Full-service rental vs finance lease: which suits your business?

What is a finance lease?

A finance lease, or leasing, is a financing method in which the company pays for the vehicle in instalments and becomes its owner at the end of the lease after paying the residual value. A down payment is usually required, and maintenance, repairs, tyres and insurance are the company’s own cost and responsibility.

What is full-service rental?

Full-service rental is an operating lease with added vehicle-related services. The company pays one fixed monthly payment that covers the use of the vehicle and the services. At the end of the rental period the vehicle is returned – no need to worry about selling it or loss of value.

Comparison

When to choose full-service rental?

• You want a fixed and predictable monthly cost without unexpected bills.
• You don’t want to tie up working capital in a down payment.
• You don’t have the time or wish to deal with maintenance, tyre changes and insurance.
• You want to replace the vehicle with a new one every few years.
• You need a vehicle for a shorter time or flexibly.

When might a finance lease be suitable?

• You want to keep the vehicle at the end of the period.
• You use the vehicle for a very long time, longer than a typical rental period.
• You already have your own arrangements for maintenance and insurance.

Accounting and taxes

The accounting and tax treatment of finance leases and full-service rental differs. Before deciding, we recommend checking your company’s situation with an accountant or tax advisor.

Summary

If predictable costs, flexibility and a low administrative burden are important to you, full-service rental is usually the more convenient choice. Request a personal offer from Schnell – we will prepare it based on your needs.