30th January 2020

Renting and leasing vehicles are both cash flow friendly options which make for easy budgeting. Purchasing a new car can have its risks, the value begins to depreciate as soon it’s driven off a dealer’s lot.
Oil tycoon J Paul Getty said: “If it appreciates, buy it. If it depreciates, lease it.” But at Compello, we suggest you rent it. Below we have a few questions to consider when looking to add a new vehicle to the fleet.

What are the advantages?

Leasing is great for long term

• Leasing contracts are typically the length of 2-3 years, as the employee is tied down to the car for a longer period with little to no flexibility this can be the more cost-effective option.
• This is particularly ideal for a reliable, consistent employee, where you know they will see the contract through to hand over.
• This is also an option that works for a business pool car, where you know various people will need to use the car during different periods.
• Your employee is also able to choose the model which best suits your business’ requirements.

Renting is fast and flexible

• Renting is the most flexible option available to businesses rather than buying or leasing. With the option to rent from 1 day to a year the terms are more flexible.
• Rental is perfect for those times where an employee is having a new vehicle built or to see them through their probationary period, for example.
• If your employee is truly looking to make an impression, rental cars will always have the newest plate.
• Renting is not limited to cars and van, you have access to a wide variety of vehicles such as Taxi’s, refrigerated HGV’S, disability access vehicles and so much more. With rental you can be driving the vehicle away the same day.

Payment Terms & Added Costs

Leasing can be cost-effective if you’re savvy

• There is a greater upfront cost with leasing to be aware of, but this can vary on who you lease with.
• If you are to go over the agreed mileage you can be charged and even be required to buy the car outright.
• As part of any leasing agreement, any damages are the lessee’s responsibility to have repaired, otherwise, you can expect a hefty charge there too.
• When it comes to maintenance and servicing this is left to the business to organise, which can work if there is a readily available business fleet manager or similar. There are packages available where the leasing company can take care of this on the business’ behalf. However, this comes with an additional cost.

Rental can be carefree

• With rental at Compello, you will not put a deposit down and payment is through a 30-day credit period, kinder to the cash flow.
• All added costs are supplied to you beforehand alongside your rates, so you are aware of any additional costs that could crop up.
• The maintenance and servicing costs are covered by the rental contract. The rental provider will look after any damages done to the car and will offer you a replacement car, depending on the circumstances.
• At Compello you will have access to a reservations team who are readily available to assist you with anything you may need.

What are the Risk Factors of renting or leasing your car?

Leasing must be an informed decision

• Once you have chosen your car, you can’t swap the car for another. It’s important to ensure the car you opt for is a reliable car.
• Leasing vehicles for business have stricter terms than for personal use, if you wish to terminate the contract early you will most likely still have to pay for the remaining contract. It’s important if you opt to lease that it’s a calculated decision.

Rental has the least consequences

• Simply swap the car out for another if it isn’t right for you with rental.
• If you wish to terminate the contract early, you can be charged a fee, it is dependent on the rental agreement. Some come with a minimum term agreement which would need to be paid for.

It is worthwhile considering all factors of the requirements of a vehicle to truly understand whether leasing or renting is best suited to your business’ requirements. With more flexible terms, rental can be a brilliant option to consider with fewer risks and less time lost on administrative tasks.