Managing the Financial Side of Commercial Fleets

3-Year Lease Preferable for Sedans, Donlen Says

September 18, 2014

Photo via Donlen.
Photo via Donlen.

Fleets should lease sedans for 36 months rather than 60 months to gain a better return on their investment and keep lifecycle costs in check, according to a new analysis from Donlen Corp.

The fleet mananagement company completed an analysis, called "Lifecycle Cost Management: 36-Month versus 60-Month Sedan Lifecycle Cost Analysis," that bolsters the case for three-year time frames to lease sedans. The analysis reveals additional lifecycle costs associated with extending usage of a typical sedan, said Amy Blaine, Donlen's vice president of consulting, analystics, and sustainability.

"This analysis compares real data based on our Donlen portfolio, and the findings identify how costs are impacted the longer you hold on to a vehicle," Blaine said. "Holding a vehicle longer to take advantage of declining lease payments and full depreciation may be viewed as a cost effective strategy, but the findings show that between the maintenance costs and missing the opportunity of higher resale values, along with lower fuel spend, the shorter cycle is actually more cost effective.”

The analysis includes charts and additional information that further analyzes lifecycle cost management, sedan lifecycle cost management, and overall annual cash flow comparison. Read the full report here.

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