Editor's Page

To lease or own.

This problem has perplexed fleet men ever since cars were first used for business purposes.

There is no direct, simple answer to the question of company or salesmen ownership vs. the leasing plan.

But an approach to the question would be to analyze individual needs and requirements of a particular company. For some businesses, it is more advantageous to lease; for others, company ownership is the best policy.

This issue of Automotive Fleet contains a series of articles by an outstanding panel of leasing experts. Naturally, they expound the virtues of leasing. This is as it should be. They are top men in the leasing field. They have been in the business since its inception. Still, there is another side.

Company ownership has certain distinct advantages. There are also drawbacks. For one thing, a company that owns a car has COMPLETE control over the vehicle from the time of its purchase until it is sold - or junked. It can do as it pleases with the car - as long as it is willing to assume the cost.

Conversely, with ownership, a company must stand the full burden of depreciation. And maintenance. And repair.

I believe the problem, while a little more complex, is similar to the merits of owning a home vs. renting an apartment. I have many friends who expound the joys of home ownership. Others feel that nothing beats an apartment. Both groups are happy.

Time, I believe, is an important element in the question of leasing vs. ownership. For the fleet that keeps its cars from four to seven years, company ownership is probably the best course. For the firm that trades its cars every year or two, leasing can be a good policy.

Money is another factor. For firms that, would rather use the money that it takes to buy a full fleet of cars for capital investments, nothing can beat leasing. On the other hand, where the use of money for capital investments is not important, ownership is the best course. This is particularly true for utilities, police and governments and municipalities.

Space and service is another area that should be a consideration. Many firms cannot stand the expense of setting up a full maintenance shop. For others, it would be impractical because their cars are spread out over a wide area.

Bookkeeping and cost control must also be considered in studying the question of leasing or ownership. A leasing company normally handles licensing, titles, registration renewals and local tax-matters. This could prove to be an expensive chore for the company that has a small accounting department. On the other hand, these chores eliminate "idle time" for the firms that have large accounting or administrative staffs.

There are many other variables that enter into the question of leasing or ownership. Pros and cons can be drawn for both sides. Suffice it to say that leasing is a growing industry - a billion dollar industry. I'm sure it will never replace full ownership, but it will continue to grow in the years ahead.