When it comes to leasing fleet vehicles for your business, there are two main options to choose from: open-end leasing and closed-end leasing. Each option has its own set of advantages and drawbacks, so it’s crucial to understand the differences between them to make the right choice for your company. In this article from Capital Lease Group in Brockton, MA, we’ll go over the four main points to consider when choosing between open-end leasing and closed-end leasing. Read on to learn more.
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What Is an Open-End Lease?
An open-end lease is a flexible option that allows you to pay only for the time and mileage used. With an open-end lease, there are no penalties for exceeding mileage limits or for early termination of the lease. This is ideal for businesses that have unpredictable needs, as it allows flexibility to add or remove vehicles from the fleet as needed. At the end of the lease term, the actual market value of the vehicle is evaluated, and the lessee is responsible for any depreciation that occurred beyond the estimated amount.
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What Is a Closed-End Lease?
A closed-end lease is a fixed-term lease that sets a mileage limit and often requires a higher monthly payment than an open-end lease. With a closed-end lease, the lessee has full control over their monthly expenses and is not responsible for the depreciated value of the vehicle at the end of the lease term. However, exceeding the mileage limit could result in additional fees at the end of the lease.
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The Benefits of an Open-End Lease
An open-end lease provides businesses with flexibility regarding the number of vehicles they lease and the mileage each fleet vehicle accumulates. With no penalties for exceeding mileage limits, businesses can adapt their fleets to meet the demands of the market or the needs of a particular job.
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The Benefits of a Closed-End Lease
A closed-end lease provides the stability of a fixed payment each month, which makes budgeting for businesses more straightforward. Additionally, the predetermined residual value of the vehicle provides businesses with predictable monthly payments.
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Vehicle Fleet Leasing With Capital Lease Group
Ultimately, your preferred vehicle fleet leasing options will depend on your business’s specific needs and priorities. To learn more about our vehicle fleet leasing, contact Capital Lease Group in Brockton.
