Advantages and disadvantages to fleet vehicle ownership have to be fully examined before taking actions and opting for vehicle purchase or rental. There is no perfect choice or one-size-fits-all when thinking about buying fleet vehicles or choosing different acquisition options: the idea is that you fully examine benefits and downsides according to the specific needs of your fleet and company.
Generally speaking, fleet vehicle ownership offers these benefits to companies that opt for it:
• Investment. If you have unused capital, you can think about purchasing new vehicles without having to service loans or overdrafts. You may be able to access certain tax benefits.
• No limits to your mileage. If you own your vehicle, you can have it driven without any mileage restriction; just remember that higher mileage can reduce resale value. But if you thoroughly document the life of your vehicle with the available technology, you might gain an added advantage when it comes to reselling.
• Used vehicles. You can choose to spend less and buy used vehicles, though you need to check their conditions thoroughly.
• Wide choice of make, models, suppliers and specialised vehicles. Purchasing might mean better access to specialised vehicles in comparison to hiring.
Cons and downsides to fleet vehicle ownership:
• Locked-in capital. You might choose alternative options for spare or available capital or have a cash flow crisis and any spare capital may already be invested in procuring vehicles.
• Full responsibility for maintenance and compliance. When you own vehicles, you are responsible for doing everything that needs to be done to keep them on the road, from servicing to compliance. This is often a burden forcing companies to outsource compliance work or making them choose rental, but nowadays there are technological solutions available.
• Lower prices to resell/dispose. There is no guarantee you can resell a vehicle at an advantageous price for your company. Also, if you hold on to vehicles too long, their extended life can force higher cumulative expenses (though, this is not always necessarily the case).
• Complying with different/seasonal demands. You might own vehicles that are not necessarily needed throughout the year, so in some cases it become challenging to optimise vehicle use. A fleet management solution should mitigate these issues, but opting for rental may be the best option in these cases.
Whatever you choose, make sure you examine all the options, taking into account your specific fleet expectations and requirements—there is no universal solution valid for everyone, just the one that best suits your fleet.