Should You Lease or Buy
7 Reasons you should lease a bus than buying one
Today, nearly one third of vehicles on the road is leased and not purchased. The decision to lease or buy depends largely on the purpose of getting one. There are a number of reasons to justify leasing as a better option than purchasing a vehicle. It is a viable option for companies not ready to expand their current fleet, since it saves them time and money. There are some companies that need vehicles seasonally and buying a new one seems like a bad deal, whereas bus leasing sounds like a wiser alternative.
Here are seven reasons why a company should consider leasing rather than purchasing a bus.
Newer Models for Lower Price: In cases when you don’t actually want to expand your fleet but new vehicles are required, the best option may be to lease a bus since you can get the latest models easily without paying as much as the owner did. Companies can afford newer models and bigger buses when they lease one rather than purchasing it. There is another catch here since the automakers that sell these buses typically have high residual value. The dealers look forward to high residual value, once the lease expires on the bus, they can offer expensive vehicles for not much more per month than any other old or smaller bus.
- Less or No Down Payment: You may need to save on the initial down payment. A lease is a form of financing, it’s not a loan. Generally, a down payment is used to lower the monthly payments but with a bus lease a down payment actually exposes you to greater risks and lost opportunity cost. Paying for a down payment on a leased car means you will never recover that money. What if, the vehicle is wrecked or stolen in the first month, and if your down payment was $5,000 then that means you have just paid $5,000 for a one-month lease. Hence, there is no down payment on leased vehicles. Making that big amount of down payment on a new vehicle doesn’t even make sense since bus leasing sounds like a better option financially. When you lease a bus you walk out with the keys of the vehicle in hand without having to pay hefty monthly bills, and all at ‘zero-down.’ Some leasing options do include a small amount of down payment with a higher mileage allowance or damage forgiveness. Nevertheless, with zero down payments, going for a bus lease is a much better option than purchasing.
- Monthly lease payments are lower than loan payments: Paying a monthly lease amount is much lower than paying out a monthly loan because you’re paying for the vehicle’s depreciation during the life of the lease. When buying a new bus, you must pay for the entire vehicle – including taxes, permits, interest charges and any other fees.
- Tax benefits to lease a bus: When you lease a vehicle you simply pay taxes on your monthly payment instead if you buy the vehicle you would have to pay the entire amount of sales tax within 30 days of purchase.
- No Maintenance Costs: When you lease a bus for three years, the vehicle has full warranty during the entire lease period. Lease agreements are shorter than vehicle warranties. If anything breaks down, you don’t have to pay for the bus repair. Maintenance costs are fully covered with a bus lease. Even if maintenance is not covered, you can maintain the car which is why dealerships will check the car for signs of neglect and they usually purchase with a ‘free maintenance’ condition before signing the lease agreement. Although, if the wear and tear of the vehicle with tires or brakes wearing out, you have to spend some to replace these parts. Or you could opt for an extended warranty in order to avoid maintenance charges completely.
- It’s easy: Leasing is easier financially, much more convenient and faster than buying a car. When you want to get rid of the vehicle you can simply lease another one. You don’t have to wait for the lease to expire to get another vehicle.
- GAP protection: When you lease a bus and in case it gets stolen or damaged then you can benefit from the GAP protection that will not let you be on the hook for the difference between what is owing and what your insurance will pay out.
- The smell of a new car: When you opt for leasing a vehicle, you can get a new one that has the smell of a new car inside. Your employees will love the smell of a new bus and will also feel that you care by getting them a new vehicle for transfers and transport.
First published by atlanticbussales.net, October 9th, 2015.