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We often hear the question asked: “What is a fleet vehicle and should I get one for my business?” Before we attempt to answer the question, let’s take a look at fleet vehicles in more depth.
So how do you define a fleet vehicle? A fleet vehicle is a motor vehicle owned or leased by a business. Various forms of organisations may use fleet vehicles to provide vehicles to staff such as sales representatives or management or use them for delivering goods. Vehicle rental companies and taxis may also use fleet vehicles. Depending upon the size of the company fleet, it may be looked after by a fleet manager.
Before deciding on whether or not you should buy a fleet vehicle, it is a good idea to look at both fleet purchase and fleet leasing. Some businesses prefer to buy outright with a larger outlay at the start but no monthly fees. However, this would require a large capital outlay and it should be noted that vehicles do depreciate quickly. If your company has been in existence for longer, and has a lump sum available, then purchasing may be more attractive.
When it comes to fleet leasing, this type of arrangement enables you to choose the vehicles required for your fleet, and then simply pay a monthly invoice. Maintenance of the vehicles is normally included, so as a business, you have less things to worry about or to monitor.
The reasons for getting a fleet vehicle will vary according to the type of business that you have. Maybe you need to make deliveries, travel to see clients regularly or provide management with company vehicles. Providing employees with a high-spec luxury vehicle can attract staff of a higher calibre. Leasing a fleet of cars or vans is very simple. If you buy or lease more than ten vehicles, this is classed as a commercial fleet, which has the potential to attract various incentives from the manufacturer. If this is your first fleet purchase, always speak to your vehicle provider and find out what sort of service they can provide.
In order to assess the pros and cons of buying a corporate fleet vehicle, it is a good idea to work out what it will cost, taking into account the costs for insurance, fuel and maintenance. There will also be a value for appointing a fleet manager to keep track of the requirements of each vehicle.
● Unlimited mileage – drive as many miles as you wish without restriction. (Note: high mileage vehicles may attract a much lower price when sold).
● Purchase a used vehicle – spend less and buy a good used vehicle after checking the condition.
● Wide choice of make and model - purchasing tends to provide you with improved access to a wider range of vehicles with a choice of types.
● Maintenance and compliance – keeping the vehicle on the road in a good and roadworthy condition is up to you as it forms part of the company’s responsibilities to service the vehicles. In order to keep up with this, the company may need to hire a fleet manager at an additional cost to assist. If, however, you choose to make use of a Fleet Management Service, all of this would be included.
● Resale value may be less – when you sell, you have no guarantee what price you will make. As vehicles age, upkeep may become more expensive.
● Keeping up with demand – you may need more or less vehicles at varying times of the year. Purchasing vehicles do not allow you to be flexible with this whilst the leasing option does.
There is no easy answer to the question: “Should you get fleet vehicles for your business?” Much depends upon your size and type of business and how long you have been in operation. All of the pros and cons need to be carefully considered before making a decision, looking at how your business will be affected both short and long-term.
Toyota Fleet Management Services provide a mix of fleet finance options. Should you be looking to purchase a new or used fleet vehicle or if you are seeking access to fleet leasing, do get in touch with Toyota Fleet Management Services today or contact us on: 1300 888 870.
The information provided by Toyota Fleet Management, a division of Toyota Finance Australia Limited ABN 48 002 435 181, AFSL and Australian Credit Licence 392536, is of a general nature and for your information only. Nothing in this article constitutes or should be considered to constitute legal, taxation or financial advice. Before making a decision about any product or service described, we recommend that you seek independent professional advice such as from your accountant, taxation or financial adviser or lawyer, who can advise you about your personal circumstances and what would be suitable for you.
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