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Sale and Leaseback Case Study

Car Leasing

Type of Finance: Operating Lease

Client Industry: Real Estate

Amount Financed: $500,000

Client Request

Our Real Estate business client came to the conclusion that there had to be a better solution after analysing their company car cost

Costs continued to increase.  This combined with the administrative functions of having a staff member manually follow up receipts and perform monthly reconciliations on the costs associated with each car.

They wanted a simple solution that would provide their sales staff with company cars, meanwhile reduce the administrative burden and be more cost-effective.

Our Solution

We explained the different available lease options. As a result, our client chose to go for a fully maintained operating lease.

Firstly each Sales team member is now:

  • Given the option of selecting a vehicle from three different types of vehicles approved by the Company.
  • In addition, they are provided with a Fuel Card.
  • Further, they can call for any maintenance requests.

Secondly, the Business is now provided with:

  • Full Reporting (Online reporting, including FBT and detailed operating cost analysis on each vehicle)– Therefore significantly reducing the administrative burden
  • Monthly payments are known as there are no surprises with all maintenance and fuel, registration and Insurance built into the monthly payment based on the estimated km’s of the driver each year. This was based on the history of the drivers.
  • The company car fleet is now off-balance sheet. The residual value risk is outsourced.
  • The company is not involved in the management of fuel cards, registration, insurance, and maintenance.
  • Financiers buying power is bigger than a single business. As a result, the purchase price of each vehicle was at a reduced amount from the dealer.
  • Our client can simply return the vehicle (subject to meeting the return condition) at the end of the agreed term of the Operating Lease (that can be between 1 and 5 years).

In short, we can talk to you about doing a Sale and leaseback on your Fleet.