FlexLease Frequently Asked Questions

• What is open-end leasing?

  Holman redefined open-end leasing in Germany in 2017 with its FlexLease product, a flexible, full-amortization financing agreement.

   

  To put it simply, the differences between FlexLease and mileage-based leases lie in the Holman product’s flexibility and the settlement of sales proceeds. Flexibility means that you can easily extend or shorten the term of your contracts. Or that the number of miles driven does not have to be determined in advance. This is often very practical, as the exact use of a fleet is difficult to predict. In open-end leasing, it’s quite easy.

   

  1. Flexibility is built into the contract from the start. Instead of often non-transparent “calculations,” a repayment plan is agreed that is as transparent as possible. Since not every car is used the same, there is also an optimized, individual financing contract for each vehicle.
  2. During the term, open-end leasing offers reliably consistent monthly payments in which all services are clearly defined. The term is flexible beginning at as early as three months. After this time, the contract can be terminated at any time by settling the remaining debt—the vehicle belongs to you.
  3. After the end of the term, there is no deduction for loss of value with us, as no loss of value is reflected. You can continue driving the vehicle, sell it yourself or have us sell it. Regardless, the sales proceeds belong to you.
• What's the catch with FlexLease?

  There is none.

• What is a mileage-based lease?

  Mileage-based lease is another term for a closed-end lease. When German fleet managers finance their fleet, they often choose the lease they are familiar with—a mileage-based lease. Classic mileage-based leases seem to be the perfect solution: Choose runtime and mileage, done! It seems cheap and clearly regulated. Especially when requesting tenders, attention is often paid only to the cheapest leasing rate. But the devil is in the details, more precisely in the contracts. What seems cheap at the beginning can end up being expensive.

  Because only rarely is a car used exactly as planned. In this case, a mileage-based or closed-end lease can incur costs that are not always apparent at first glance in the contract clauses: Every extra mile driven costs more. But every mile not driven does not cost correspondingly less. These miles are remunerated at a lower rate, and the number of unused miles allowed is also capped. High penalty payments for damages are added.

  All of this can add up until the original invoice no longer fits.
  Anyone who has been in the business for a while knows that the account is settled at the end, and the bad news often comes in the form of additional payments. That doesn’t feel right somehow, and yet in the next round of acquisition, you do it the same way again until you get used to it. But there is an alternative: Open-end leasing.

• Why is the trend shifting from closed-end leasing to open-end leasing?

  Digitalization, e-mobility, cost pressure, scaling. Even before the unprecedented year of COVID, it was clear that change was coming to our industry. Now that change is definitely here. As a result, many supposedly immutable industry laws no longer apply. For example, that you are playing it safe if you finance your entire fleet with mileage-lease contracts and thus often cannot react flexibly to market events.

  In other countries, such as the US, these changes have been underway for several years. Fleet managers want to flexibly exploit the advantages resulting from market events. In short, they want to see the fleet service provider as a strategic partner and not as a perceived adversary who will restrict them contractually. The result is not only to deal almost exclusively with the leasing factor, but also to achieve holistic cost control. For example, the optimal time to replace vehicles can be found—even taking unexpected repairs into account. Downtimes can also be minimized. These cost optimizations succeed due to two factors: 1. You need the necessary reciprocal data transparency with the fleet partner. And 2. Contracts with which you can flexibly implement the findings from the data.

  To ensure that German customers can also use this type of contract, we have designed the Open Flex system for Germany, at the heart of which is FlexLease.

• In a nutshell, how does the open leasing model FlexLease work?

  Open, full-service leasing is divided into three steps corresponding to everyday business life.
  1. When signing the contract
  > Flexible, full-amortization financing agreement (such as rent-to-own)
  > Fixed repayment plan for maximum transparency
  > Separate financing contract per vehicle
  2. During the term
  > Consistent monthly payment
  > Can be terminated at any time after three months, full flexibility
  3. After the end of the term
  > The difference between the sales proceeds and the remaining debt therefore belongs to you.

• How can I save costs with FlexLease (open-end leasing)?

  With FlexLease you only pay the financing, i.e.:

  • No cost for contract adjustments
  • No prepayment penalty for premature contract termination
  • No excess/unused mileage charges due to mileage limitations
  • No cost resulting from damages or reduced valuation at the end of the contract
  • The residual value margin is yours.
• What are the advantages of FlexLease (open-end leasing)?

  With FlexLease you only pay for what you use. Expressly according to your actual needs and not according to the contract term. Holman markets the vehicle after you return it and the proceeds go to you. As has been the case for 95% of lessees in the US for decades.

  Open-end leasing is a flexible and transparent form of leasing. Even though closed-end leasing can often offer lower rates at first glance, there is a risk of paying significantly more.  The benefits of open-end leasing like our FlexLease product lie in the freedom with which you control your business, and the money you can save by controlling your fleet.

  Our expert tip: FREE YOUR FLEET from contractual obligations. We would be happy to help you calculate the benefits your fleet can garner from FlexLease. Even if FlexLease is not the optimal solution, we will find the right financing option for you. You can count on it.