We tend to keep a close eye on trends in the world of commercial auto leasing – it’s our job, after all! Over the past few years, we’ve noticed a few trends that are becoming more and more common in the world of commercial leasing. Take a look, and learn more!
1. Customers Are Choosing Open-End Leases
In the past, closed-end leases (or “walk away” leases) were quite popular. Depending on your lease agreement, you may get a 12,000-15,000 mile-per-year lease, with mileage penalties based on overages. At the end of the lease, customers can choose to walk away from the lease, trade-in the value towards another vehicle, or buy out the contract.
However, we are seeing more customers choose open-end leases. Open-end leases allow the leasee to determine the residual value of the vehicle at lease-end, which increases cash flow by lowering monthly payments. If the value estimated is lower than the actual value, the lessee gets a check from the lessor at the end of the term – if it’s higher, the opposite is true.
This allows customers to only pay for what they use – with no overage penalties. When properly structured, it’s the cheapest way to lease a vehicle, so these leases are climbing in popularity.
2. Fuel Economy Is Not As Much Of A Concern
Currently, oil prices are much lower than they were even a few years ago, and gas is relatively affordable. This means that fuel economy is not a primary concern when renting a vehicle. While some companies are willing to shell out extra for Flex Fuel vehicles, hybrids, and other vehicles that focus on fuel economy, it’s not quite as important.
3. Full-Service Leases Are Becoming More Popular – Especially For Small Businesses
Full-service leases usually include maintenance such as tire rotations, lightbulb and oil changes, and other services that are not included in a standard lease agreement.
Typically, a full-service lease will be more expensive than simply maintaining a leased vehicle on your own. However, it does give you peace of mind, knowing that major repairs and maintenance will be taken care of for a set cost.
This makes full-service leases quite popular among smaller companies. For example, while a large commercial company may have in-house mechanics who can perform maintenance operations in-house, a smaller company might not. Having a lease that includes all standard maintenance options will ensure proper vehicle performance – and make expenses more predictable.
Keep An Eye On These 3 Commercial Auto Leasing Trends!
Whether you’re the manager of a large fleet, or just renting a few trucks or cars for your company, it’s helpful to stay on-trend and understand common leasing trends. So think about these trends and how they might affect your company – and make the right leasing decision.
