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Sale and Leaseback: what you need to know

posted on 06/07/2023

When it comes to making choices about the ownership and financing of your fleet, finding the most cost-effective, flexible, and efficient solutions can be challenging. One option that can provide you with immediate financial advantages and operational benefits is Sale and Leaseback. This blog outlines the details of Sale and Leaseback, how it works, and the potential advantages for your business. 

What is Sale and Leaseback?

Sale and Leaseback is a fleet financing solution which can unlock significant financial and operational benefits for your businesses, through selling a vehicle you own to a leasing company and continuing to use it. This is done under a lease arrangement for a set period of time and mileage. 

How does Sale and Leaseback work?

Essentially, Sale and Leaseback is a two-step process. First, you transfer the ownership of your vehicle to a leasing company. This transaction unlocks the capital you have tied up in the vehicle, providing an immediate boost to your cash flow.

 

The 'Leaseback' part of the process kicks in immediately after the sale of the vehicle. You lease the vehicle back from the leasing company (just like you might with a Contract Hire vehicle) under an agreement – allowing you to continue using the vehicle for your business operations.

 

The advantage of this arrangement is that you continue to have the use of your vehicle, while also benefiting from the immediate injection of cash from the sale. Additionally, this allows you to mitigate the financial risks associated with vehicle ownership, such as unpredictable resale values and unexpected repair costs.

The benefits of Sale and Leaseback

When considering Sale and Leaseback, it's crucial to understand its benefits and how these might impact your business. Here are some key points to consider:

Immediate release of cash:

Selling your fleet vehicles to a leasing company like Alphabet can unlock the money tied up in them. This immediate injection of cash can be used to support other strategic initiatives or operational expenses within your business.

Elimination of financial risks:

Alphabet, as the new owner of the vehicles, assumes all the financial risks associated with ownership, such as unpredictable resale values and unexpected repair costs. This allows you to focus on your core business activities without worrying about these potential financial pitfalls.

Expert fleet management:

With Sale and Leaseback, you can leverage Alphabet's experienced fleet management experts. This can save you time and the added stress managing a fleet can bring, allowing you to focus more on your core business role.

Smooth transition with minimal disruption:

Transitioning into a Contract Hire agreement through Sale and Leaseback is a hassle-free process. It enables you to continue your business operations with little to no disruption.

Budgeting made easier:

Fixed monthly payments allow you to budget more accurately and confidently. If you include additional benefits such as Servicing and Maintenance or Breakdown Recovery within your lease agreement, you can further streamline your fleet expenses.

Ready to take the next step towards financial flexibility and improved operational efficiency?

Sale and Leaseback could be the ideal solution for your business, and we’re here to help you make the process as seamless as possible.

 

Get in touch with our friendly and experienced team on 01252 976 010 to discuss your specific needs and learn more about how Sale and Leaseback could work for your fleet. 

Guiding you through your options

When considering Sale and Leaseback, it's crucial to understand its benefits and how these might impact your business. Here are some key points to consider:

1. Custom solutions:

We understand every fleet is unique, and we tailor our services to suit your specific business needs. Whether your priority is reducing costs, minimising risks, or improving operational efficiency, we can customise a Sale and Leaseback solution which aligns to your objectives.

2. Expert guidance:

With our extensive experience of Sale and Leasebac0k for fleets of all sizes, you can rely on our expertise to facilitate a smooth transition to leasing. We're here to provide guidance and answer any questions you may have along the way.

3. Comprehensive Fleet Management services:

Beyond the initial sale and leaseback, we offer a range of fleet management services, including Servicing and Maintenance, Breakdown Recovery, Accident Management, and Fuel Management. These services can further free up your time and resources, allowing you to focus on what you do best - running your business.

4. Financial and operational benefits:

By transferring the ownership of your vehicles to Alphabet, you can enjoy the financial and operational advantages of leasing, including the release of cash tied up in your fleet vehicles, predictable monthly payments, and reduced fleet management admin.

5. Risk management:

Alphabet assumes the financial risks associated with vehicle ownership, including unpredictable resale values and unexpected repair costs, providing your business with added peace of mind.

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