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Sure. When considering whether to lease or own, the number of miles to be driven need not enter into the decision making process. High mileage may play a part in the eventual structure of the lease that will work best
for you but first you should evaluate the pure economics’ of leave vs. own from a tax and accounting standpoint. In addition, consider the differences if you are a lessee vs. an owner from an administrative standpoint. All other things being equal, many organizations will opt for leasing because of the reduced administrative burden, supplier/services networks and volume buying power of a fleet management company.

You certainly want to avoid the typical “consumer lease” (i.e. 36 months with low mileage) but a high mileage business-to-business lease can certainly be structured to meet your needs without having to pay excess mileage fees.

Answered by Robert Singer @ Wednesday, March 19, 2008 4:30 PM

Government fleets usually operate under an annual appropriation of funds basis so they are unable to commit to lease terms beyond 12 months and would not have resources to absorb a loss on sale of a vehicle if they were to be treated like an owner from a residual risk/benefit standpoint. Therefore, the closed-end lease structure most typically meets the funding restrictions placed on the government fleet entity. There are government fleets that do operate under an open-end arrangement but very few. Doing so requires the legislative bodies involved to commit to longer term spending and to assume residual risk.

Answered by Robert Singer @ Wednesday, March 19, 2008 4:30 PM

When most people ask about "flexibility," what they're really asking about is the ability to terminate a lease without incurring fees. And most people are surprised to find out that neither closed-end nor open-end leases are truly "flexible" in this sense. Closed-end leases typically have stricter terms--your lease is defined by a specific amount of time or mileage. If you go over on your time or mileage, you incur fees. Openended leases are based on anticipated usage--but this doesn't mean you won't be charged for going over on your anticipated usage. On the contrary: if you exceed your anticipated usage (thereby diminishing the value of your vehicle), you will still incur a fee. In both cases--open- and closed-end leases--you are charged for your actual usage. So, in terms of flexibility, there is no advantage with either type of lease.

Answered by Robert Singer @ Wednesday, March 19, 2008 4:31 PM

The automotive industry is in a state of flux. The lines between what defines a domestic product and a foreign nameplate continue to be unclear. Concerns with the global environment and changing consumer demands places tremendous pressure on manufacturers to constantly produce new vehicle models, however choosing the wrong technologies and features could be financially crippling. On the upside, the expansive growth of markets around the world are creating opportunities for growth in new markets and perhaps a testing ground for new technologies that will benefit all. For corporate fleets, the market uncertainties create a greater risk of exposure when selecting the right vehicles and forecasting residuals, making it increasingly difficult to control the total cost of maintaining and managing a fleet.

Answered by Robert Singer @ Wednesday, January 30, 2008 10:09 PM

Merchants Leasing is one of only three leasing companies that provide full insurance coverage. Beyond that, there are several differences between Merchants Leasing and other leasing companies. Primarily it is our service and commitment to our clients. Merchants Leasing’s owners are involved in the day-to-day management of the organization and we also benefit from having a relatively flat organizational structure. This allows each department to be responsible for making decisions and can quickly respond client requests.

Answered by Robert Singer @ Wednesday, January 30, 2008 10:07 PM