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In the mercantile automotive fleet world, the intermediate cycle time for intermediate size cars was 29-30 months in 2008. What does this mean? Did the automobile discontinue to function afterward? Was there utterly no value left when the corporate user gave up the keys? Could the vehicle have been driven more miles for a longer period? The answer to the above is simply, it has been determined by experts in vehicle depreciation, disposition and maintenance management that this was the most opportune time to replace this vehicle with a new one. Did the corporate user of these vehicles recompense for the total price of them up front? Chances are a lot of leasing format was applied or at least considered. In fact some municipalities today have decisive to lease rather than buy their fleet vehicles, a reversal of the normal trend of purchasing. There are a good deal of reasons for the continued strength of vehicle leasing for mercantile apps which include no original capital outlay, only paying for the share of the vehicle which is used and still, possible tax vantages ( though that the “off remainder sheet ” aspect may be changing). The same thought pattern is applicable for buyer usage. Even even though normal buyer cycle times may be a little longer than commercial, there ordinarily is a lot of “life” left in a vehicle when it comes time for that trade cycle to run it is course. Someone once said to me, “Wouldn’t it be nice to buy a banana and just compensate for the fruit and not the peal?” This has always resonated with me as to why leasing made sense, “Pay for what you use, not what you throw away.” Furthermore, why take on the hassles of ownership when someone else will do it for you? Most persons are not that welleducated in regards to how to maximize the value of their vehicle when it comes to marketing it. Also, when a vehicle is damaged and repaired, there is a definitive diminution in value affecting the vehicles value. If a vehicle is leased, this reduction in value is born by the leasing company. I believe leasing makes sense with a good deal of inherit gains for any person who ordinarily trades their vehicles on a consistent pattern of three to four years. As to those who “run the wheels off your car or truck”, there are still a great deal of dealers ready to take your cash, trade you a vehicle and hope your return after it uses it is last drop of fuel ( or volt of electricity ) before it is scrapped. |
Tag Archives: commercial vehicle leasing
Does It Always Make Sense To Buy A Used Car?
Posted by Geof Ryan
on November 19, 2011
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