If you decided that vehicle leasing was the best option for your company vehicles, you were probably opting for manageable monthly payments and payment schedules, tax benefits, and risk management. When your vehicle leasing contract is coming to an end, it is just as important to weigh the benefits of each of the lease-end options to ensure you are making the most strategic decision for your business. There are several ways to manage the completion of your current vehicle leasing contract. Each option has its own advantages, let’s review your choices so you have all the information you need to make a smart plan moving forward.
Whether you are looking for vehicle leasing or loan options, we can accommodate the financing you need to obtain the commercial vehicles you require to grow your business. Learn more about First Capital vehicle financing solutions here.
Extend Your Lease
Many lessors can offer you the option to extend your lease at the end of your original term. This is beneficial when you are happy with your current vehicle and have kept the mileage low. It can also be convenient when you do not have a new vehicle lined up or you are waiting on your next vehicle due to shipping or supply delays. Your lessor may offer you a month-to-month extension or a term extension of up to one year. Usually, your vehicle leasing terms will stay the same. If you want to extend your lease beyond a year, speak to your lender, they may be willing, but might want to explore depreciation, mileage, and buyout clauses and set new lease terms.
Buying the car outright at the end of the vehicle leasing contract is very typical. This allows you to purchase the vehicle at an amount based on the residual value, remaining payments (if any), and possibly purchasing fees. This option makes sense if you are happy with your vehicle, you have the cash to make the balloon payment, or you might be able to sell the vehicle privately for more than the cost of your buyout. Do your research on current market value before meeting with your lender.
For many companies, having newer vehicles is beneficial for their business. The appearance of up-to-date, technologically-advanced, undamaged cars, trucks, and vans can make a statement, and newer vehicles typically mean fewer repair costs and concerns. If your vehicle leasing contract is ending and later model vehicles are important to you, consider trading in for a new vehicle and a new vehicle leasing contract. This option will allow you to upgrade to the most current model or a completely different make and model. And if you have a solid payment history with your lender, you could be in a strong position to negotiate favourable terms on your new vehicle leasing contract. Leasing a new vehicle with the same lender can also result in leniency if your trade-in has some minor damage or kilometres over the limit.
Of course, the option to surrender the vehicle to the dealership or lender at the end of your vehicle leasing contract does exist. You are under no obligation to renew your lease, upgrade, or buyout at the end of your lease term. This option might make the most sense if your commercial vehicle needs have changed, if you were unhappy with the vehicle or the lessor, or if you would like to explore your options with a different lender. Be aware that there can still be fees associated with this option if the vehicle has sustained more damage than typical wear and tear, or if the kilometres are over the allowable limit.
If you are just at the beginning stages of exploring your options for securing commercial vehicles for your business, read Is Vehicle Leasing or Vehicle Financing Better For Your Business.
There is not a one-size-fits-all strategy for dealing with the end of your vehicle leasing contract. Your financial health, the evolving needs of your business, and your operations can all play a role in determining your best lease-end strategy. Now that you understand the most common lease-end approaches, you have the information you need to make a smart decision for your company.
First Capital is the choice leasing partner for all of your business’s commercial vehicle leasing and commercial equipment leasing needs. Read more about the benefits of leasing and the common mistakes of leasing to make the most informed purchasing strategy decisions for your company.
First Capital Leasing is a full-scope financial services provider with the knowledge and experience to create tailored financing solutions that meet your needs and your goals for your company. We can help you figure out which strategy can support your current operations now and in the future. We are based in Calgary, but serve business across Canada. For easy application and quick approval, fill out our online application. You only need to apply once and First Capital leasing will continue to be your financing partner for all your business equipment needs. Approval can usually be completed in less than 4 hours!* If you are ready to explore loans and leasing for your business, call our team at First Capital Leasing at 1-888-251-3644 or fill out our contact form today.
* Subject to credit approval.
Q: Are there restrictions to the type of vehicle I can lease?
A: Most financial institutions have stringent restrictions on what can be financed. However, at First Capital Leasing, we will work tirelessly to get you the commercial truck or vehicle your business needs regardless of the year, hours, or kilometres, including water trucks and tankers. We can also accommodate any supplier(s) and auction house, as well as private sale transactions to ensure your business has the vehicles it needs to thrive and grow.
Q: How does my business explore commercial vehicle leasing with First Capital?
A: Our process is simple:
Q: What are the benefits of choosing First Capital Leasing
A: If commercial vehicle leasing is the right option for your business, partner with First Capital Leasing to make purchasing your vehicles easy. With over 85 years of combined experience in commercial vehicle leasing, we have the knowledge to provide you with the right vehicle leasing solutions for your business. The benefits of partnering with First Capital for vehicle leasing include:
We'd love to have the opportunity to understand your business and develop a strategy customized to your business' short-term needs and long-term goals. We boast a 95% approval rate through our vast network of underwriters (including a robust private portfolio).
Contact us at 1-888-251-3644 or complete the online contact form below. We look forward to connecting with you.