In the market for cars for your sales force? Delivery vans? Executive vehicles? Whatever the need — and whether your business uses a few cars or hundreds — you should know how leasing and fleet management can affect your company’s bottom line.
   Leasing rather than purchasing can provide greater flexibility and control over maintenance, mileage, trade-ins and taking vehicles in and out of service.
   To determine if leasing is right for your company, ask yourself:

• Am I getting the most tax and financial benefits out of company vehicles?
• Are we wasting time selecting, servicing and managing the fleet when we should be focusing on core business sales and service?

   If you operate a few vehicles in a single location — and you have a good relationship with the company that sells and services the vehicles — you may not need to move into leasing.
   If your needs are more complex — for example, your company has grown and you’re spending too much time on fleet management — you should talk with experts about the “Three C’s” of fleet leasing — Cost savings, Convenience and Control.
   Leasing has several cost benefits, including 100 percent, off-balance-sheet financing. The payments don’t appear as a liability on your balance sheet, which may increase your credit availability.
   Further, there may be tax benefits. For example, it may be more advantageous to deduct lease payments than to depreciate an owned vehicle. Ask your tax adviser about these tax issues.
   Up-front costs for customization can be financed as part of the lease, avoiding separate purchase and installation.
   Many employees may prefer to drive company vehicles rather than use their personal cars, and this may help you attract and retain skilled, experienced workers.
   Further, you can control what types of vehicles represent your company while you ensure proper maintenance to preserve the fleet’s value and minimize breakdowns.
   Do you need the services of a fleet-management company?
   If your operations are simple you may not need management help. If your operations are complex — service vans, delivery vehicles and cars in several areas — you may need fleet management services to help with selection, titles, taxes, insurance, maintenance and other issues.
   A fleet management provider can build a program tailored for your needs, can be your single source for vehicles from several manufacturers and can help you decide whether open- or closed-end leasing is best for you.
   Open-end leasing provides flexibility in financing, selection, administration and replacement timing. If you have limited needs, closed-end leasing can be a cost-efficient option. Here’s how they differ:

• Vehicle selection, options, equipment: With open-end leasing, a single source can provide any make or model vehicle. With closed-end leasing, selection and options may be limited, and you may have to work with multiple sources.
• Acquisition: Up-front costs of open-end leases are limited to tax, license and title fees. Closed-end leases can include down payments and deposits.
• Lease terms: Open-end lease terms are flexible, with no mileage or wear restrictions, and you can terminate without penalty after 12 months. Closed-end leases may have more limited terms, including penalties for early termination.
• Maintenance: Maintenance programs and reporting are available with open-end leases. In closed-end leases, the lessee is responsible for maintenance.

(Editor’s Note: William H. Schenck manages Commercial Banking for Wells Fargo in the Tacoma, South Sound and Kitsap Peninsula areas.)