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FleetMaintenance_NovemberDecember_2016

| Light Duty Should you LEASE OR BUY a vehicle? How to decide which option is best By Vesna Brajkovic, Assistant Editor COST OF OWNING Th e cost of buying vehicles adds up to be more than just the initial purchase amount, especially when maintenance responsibilities are being handled in-house. Th e additional costs of owning vehicles in a fl eet include: • Unpredictable and fl uctuating repair costs over equipment life. • Downtime associated with maintenance and upkeep. • Aging fl eets leading to poor brand image and low employee morale. Fleets that own are more likely to keep their vehicles until the absolute end of life, while leased fl eets are typically traded in for newer models generally within three to seven years – depending on lease contract. As the equipment ages and racks up on-road time, maintenance time and cost inevitably increase, which ultimately leads to more downtime. Unlike some lease options, where a replacement vehicle can be provided while another is getting serviced, when an owned vehicle is off the road, it interrupts business operations. Th at means money is being put into a depreciating asset while less money is coming in. “Fleets really need uptime and the use of a vehicle … and not all of the headaches that come along with owning a depreciating asset,” says Jon Lager, senior vice president of sales, Penske Truck Leasing (www.pensketruckleasing. com), a leading global transportation services provider. “Customers are fi nding more and more that they need an experienced partner to handle their transportation demands so they can focus on running their business.” MAINTENANCE If maintenance responsibilities aren’t being all, or partially, outsourced, that adds another layer of costs associated with owning: hiring, training and tooling technicians to keep up with new technology. It’s no trade secret that there is a shortage of technicians as is, and that certainly poses a challenge. But with things like the safety and compliance standards constantly reshaping and redefi ning maintenance trends, it’s not just about fi nding new hires. Of course, technicians need to have the proper training. But beyond that they need the proper tools, continuing education and current information readily available. Aging fl eets especially pose a problem with maintenance because technology is always Leasing companies are increasing fl exibility in leasing programs and offering more customization options in order to appeal to those who want more or less control. Photo from iStock moving forward. Some vehicles in an owned fl eet can be anywhere from 15 to 20 years old or more, and extending product life that long could mean parts and components get scarce, or even sometimes obsolete. Th e cost of those parts and components isn’t guaranteed to stay the same. With leasing, fl eets have the option to pass on all or some maintenance responsibly, while knowing what their monthly costs will be upfront. Unlike some lease options, where a replacement vehicle can be provided while another is getting serviced, when an owned vehicle is off the road, it interrupts business operations. Photo courtesy of Chevrolet When acquiring light duty commercial vehicles, it ultimately comes down to two options: buying or leasing. Th is decision hasn’t always been a clear cut one. But with the increasing fl exibility and customization plans being off ered by leasing companies today, buying vehicles isn’t a common recommendation among fl eet consultants. Why, because of two main reasons, they say: more cost upfront and more commitment. 28 FLEET MAINTENANCE ❚ NOVEMBER/DECEMBER 2016 ❚ VehicleServicePros.com


FleetMaintenance_NovemberDecember_2016
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