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AUSTRALASIAN FLEET CONFERENCE & EXHIBITION

See You at the 2023

AfMA Conference

MAY 23-24th 2023- SYDNEY ROSEHILL

Extended Warranty Solutions For Your Fleet Vehicles

Cars, Vans, Trucks, we've got you covered.

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The Benefits of Purchasing

Fleet Vehicles Rather Than Leasing.

 

Purchasing vehicles rather than leasing them can provide several benefits for a company. Here are some key advantages:

 

 

  • Asset Ownership: When a company purchases a vehicle, it becomes a tangible asset on the balance sheet. This can strengthen the company's financial position and provide collateral for loans or other financing options.
  • No Kilometre Restrictions: Leased vehicles typically come with kilometre limits. Purchasing a vehicle frees the company from such restrictions, allowing for more flexible use and the ability to drive as many kilometres as needed without incurring penalties.
  • Cost Savings Over Time: While the initial cost of purchasing a vehicle may be higher than leasing, the long-term costs can be lower. Once a vehicle is paid off, the company will no longer have monthly payments. This can lead to significant cost savings over time, particularly if the vehicle is well-maintained and has a long lifespan.
  • Availability of new car stock. Over the past few years, new stock has been limited and slow to arrive. Keeping fleet vehicles for a longer period can manage these delays.
  • Tax Advantages: Companies may be able to take advantage of tax benefits when purchasing a vehicle, such as depreciation deductions or other tax credits. These can help offset the costs of acquiring and maintaining the vehicle.
  • Fuel Allowances. Companies can negotiate their own fuel arrangements and rebates for their vehicles.
  • Flexibility in Vehicle Modification: Owning a vehicle allows the company to make any necessary modifications or customisations to meet specific business needs. Leased vehicles often have restrictions on modifications, which may limit the vehicle's utility for the company.
  • No Early Termination Penalties: Companies that purchase their vehicles can sell or trade them at any time without incurring early termination fees, which can be substantial with leased vehicles.
  • Better Control over Maintenance: Owning a vehicle allows a company to control its maintenance schedule and procedures, ensuring that the vehicle is well-maintained and reliable. Leased vehicles may have specific maintenance requirements dictated by the leasing company, which could be more costly or less convenient.
  • Resale Value: A purchased vehicle retains its resale value, which can be recouped when the company decides to sell or trade the vehicle. This can help offset the initial cost of purchase.

 

It is essential to consider the specific needs and financial situation of a company when deciding whether to lease or purchase vehicles. Each option has its advantages and disadvantages, and the best choice will depend on factors such as the company's cash flow, vehicle usage requirements, and long-term plans.

 

More FREE information is available:

 

https://business.gov.au/new-to-business-essentials/leasing-or-buying-plant-equipment-and-vehicles

 

The Benefits of Retaining

Your Fleet Vehicles For A Longer Term.

 

Purchasing vehicles rather than leasing them can provide several benefits for a company. Here are some key advantages:

 

 

  • Lower Capital Expenditure: By keeping fleet vehicles longer, a company can reduce the frequency of large capital expenditures associated with purchasing new vehicles. This can free up capital for other business investments or operational expenses.
  • Depreciation Savings: Vehicles depreciate in value over time, but the rate of depreciation is typically highest in the first few years. By holding onto vehicles for a longer period, companies can spread the depreciation costs over a longer time frame, potentially improving their financial performance.
  • Reduced Fleet Turnover: By retaining vehicles for longer periods, the company can reduce the administrative costs and time associated with fleet turnover, such as researching and negotiating new vehicle purchases or leases, and coordinating the disposal of old vehicles.

 

Ultimately, the decision to keep fleet vehicles longer and not purchase new stock will depend on the company's specific needs, financial situation, and fleet management strategy. Companies should weigh the advantages and disadvantages of this approach and consider factors such as maintenance costs, vehicle reliability, and the potential impact on the company's image and productivity.

 

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