What if…? …Someone were to present an overview of all forms of fleet financing. Strangely enough, this graphic does not exist. That is why we have created it for you.

Our American colleagues simply do not understand why closed-end leasing is so dominant in Germany: “Aren’t there any other attractive financing alternatives in Germany?” Of course, there are here, too.

In addition, knowing all these forms of financing available to the fleet manager should be as self- evident as knowing your rights before signing a contract. However, it is not.

This has awakened our ambition. We set out to create a graphic that compared common types of financing and explained them simply. Unfortunately, it was not that easy. Suddenly we understood why only a few have really internalized the differences and can use them for their everyday work. But that’s over now, the graphic is available for you to download. Feel free to use it for your company if you need to explain the topic yourself (small tip: just pull it into the PowerPoint. It is already in the right format).

The chart shows that there are four different types of financing for four customer needs: the lease, the mileage contract (closed-end leasing), partial amortization with right of tender (who actually comes up with these names?) and open-end leasing.

Very roughly speaking, the differences between the four types of financing (in addition to endless, legal fine print) lie in flexibility and in the arrangement of the sale proceeds.

Flexibility means that you do not have to specify the period of use from the outset. Or that the number of kilometers driven does not have to be fixed in advance. This is often very practical, as the exact usage of a fleet is difficult to predict. In open-end leasing, this is quite easy. In closed-end leasing, only under certain conditions.

One of the more flexible options, for example, is renting or subscribing. Everyone is familiar with this, but it is rarely used in the medium-term sector, as it tends to cover short-term needs. Unfortunately, renting is often more expensive than leasing. In addition, the user usually has only limited selection and configuration options. If you still want flexibility and think long-term, you can benefit from open-end leasing (anyone who has read this text carefully will notice that we are so convinced of this type of financing that we have launched our own open-end leasing product, FlexLease, on the German market).

With open-end leasing, the second major difference between the financing types also comes into play. With this type of financing, the customer receives the proceeds of the sale. Many other types of financing cannot compete with this.

As you can see, it pays to delve deeper. Not only for your expertise, but also for your budget. So, just have a look at the overview. If you have any questions, please contact us. We will be happy to advise you on which solution fits your company’s current needs.