What to look for in a good car lease for your business
Car leasing can be a great mobility option for businesses, as it brings a whole host of benefits. But when you set out to lease a car, or a fleet of cars for your business, there are some things you should keep in mind - so that you can optimise your lease to suit the needs of your business, while fully milking the benefits it brings you.
We've put down a few essentials you should consider, which will help you spot a good car lease for your business.
Evaluating your requirements
The first step towards a good car lease is to have a good understanding of your mobility needs. If you're looking to lease a company fleet for your field staff, who travel shorter distances, but more often, you'd choose a different car and car leasing plan, as compared to when you're offering car leasing to your employees as a perk.
Depending on the needs of the company, you can explore various lease options such as ALD Pro - Car lease for field staff and ALD Ugo - Car lease for corporate employees, and different mileage and tenure combinations for the car models that you believe fit best.
What type of lease should you opt for?
Essentially, there are two types of car leases – Operating Lease and Finance Lease. When it comes to choosing between them, you need to evaluate what each one brings to the table.
An Operating Lease is an agreement where you pay a monthly payment to the leasing company for the right to use the car. Such a lease comes with many add-on advantages that can be included in the monthly payment. Another benefit is that you can simply return the car lease, without the risks of resale at the end of the lease.
A Finance Lease, however, is much like a loan from a financial institution. It provides cumulative financing on the ex-showroom price and the on-road tax, enabling you to drive the car, but it also comes with a hefty down payment and leaves the hassles of maintenance, insurance, etc. on you.
What is the lease going to cost you?
Once you know what you need, it's time to calculate what it's going to cost you. Any car lease has a number of aspects when it comes to costing. Let's have a look.
List Price
For starters, this is one of the main factors that determine how much your monthly lease rental is going to be. So, when you set out to choose a car(/s), be mindful of the ex-showroom price of the car - the price which the manufacturer of the vehicle determines for the car.
Residual Value
The value of any car depreciates with time. When you lease, you only pay for the time you're using the car, and hence you only pay for the depreciation during your lease term.
The residual value of a car is an analysis of what it will be worth at the end of the lease term. The higher the residual value of your car, the lower the cost you incur in your lease rentals.
For example, say you're leasing a car worth ₹10 lakhs. Let's say the car is worth ₹4.5 lakhs (residual value) post your lease term of 4 years. Your lease rentals are only based on the amount left after the residual value is subtracted from the price of the car (i.e. ₹5.5 lakhs).
Down Payment
For any business, proper allocation of finances is key. When you lease your company fleet with a mobility partner such as ALD, you don't have to block a huge sum in paying the down payment for your car, unlike in other situations like taking a loan to purchase a car or a finance lease. A no-down-payment lease essentially allows you to put your capital to better use.
Value-added Services and Fleet Management
The effectiveness of a car lease isn't restricted to how much it costs you. A good car lease comes as a complete package, with value-added services that help you have a fulfilling experience with it.
From services such as maintenance, insurance, 24x7 roadside assistance, vehicle pick-up and drop, to regular follow-ups and preferential rates at workshops during repairs - a good car leasing partner will take the load off your shoulders, and keep surprise expenses at bay, as their costs are included within your monthly lease rentals when contracted for.
When it comes to businesses, fleet management services can take care of the ongoing support that every fleet needs. From drivers' support to effective tracking, monitoring and optimising usage via the My ALD App Driver App and Web Portal.
A car leasing partner like ALD brings you proven expertise, digital solutions and effective consultation services like TCO analysis and car policy reviews to help you bring out the best in your company car fleet.
ALD places a key focus on customer service and support with fully implemented Business Continuity Planning, effective complaint management systems and a successful time-adherence record on deliveries and services.
A part of the Société Générale Group, ALD India (ISO 9001:2015 Certification) drives a collective experience of providing car leasing and fleet management services in over 43 countries across the globe, and over 900 corporates and 280 locations in India. Backed by a robust global network, ALD is powered by innovation and strives to build effective mobility partnerships.
To sum up, it is a combination of these factors that make up a good lease. While cost is the primary concern for any business, evaluating the peripherals can help you see the broader picture, and derive good value from your car lease. At ALD, we're constantly working towards building effective partnerships with our clients, so that you can get the most out of corporate mobility. It’s not just us saying it, you can hear from our clients too.