Six tips to reduce the lease costs

Leased cars are usually a major expense for an average organization. But is it possible to save on these expenses? Yes, that's possible. 10% savings is easy to achieve. But how? Athlon is happy to tell you with six tips.

Tip 1: Take a critical look at the car scheme
A tight car regulation is the basis for a successful car policy and saves costs and time. But what is a good car scheme? It starts with clear and simple rules. And do you have insight into the number of kilometers for commuting? It is important to estimate this in advance and also plays a part in the choice of fuel.

Tip 2: Consider central purchasing
With a central purchasing method, the lease company chooses the dealer where the new car will be purchased. This provides clarity to the employees, because they know where they stand.

Tip 3: Athlon e-Driver
Athlon e-Driver is an online platform for behavioral change. Athlon's mobility program is aimed at reducing damage costs, fuel costs and CO2 emissions. Athlon e-Driver offers tools for optimizing policy and safety culture, a training and information platform and provides insight by monitoring and securing results.

Tip 4: Outsourcing administrative activities
By leaving the administrative matters regarding the lease cars to the lease company, you allow the contact between the lease driver and the company to take place immediately. This saves a lot of time for you as an organization. Matters such as maintenance, repairs and reports are now handled directly.

Tip 5: Use the Service Track application
The Service Track application is an online guide with selected garages that offer one or more extra services. This includes a free pick-up and delivery service, an appointment within five working days or an interim check without an appointment. This application works simply on the basis of license plate, zip code and city. This saves you costs on renting replaced transport or picking up and bringing employees to and from the garage.

Tip 6: Facilitate drivers who do not drive privately (less than five hundred kilometers)
Does a lease car driver drive less than five hundred kilometers privately with the Lease Cars Nz, so that additional tax is avoided? This group of lease drivers use less fuel. They also reach the maximum mileage later, so that the time to replace the lease car is postponed. As an organization, they can offer an appropriate mobility solution for private use, so that you stimulate business (economical) lease behavior.

Lowering lease costs for an organization can be achieved with a few adjustments. If you still want advice, Athlon as a leasing company is a suitable partner for all mobility issues.

Avoid Car Loan – Lease the Car

In one of my blog, I explained the difference between Productive Asset and Non Productive Asset & I suggested, not to invest in Non Productive Assets…There is one more class of Asset & it’s called Depreciating Assets. Your 4 wheeler i.e. Car falls in this category. The assets in this category neither appreciate nor give any regular returns or helps in savings. The investment in this asset class depreciates over a period of time. On top of it, if u buy any such asset by availing loan then it’s a huge Financial Loss/burden. Always avoid Car Loan and Car should be purchased from own fund sources. Reference

In western countries there is a concept of Car Leasing; it was recently launched in India by Mercedes Benz & also offered by many small time operators in Metro cities…Under this scheme, you don’t buy a car from manufacturer or Lease agency but you lease car for fixed duration e.g. 7 years & pay fixed monthly rent to company for leasing the car…In a nutshell, you are not the owner of car but only hiring the same…Now you must be wondering, how it helps company, Answer is simple company claim/book depreciation @ 15% p.a. in its book so virtually in approx 7 years, company claim full upfront cost as depreciation, simultaneously it earned X Rs rent per month & after 7 years company will sell the car for Y amount therefore rent received per month and amount received after sale are returns/profit on investment. This concept is  currently in nascent stage in India but will definitely be a big hit in future.

Now how customer will benefit from leasing, to understand this lets take 2 scenarios

Scenario A: You bought mid-range car for 5 Lac Rs @ 13% p.a. interest for 4 years & you intend to sell the same after 4 years (90% of cars are being sold after 4 years of use). You need to pay approx EMI of Rs 13500 per month

Scenario B: You leased mid-range car of 5 Lac Rs @ 4k rent per month for 4 years

In Scenario A, for 4 years you will pay EMI and total outflow will be 6.42 Lacs (Principal: 5 Lac & Interest: 1.42 Lac). Now at the time of Sale, you can expect approx 2.5 Lac as Sale value after 4 years depending on city & car condition..Therefore for 4 years, you spent or rather say lost 3.92 Lacs i.e. whooping approx 1 lac per year. If you buy car from your own funds then u can reduce this loss by 1.42 Lac i.e. interest you paid on loan amount. Loss of 3.92 Lac amounts to Rs 8166 per month. In other terms it’s a financial loss per month.

Therefore Car Lease NZ is anytime better option compared to purchasing Car on Loan..If u buy Car from own funds then also Car Leasing is much more profitable scenario for you becoz instead of spending 5 lac upfront, u will pay on monthly basis & you can earn some returns on diminishing 5 Lacs (after adjusting monthly rent), which u would have paid upfront if u would have bought your own car.

The Loan should always be availed for building productive assets rather investing in Non Productive (Gold) or Depreciating Assets (Car)…Although, the mindset in India is to OWN but lets not be emotional while making such decisions rather we should be practical in our approach & save Xtra from where ever its possible.
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