Good ideas are known to survive the test of time. One of these is paying a fixed fee to use something you need for a specific duration, but without having to purchase it. This basic principle of leasing was already practised by Sumerians in pre-Christian times – as we can read about, for example, in the Handelsblatt¹⁾. Today, a good 5,000 years later, the concept of leasing has lost none of its appeal; quite the opposite in fact: companies that require mobility almost inevitably opt for this form of procurement when establishing a fleet. And for many good reasons.
Because liquidity is preserved – and planning certainty is optimised
Purchase 50 new company cars just like that? That should set alarm bells ringing in many a controlling department – especially now as we face an increasingly complex world, a world in which it is sometimes difficult to predict today what will happen tomorrow. Liquidity is often the trump card in this respect – and this is precisely what a company maintains with leasing. The fixed rates can be factored in effortlessly month by month. At the end of the contract period, the lessee simply returns the vehicle to the lessor – and does not need to worry about marketing, loss in value or residual value risk.
Because leasing makes company mobility more flexible
12, 24, 36 … or even 60 months?²⁾ The lease periods – for example with Volkswagen Financial Services – can be organised just as flexibly as the company’s individual business model demands. Whereas a company with a service fleet secures its vehicles straight off for four years, for example, because it has concluded fixed maintenance agreements with its customers, an IT service provider needs mobility on a project-related basis where possible; for example, if employees have to travel to a customer site regularly over a period of a year to implement a software solution but then revert back to working routinely in the office.
Because having a state-of-the-art company car is a strong motivational tool
The fact is (and remains): skilled professionals are not simply waiting around every corner – they have to be won over systematically. By providing them with company cars for private use also, their desire for individual mobility is addressed automatically. But it’s one thing to attract employees, it’s another to retain them. And this is where leasing offers another advantage over other forms of procurement: ultimately it offers the possibility to win favour with employees with a state-of-the-art vehicle after the lease period has expired. This represents real added value in terms of employer branding, especially in times of rapid technological progress.
Because leasing offers enormous savings potential as regards administrative expense
Private car owners know full well the administrative expense alone that a car involves: MOT appointments, inspections, repairs, tyre changes etc. will keep you on your toes. Multiply that 20, 50, 100 times or more? That leaves fleet managers with scarcely any time to look after more important matters such as the strategic alignment of the fleet. That is of course unless those aspects mentioned above (as well as many others) can be outsourced; an option leasing offers fleet customers with Full Service Leasing. In this case, Volkswagen Financial Services can take over a whole battalion of important but what are usually time-intensive tasks for fleet managers: from processing broadcasting fees to dealing with infringements through to electronic driver licence verification, for instance in Germany. Fuel and charging cards from the Volkswagen Group, maintenance and wear, insurance etc. can be integrated in the Full Service Leasing agreement, thus making life noticeably easier for fleet managers (and users).
News on the topic
¹⁾Source: Handelsblatt: Die Wurzeln des Leasing im babylonischen Ochsenhandel (German language)
²⁾Between 12 and 72 months for commercial vehicles.
© Volkswagen AG