Leasing Used: Possibilities and Pitfalls
Leasing used fleet vehicles makes sense if you are flexible with model selection, you can budget for unexpected repairs and your employees aren’t emotionally attached to their cars.
You're a savvy business owner or fleet manager who wants to make every penny count. Or you're recovering from a financial setback. Perhaps you've hired an employee on temporary assignment who needs a car. All of these are reasons to consider leasing a used vehicle.
Of course, there's some risk involved. The car, van or truck will be used, so you'll need to know its history: Was it involved in an accident? Did the previous owner take good care of it? And, going forward, what can your leasing company do to ensure the car is in good shape?
While it's helpful to know you can lease used cars, the question is, should you lease them? Do the advantages outweigh the disadvantages? BF spoke to four leasing companies to gather the information you'll need to make that decision.
How It Works
For fleets that are open to the idea of used vehicle leasing, leasing companies will locate late-model, low-mileage cars from Web sites, auctions and rental car companies. After checking them out, collecting maintenance records, looking at Carfax information and reconditioning them, they offer the used car to fleets. Some leasing companies keep used vehicles in inventory; others will locate them on demand.
Ben Carfrae, CVLE, of Ruan Car Leasing in Urbandale, Iowa, has one client with a fleet of 75 cars—all used. "With 75 used cars, you have to rotate the stock and have a new vehicle ready for them when one of theirs reaches 60,000 to 65,000 miles," he says. "We're constantly looking for cars for them."
Tim Lewis, managing partner of Central Sales & Leasing in Los Angeles, Calif., adds, "We'll call our clients if we find a nice used unit: 'I've got an F150; do you want it?'"
Leasing companies have experience locating used cars, but it may take a while to find a particular model in excellent condition. "A new car can be ordered to specification, but not a used car. It takes time to find the right used car," says Jeff Barron of Ellis Brooks Leasing Inc. in San Francisco, Calif.
Still, if a business owner or fleet manager doesn't need the vehicle immediately, it never hurts to ask for the leasing company to keep an eye out for the desired model.