Your call: it's up to you to buy or lease, but do your homework first

Entrepreneur, Dec, 2003 by Jill Amadio

LEASING A FLEET OF VEHICLES for your business instead of buying them offers advantages. A major benefit is being able to leave capital in the bank, since leased cars and trucks typically require only the first two months' payments to initiate the lease. Payments for leasing are lower than for purchasing, too. You're also using the new car or truck for the first few years of its life, which are the most reliable and are under warranty. When your lease expires, you can roll it over to lease new vehicles, or you can buy the vehicles outright.

Buying offers advantages of its own. If you buy, you can drive your vehicle as much as you like without the mileage penalties leases impose. And when you've paid off the loan, you own the car free and clear instead of having to pay a residual price to buy it.

Deciding whether to lease or buy requires research and comparison. Whichever you choose, the bulk of your costs will be determined by the vehicle price, so to cut costs, start with a less-expensive model. In addition to the vehicle price, don't forget to consider related costs such as interest, sales tax and licensing, as well as ongoing operating costs such as fuel, insurance, repairs and maintenance.

Research may sound daunting, but there are dozens of fleet leasing, financing, management and consulting companies that can help. Among them are AutoFleet (www.autofleet.com), which, with partner Jefferson Leasing, guides business owners through the leasing and management process; Fleet-Central (www.fleet-central.com), which has a site filled with articles on topics such as how to manage a fleet fuel program; and PHH Arval (www. phh.com/fleetservices), which offers a wealth of fleet management tools.

Auto manufacturers and auto dealers also have programs to make acquiring, servicing and monitoring your fleet easier. GM's FleetTrac program (www.gmfleet.com) provides information on topics such as incentive programs and competitive comparisons. At Ford (www.fleet.ford.com), you'll get a breakdown of life cycle costs, safety ratings and specs on more than 200 vehicles. Dodge's BusinessLink program (www.dodge.com/businesslink) tailors finance terms and combines payments for your vehicles into one monthly statement. Chrysler's Commercial Finance Options program (www.chrysler financial.com/commercial/index.jsp), which also finances Dodge vehicles, will work with you whether you have one vehicle or a fleet of 50-plus.

Remember, always ask about any incentive programs. Whether they're called rebates, cash-backs or bonuses, incentives can help your bottom line.