There is no one perfect solution for getting the commercial vehicle or fleet of vehicles your business needs to optimize operations. Many businesses struggle to balance cash flow and the expense of purchasing the vehicles they need. If you are seeking a vehicle acquisition strategy that preserves your capital and maximizes your buying power, consider commercial vehicle leasing and commercial vehicle financing. Both of these strategies have benefits, but which one is ideal for your business?
Whether you are looking for a lease or loan option, 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.
Vehicle Leasing vs Vehicle Financing: What Is The Difference?
Vehicle leasing and vehicle financing are two different forms of commercial vehicle acquisition.
Basically, the difference is:
- When financing a commercial vehicle, you are borrowing the money to purchase the vehicle. You make regular payments to the lender. When the loan is paid in full, you own the vehicle outright and can do with it as you please (sell or keep).
- With vehicle leasing, you are essentially renting the vehicle from the lessor for the term of the lease agreement. When the term is up, you may either surrender the vehicle to the lessor or purchase it at the price negotiated.
Vehicle Financing: The Pros
- Build Equity: Each loan payment moves you closer to owning the vehicle.
- Tax Deduction: A portion of the interest paid on the loan is eligible for tax deductions.
- Easier To Qualify: Because you are purchasing, the vehicle can be used as collateral to secure a loan if your business has less than ideal credit history.
- Fewer Restrictions: Because you own the vehicle, there is more flexibility to make any modifications and customizations that might be necessary for your business operations.
- Less Expensive Over The Duration Of The Contract: The long-term cost of financing is always less than the cost of vehicle leasing.
Vehicle Leasing: The Pros
- Lower Monthly Payments: Leasing agreements often offer lower monthly payments than financing agreements.
- Regular Upgrades: If current technologies and upgrades are important for your business, vehicle leasing offers the opportunity to trade in for the latest model at the end of each lease term.
- No Depreciation Burden: Unlike car ownership, the burden of depreciation does not fall on the business owner who opts for vehicle leasing. The terms of the agreement are set at the time the contract is signed and market fluctuations, etc. have no bearing at the end of the lease term.
- Tax Benefits: The entire relevant portion (the percentage of use that is business-related) of the lease payment qualifies for tax deduction.
- Shorter Contract Terms = Fewer Maintenance Costs: Vehicle leasing terms (typically 3-5 years) are often shorter than financing terms (5-7 years) resulting in lower maintenance expenses. Especially since the first few years of driving are usually covered under a manufacturer’s warranty.
First Capital Makes Vehicle Leasing Easy
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:
- Customized payment schedules that fit the cash flow of your business
- No kilometre restrictions
- No age restrictions
- Quick approvals (four hours or less) APPLY HERE
- Fast turnaround (documents signed and supplier paid is as little as 24 hours)
- High approval rates
- Lease To Purchase Options
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 in Calgary is a full-service financial services provider with the knowledge and experience to create tailored financing solutions that meet your needs and the goals for your company. We can help you figure out which strategy can support your current operations now and in the future. 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. 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.
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 KMs, 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:
- Choose the vehicle(s) and the seller of your choice. Confirm the full asset details, along with the cost.
- Complete our online application, which is instantly submitted to our credit team. Existing customers do not need to re-apply.
- Once approved, a First Capital team member will contact you to discuss your financing options. We will then contact your supplier to arrange for invoicing of the purchase. Documentation is then provided for your review.
- Upon receipt of all required documentation, our funding team will work on payment remittal to the supplier. We can accommodate any prepayment or deposit terms the seller requires.
Q: If my company is not based in Calgary or Alberta can I still use First Capital for my vehicle leasing?
A: Yes, while First Capital is based out of Calgary, our commercial leasing services are not limited to Calgary or Alberta.