Leasing vs. Ownership

May 14, 2019 | Tips and Advice, Leasing 101

We’re ready to give you the answers about fleet management. We know you require an understanding of the relative advantages of leasing vs. owning. And a good working knowledge of lease options, fleet solutions and financing strategies is the best way to achieve that.

Does leasing make sense for your company?

That’s the first question to answer. In addition to funding, consider the other advantages of leasing:

  • No Sales Tax
  • Off-balance-sheet Financing
  • Tax-deductible Payments
  • Purchase Option after 12 Months
  • Increased Vehicle Incentives
  • Preservation of Working Capital
  • Disposal Options

We wouldn’t be providing full service if we didn’t give you the complete picture. And total, custom fleet solutions are what we’re all about. We build successful relationships on a shared understanding. Together, we’ll look at the impact leasing has on administration, sales tax, balance sheet treatment, acquisition cost, and vehicle remarketing.

What are the real differences?

At Union Leasing, we put attention into every detail. That means we provide comparisons of all facets of fleet management, not just funding. We think an in-depth analysis isn’t just good — it’s essential.

Administration

Managing a fleet requires specialized skills and dedicated resources for ordering new vehicles, selling used vehicles, and monitoring fleet incentives and maintenance activity. By outsourcing to a fleet management company like Union Leasing, you have a low-cost way to handle workflow fluctuations and keep up with changes in manufacturers’ incentives.

Sales Tax Implications

In 35 states, tax is applied to the lease vehicle’s monthly rental payment instead of being a charge against the vehicle’s initial purchase cost. Paying tax on the monthly payment stream both reduces total tax paid and improves cash flow.

Balance Sheet Treatment

Depending on a lease’s structure, it may qualify as an operating lease in accordance with FASB 13, allowing the lessee to expense the lease payment up to the amount utilized for business purposes.

Manufacturers’ Incentives

Up to 30 percent of available incentive dollars must be solicited from the manufacturer or dealer. Taking full advantage of these incentives is an effective way to reduce acquisition costs.

Resale Value

Maximizing the resale value of a vehicle involves knowing which sale outlet to use and determining whether the timing is right for the marketing of a particular vehicle. Union Leasing never assumes the same net resale value of a vehicle whether it’s leased or owned, and neither should you.

Online Access When You Need It

The quicker you get the information you need, the more efficient you can be. That’s why Union Leasing gives our clients online access to receive and review billing, payoffs, and reports. Important information such as serial number, unit number, location, branch code, in-service date, and lease payment is available at your command. You can also access reports on detail payoff and registration.

Find out how Union Leasing can go the extra mile for you. Contact us today

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We provide a range of customized fleet management solutions, industry-leading technology, and innovative products. Whether it is consultative planning or assisting the day to day, over 60 years of experience and industry expertise means we can always find more ways to save you time and money. But what makes us really stand out as an industry leader is the high-touch, personal service we provide to every single one of our clients. With a dedicated account team who knows your business inside and out, you can rest easy knowing everything will be done just the way it should be.

 

 

 

Find out how we can make your fleet run more efficiently and effectively.

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