The Pros And Cons Of Open Ended Vehicle Leasing

If you own a business and you need to purchase a number of vehicles, you may be considering leasing the cars. This helps you get the cars you need without having to actually buy them and pay a large amount of money for car payments each month. When you are looking to lease commercial vehicles, you have the option of leasing using closed end vehicle leasing, which is the standard leasing option for private car leases. But you also have the option of an open ended vehicle lease. Learning the pros and cons will help you determine which option is better for you. Here are a few of the pros and cons of an open-ended vehicle leasing when leasing commercial vehicles:

The Cons of Open-Ended Vehicle Leasing

  • You Run the Risk of Owing Money on the Cars

The biggest difference between open and closed ended vehicle leasing is that you assume the depreciation risk with an open-ended lease. When you are done leasing the vehicle, the leasing agency will sell the car. If the car depreciated more than the payments you made, you may be on the hook for the difference in the original cost of the car less any payments you made and what the car sold for. 

  • You Don't Know What You Will Owe if You Decide to Buy the Car

The other downside to an open ended vehicle lease is that if you decide to buy the car at the end of the lease, the price for the car is set based on blue book value at the time. When you do a closed ended lease, the amount is pre-negotiated ahead of time, so you know what it will cost. 

The Pros of Open-Ended Vehicle Leasing

  • You May Wind Up Getting Money Back if the Car Sells

While you assume some of the risk when you do an open ended vehicle lease, there is an advantage to assuming the risk. If the car doesn't depreciate that much during your lease period, and it sells for more than the value of the car plus your lease payments, you may get some of the money back. For example, if the leased car's value was $25,000 when you leased it, and you made lease payments in the amount of $5,000 and the car sells for $23,000, you may get $3000 back from the leasing company. 

  • You Have More Usage Options

The other benefit to an open-ended vehicle lease is that you have more options than with a close-ended lease. You aren't restricted to mileage rules and you can often sell the car after shorter periods of time, such as 12 months, compared to the 24 to 36 months with a closed lease. 

An open-ended lease gives you more options when leasing a car and even allows you to possibly make some money. But, you can also lose money if the car significantly depreciates. If you don't want to take this risk, a close-ended lease may be better for you. Learning the differences among the two options will help you determine which one is better for you. 

Contact local commercial vehicle leasing agencies for more information and assistance. 


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