Question

Vehicle Leasing vs. Purchase

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Douglas Smith

Looking for information from jurisdictions that have done a study on the advantages/disadvantages of vehicle leasing versus purchasing. Thanks.

Answers

 
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William McCauley

Douglas, here is some free consulting for you. If you cannot afford to pay for a vehicle, then you cannot afford the financing costs of leasing. Lease purchase is a private sector concept because they can write off the interest. There is no such benefit to municipalities. The benefit to a city is that they get to buy something they cannot aford. If it is equipment with a big price tag, roll it into a bond issue and pay it out over the useful life of the asset. Have a great day.

 
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Deborah Bond

An excellent question for these tough times. We have been working on and off with Enterprise Car Rental in determining if indeed we would see a cost savings that would out way some of the disadvantages to leasing. They have invested quite a bit in the analysis and advantages for leasing for governments and have some big clients. We are now at a point where we will take a portion of our inspector fleet and move it to leasing. For us it was more a question of limited capacity in our fleet maintenance staff since there have been cuts there and this seemed like a good solution that did not add to our costs to manage our fleet and should help us move into more fuel efficient vehicles on a shorter time frame than saving up to buy replacement vehicles.
I recommend you contact them and have them do an analysis for you. Here is contact Information: Rob Ladousier, Government Marketing Mgr, Fleet Mgmt Division, St Louis, MO - Robert.C.Ladousier@erac.com (314)512-3906

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30 Aug 2010