Benefits to Leasing Commercial Vehicles

A vehicle or piece of equipment may be the lifeline of your business. So making sure its acquisition and lifecycle are planned strategically could be the difference between turning a profit or just getting by. At Pfaff Leasing we understand the commercial market and can offer sound advice and solid strategies to make sure you’re well-positioned while operating your business. Listed below are some of our top benefits of leasing your commercial equipment. 

Cashflow Strategy 

Running a business has its fair share of challenges including cash flow. When acquiring a vehicle or equipment, minimizing your monthly outlay helps you free up cash flow to fund other projects or perhaps acquire another piece of machinery to grow your business. A properly structured lease can offer you the flexibility of a lower monthly payment when compared to traditional financing, yet still, allow you to acquire and own the asset if you so choose.   

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Flexibility Options 

We recognize that business needs change frequently including if large contracts are awarded or perhaps you pivot into some different offerings. These kinds of situations may require your vehicle and equipment needs to change for your business. The benefit of a properly structured lease is that you may be able to make a change that suits your new business needs seamlessly.  

Budgeting and Forecasting 

When planning a yearly budget or forecast for future years it is nice to have stable numbers to plug in while planning. If your fleet is comprised of leased vehicles, you can simply plug that vehicle expense in, and you’ll know how much to budget for. If your strategy is to rotate into a new vehicle once your lease is up, then you can minimize the amount of unknown maintenance and repair expenses that can pop up while operating an aging fleet. 

Full-Service Options 

A fleet manager can be invaluable when operating a vehicle or equipment fleet. There are many benefits to operating a fleet that is properly managed including saving money but more importantly minimize downtime. If your vehicle isn’t working it is not making money for you. Unfortunately, a fleet manager can add a heavy expense to your bottom line and if you take it on yourself it will eat up valuable time that can be spent running your business. We offer full-service options that help manage your fleet with maintenance and fuel cards, electronic logbooks, telematics, and monthly reporting. We can tailor a program that works for your fleet and allow you to focus on your business. 

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Mileage Strategies 

When operating your business, you wouldn’t want to limit yourself from making that big delivery or adding another route to your day simply because you may go over your allowed KM’s. A properly structured lease will eliminate that worry and let you operate worry-free.     

Minimal Sales Tax Consequences

When considering tax strategies, a lease offers many benefits. One of the biggest benefits is that you pay tax monthly instead of all upfront. When financing or paying cash for a vehicle the entire tax amount is added to the price and paid up-front or financed into your payments. A lease is calculated differently, your payments are determined then the tax is added to the individual monthly payment rather than paying all of your tax upfront. As well you’ll benefit from deferring the tax on the residual until the end of the lease. Another benefit is that generally a commercial lease can be entirely written off as a business expense. We recommend you speak with your accountant regarding your specific situation as this may vary. 

There are many benefits of leasing a vehicle or equipment for your business and Pfaff Leasing is positioned to help offer you expert advice with a well thought out strategy. Our Toronto, Vancouver, Calgary, and Montreal offices would love to discuss your needs and help design a solution that works for you and your business.  

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