will identify the right type of funding for your business, secure any relevant discounted terms, and source the vehicles required.
Complete a short business finance application.
Once this has been accepted and financial checks have been passed, your vehicles can be ordered — you will receive regular updates from our in-house team.
We will contact you to arrange a mutually convenient delivery date for each vehicle to your business address.
Enjoy your all-new fleet of vehicles — pay monthly for the leasing period.
What are the different types of fleet leases?
Once you’ve decided that fleet leasing is right for your business, you can then choose the type of lease and finance option you’d like to use. There are two main types of fleet lease:
Finance lease (open-end leasing)
- Popular when leasing a commercial vehicle or van — pay towards the entire cost of the vehicle, then arrange resale at the end of the contract.
- Businesses can keep a percentage of the resale value.
- Pay higher monthly instalments for the duration of the agreement.
OR
- Pay lower monthly payments and make a balloon payment at the end of the lease term
- No mileage limits — ideal for businesses that have unpredictable annual usage.
Contract hire (closed-end leasing)
- The finance provider remains the vehicle owner throughout the agreement. Once the lease ends, the vehicle must be returned, and a replacement must be ordered.
- Popular with businesses looking to change vehicles regularly and not take on depreciation costs.
- Terms and mileage of the lease are fixed.
What are the benefits of business fleet leasing?
There are many benefits to fleet leasing. These include:
Cost-effective: Maintenance and servicing costs are included if you opt for a maintenance plan, less to pay upfront, predictable monthly payments, and the option to avoid depreciation costs.
Hassle-free: Every vehicle can be sourced by our team, and then managed on our Fleet Portal, taking the stress out of running a fleet.
New models with the latest technology: Access to a range of all-new models which showcase safety, technology, and fuel efficiency developments, so you know your staff are safe in their company vehicles.
Brand awareness and marketing opportunity: Fleet vehicles can be a great way to advertise your corporate image and brand, as well as avoiding employees from using their personal cars for professional purposes.
To find out more about your leasing options, check out our article on the different types of lease finance available with Synergy.
Considerations for commercial fleet leasing
Before entering into a fleet leasing agreement, there are a few things the team at Synergy would recommend businesses consider. These include:
- The type of lease vehicle that suits your business needs
- Your monthly budget for each vehicle and the entire fleet combined. You may have different bandings of company cars, for example, based on an individual’s position in the organisation
- How many employees need access to a vehicle and would be included as a driver
- How long you can commit to a fleet leasing plan for
- How often you’d like to update and replace your vehicles.
Why choose Synergy for your fleet management and leasing?
Synergy can source and manage your next fleet of business vehicles with ease. You can enjoy access to our specialist Fleet Management system to assist you in tracking maintenance, servicing, and mileage, ensuring your vehicles are running efficiently.
Our Business and Fleet Consultants can guide you through your fleet options and provide bespoke proposals built around your business requirements. Contact Synergy today for more information on fleet leasing and see how we can help your business grow.
Information is for guidance only and is subject to change. Your company accountant should review your business leasing requirements before committing to a contractual leasing agreement. You will not own the vehicle. Early termination charges and end of contract charges may apply.
