With contract hire that ultimate control is lost. There are charges if a contract is terminated early. Or if agreed mileages are exceeded.

What sort of companies benefit from sale & leaseback?

Usually they are companies that have not considered the value of leasing before. The decision often reflects a change in direction for the company concerned, which has tipped the balance against the benefits of outright purchase.

For example, the company may no longer be able to field the personnel and resources to administrate the fleet and control operating costs.

Alternatively, a change may have taken place in the company’s financial priorities. They might want to remove company vehicles from the balance sheet and benefit from improved credit lines.

Companies that choose sale & leaseback should expect financial, HR and operational support from the fleet management company.

It is important not to look on sale & leaseback as simply a cash flow release mechanism but rather as part of a coherent fleet strategy for the company moving forward.