Leasing is more and more democratized in the automotive sector with many offers, but how should you manage car leasing?
Dealers and car rental agencies no longer hesitate to diversify their business model to meet the new needs of consumers. Indeed, some users and drivers are now turning more to car leasing, to the detriment of buying a car. The following article analyzes car leasing.
What is car leasing?
The definition of a car leasing is a monthly paid rental agreement. An English term democratized in the automotive industry, car leasing is generally associated with two types of leasing offers: long-term leasing and leasing with purchase option. With prices adapted to each one, a plethora of cars on offer and flexible contracts generally ranging from one to five years, car leasing has thus become an important part of the rental business.
However, car rental companies may encounter certain problems with car leasing. What are the advantages and disadvantages of this alternative to the acquisition of an asset? What type of leasing offer to choose? How to optimize the management of car leasing? So many questions that we will answer in this article in order to guide you towards the best practices to adopt.
What are the advantages and disadvantages of car leasing?
Car leasing has many advantages but also some disadvantages. It is necessary to know and measure these risks for the proper management of car leasing. In terms of advantages and benefits for the consumer, leasing allows the driver to drive with a recent car and to renew it regularly without his bank account having to suffer. Indeed, credit obligations are not mandatory, and the monthly payments required for a car lease are generally lower than a traditional credit. Your company thus has an extremely flexible offer to meet specific needs and adapt continuously to your customers’ budgets.
Nevertheless, abuse on the part of the user is possible. The user may drive far more than the recommended mileage or damage your car during the term of the lease contract. Moreover, in leases with a purchasing option, the driver remains free to buy or not to buy the car. A miscalculation of the quotation on your part can thus lead to unprofitable gains. This financial loss may be due to the maintenance, assistance and insurance costs incurred and the loss of value of the car at the end of the leasing contract.
5 car leasing management tips
There are therefore 5 essential and practical advices to implement in order to ensure the proper management of car leasing and to make its rental activity profitable:
– It is important to stipulate in your long-term car leasing contracts a limited amount of mileage in order to avoid any abuse. It is therefore necessary to set up indemnities for any excess of this mileage limit. The same goes for any fines and damage to the car identified in the inventory of fixtures, which must be billed accordingly.
– The proper maintenance of a fleet is essential for its profitability and the safety of drivers. Provide each of your customers with a listing indicating which cars require maintenance, the reason and the due date. This is one of the cornerstones of car leasing management.
– In long-term car leasing, it is not uncommon for drivers to encounter breakdowns, maintenance or even an accident. Anticipate therefore the possible fixed assets of your customers by putting a part of your fleet dedicated to the loan of relay car. The long-term contract must take into account the mileage achieved with the car.
– The management of car leasing requires good cost control. Make sure you know the residual value of each of the cars in your fleet in order to control their profitability. Therefore, provide your customers with a precise estimate calculating the mileage and the rent thanks to a conscientious quotation. It is also advisable to provide the driver with a schedule at the beginning of the lease for the entire duration of the long-term contract, taking into account any rent increases.
– Finally, opting for a car leasing software will certainly save you time and efficiency. This management tool will allow you to manage car leasing with more flexibility and precision thanks to numerous functionalities dedicated to this activity. We detail this below.
Why choose car leasing software?
In order to digitize its activity and meet the challenges of tomorrow, it is important to choose the right car leasing software. This is why hitechsoftware has developed myrentcar, the reference long-term leasing management software package. Myrentcar is a web solution accessible online simply via a computer, a tablet or a mobile application. Equipped with a complete schedule and adapted functionalities, the myrentcar car leasing solution considerably optimizes the management of long-term leasing.
In just a few clicks, myrentcar makes it possible to manage all the rental cycles, from reservation to invoicing, including accounting and direct debit management. In addition, the myrentcar car leasing management application offers effective analysis tools to monitor its activity in real time and calculate the residual value of its cars precisely. Compatible with the quotelio long-term quotation system to enable you to calculate and send accurate quotes to your customers, myrentcar also produces personalised invoices taking into account additional costs.
The implementation of a software or ERP system is therefore a key step in the proper management of car leasing. This allows you to really make this specific activity profitable and control the costs. This is why myrentcar meets all the needs of long-term car rental and today manages several thousand leased cars. Do you also wish to optimize the management of long-term leasing? Find out more about myrentcar’s car leasing management solution here.