Products & Services

Leasing

Companies are under pressure to find ways of reducing costs and as such there is an increasing need for companies to out source non-core business activities such as fleet related activities (Fleet Management). A. Instead of outlaying cash, which can be put to better use in the company, many companies have realized that an outsourced fleet solution is a strategic imperative. Many companies have realized that an outsourced fleet solution is a strategic imperative. B. Significant savings are enjoyed because of having a well-managed, well-maintained and controlled fleet.

Fleet owners benefit from the outsourcing of its fleet / transport operations primarily because of the opportunity cost of capital and resources. Companies can thus focus their time, energy, and resources on their core business.
The primary value of any vehicle lies in its usage, productivity and reliability rather than in its ownership. The following should be considered:

  • Cost to Procure – Studies reveal the cost to raise a Purchase Order amount to R550 per purchase order.
  • Maintenance Pilferage – Savings of up to 20% more than on owned solution.
  •  Admin and System – Access to Infrastructure and personnel costs at an agreed admin fee per vehicle per month.
  • Uptime and efficiencies – Owned fleet generally runs at a utilisation of between 60% to 70% whilst outsourced solutions run between 90% and 95%
  • Management Information Systems – Management is cluttered with info which is difficult to interpret and manage. Outsourced solutions manage the business by exception.
  • Image and Morale – Due to the owned fleet being run from cradle to grave, the fleet does not always portray a positive image to the public or its staff. An outsourced solution ensures that the fleet is renewed at optimal economic life.
  • • Cash flow constraints – Capex is utilised for non-revenue generating assets. Outsourced solutions enable business to invest cashflow into its core business activities.

Benefits of Leasing

  • Outsource risk (resale & maintenance)
  • Improved cash flow
  • Optimised procurement
  • VAT saving
  • Tax benefits substantially better than instalment sale
  • Maintenance controlled & cost effectively managed
  • No credit line marked
  • Ease of budgeting
  • Outsource administration (resources)
  • Lowest cost of acquisition funding method
  • Improved ROA & Gearing
  • Optimized efficiencies