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Vehicle Fleet Definition – Entrepreneur Small Business Encyclopedia

Does your business need a company vehicle for making deliveries,
traveling to clients’ offices, carrying equipment and more? Whether
buying or leasing a vehicle is more advantageous for you depends on
a variety of factors. And if you need several cars or vans for
salespeople or delivery drivers, you may be eligible for fleet
leasing programs that can save you big money.

Leasing a small fleet of cars, minivans or pickups is easier and
more advantageous than ever. Businesses that buy or lease 10 or
more vehicles qualify as commercial fleet buyers and are given a
fleet registration number (obtained through the dealer), entitling
them to all available manufacturers’ and dealers’ fleet incentive

While manufacturers have always offered attractive discount
programs to commercial fleet buyers, there have rarely been such
programs for the small fleet lessee requiring fewer than 10 cars.
Nowadays, however, many dealers are beginning to offer their own
programs to business owners and will work with you to get your
business. In fact, some dealers can get you a fleet registration
number even if you lease only a few cars.

To decide whether fleet leasing is for you, sit down with your
accountant and estimate what it will cost, taking into account
monthly lease payments, insurance, gas, oil, maintenance and
license fees. Will you need to hire someone to manage the fleet? If
not, how will you keep tabs on regular tune-ups and administrative

You may decide it’s more economical to give your employees an
allowance and have them lease their own cars. These and other
questions should be put to your accountant before making a decision
on fleet leasing. Always check to see what the penalties are for
terminating a lease early, especially if your cash flow tends to
fluctuate from month to month.

The typical considerations of leasing are multiplied when you
lease several vehicles, so consider these possible pitfalls before
you sign on the dotted line:

  • Higher insurance coverage. Some dealers
    require you to increase your insurance coverage since they, not
    you, own the leased vehicles. Shop around for prices before you
    order your fleet because insurance can amount to a lot of money. As
    a business owner, you can probably get a blanket policy to cover
    both your business and your fleet.
  • Overextending your hard-earned bucks. Six
    shiny new vehicles in your company parking lot may boost your ego,
    but do you really need them? It’s easy to get carried away when
    ordering a fleet, so make sure you have analyzed your needs
    thoroughly before signing on the dotted line.
  • Neglecting to ask about mileage limits.
    These can vary radically and can cost you as much as 15 to 20 cents
    for each mile you drive the car over the limit. If you cover 50,000
    miles a year, it pays to buy rather than lease.
  • Failing to compare buying price with lease
    Dealers may have vehicles on the lot they are anxious to
    get rid of and will give