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Fleet Funding - Buy Or Lease?

If you are still in growth phase, leasing might offer an easier way to establish your business fleet

Finance is one of the key areas to navigate when considering a company fleet. Would you rather invest your business capital up front or stagger costs? In other words, do you want to buy or lease your cars? Unfortunately there isn’t a one-sizefits-all answer, however, there are a few simple questions that will guide you to the perfect solution. The main two questions to ask yourself and your business are; do you have the capital to buy cars outright, and do you have the staffing resource to manage a fleet?

Kia Picanto


At a very basic level, if you’ve got the money and staff then at least you know you could simply buy and run the cars yourself. However, you still may not want to go down this path for various reasons.

Taking the finance side first, this needs to be broken down further. Even if you have the funds to go out and buy company cars, you may be better off using that capital to help grow your business. In which case, leasing vehicles may be a better option as your company develops.


Within the broad spectrum of leasing, you would then have a host of options. If you want a simple contract hire agreement where all you’re provided with is a vehicle, that’s fine, but you will also need to consider how you’re going to insure those vehicles, how you’re going to service them, and what you will do if one breaks down or is off the road due to an accident?

It’s at this point you need to consider your own skills and staffing. You may have the resources to buy cars, but what about running the cars and also the drivers?

We’ll come on to managing drivers in a future installment of our guide, but even looking after a small fleet of vehicles can be a complex task if you don’t know what you’re doing.

This is where fleet management firms come in. Often these are attached to leasing companies, but there are dedicated fleet management businesses and it’s worth remembering that you can use separate firms for your leasing and fleet management.


If you do choose to use a leasing company then you will need to work out precisely what it is that you want them to do for you against how much it will cost.

The easiest way to do this is first to read up (in guides such as this) about the basics that you could potentially need, before contacting a few leasing firms. The criteria for selection is obviously different for each company, but it could be helpful to ask your business contacts for their recommendations. Alternatively contact an organisation such as the British Vehicle and Rental Leasing Association for advice.

The best leasing and fleet management firms will conduct a free fleet audit to match their services against your requirements. A handful of these will then give you two things. They will allow you to see how they work and provide detailed information should you then wish to opt for a tender process – be sure to ask for a shortlist of clients they’ve worked with.

After that it’s a simple case of seeing which company offers what you need at the best price.