Potential End of Lease Problems Part Two: Limited Options

Leasing is great and many businesses know it. There are a plethora of benefits that leasing provides as an alternative method of financing assets. From freeing up the cash flow so money can be invested into your core business whilst you still have access to the asset, through to the ability to avoid technological obsolescence with asset refresh.

Leasing opens many doors and, depending on your lessor, offers several end of lease options that allow businesses to get the most out of their leased assets right through to the end of the lease period. The chance to act as a sales agent on behalf of the lessor, extending the lease for a secondary term or simply terminating and returning the asset; these are all potential options with a well negotiated lease schedule and an organised lease portfolio.

However, as all of these choices are determined at the lease inception, where the contract is drawn and the terms and conditions are confirmed and implemented; it is crucial to be thinking about end of lease from the very start of arranging new leases. Once a lease schedule is signed, it is very difficult and expensive to backtrack and renegotiate new terms, so it is important that you have an idea of what you may want from the end of your lease, prior to actually starting.

Discuss with your operations managers; how long do you actually need the asset for? Does that cover the lease term or would you need the option to extend the lease?

Your lease schedule should reflect your operational requirements so it is important that you understand what they are and how they will affect your lease agreements. What usually happens when you are finished with an asset? What options would most benefit your organisation’s requirements? Is it difficult to find the leased assets that need returning? Are they always damaged? Do they all get returned to one central place or various depots around the country? Do they only get returned when they break down? Do vehicles overrun their mileage or usage limitations?

Once you have a clearer view of what realistically will be needed, you are in a greater position to be able to negotiate terms that will benefit your organisation and internal processes.

Negotiating an optimal lease schedule requires a lot of foresight, experience and knowledge to ensure you are getting the very best out of your lease agreements. Innervision’s expert lease portfolio consultants have a wealth of experience dealing with various lease types and lessors and are more than qualified to help our clients arrange leases that best suit their procurement requirements. Innervision’s leasing specialists can help arrange deals that even industry leaders simply cannot achieve alone.

For more information on Innervision’s end of lease services and other offerings, such as our unique lease portfolio management software as a service (SaaS) LOIS, click here.

Alternatively, you can give us a call to find out how Innervision may be able to help your business leverage the full potential within your new and existing lease agreements, on: +44 (0) 20 7283 9422

For more information of end of lease processes and advice throughout the lease lifecycle, you can download our ultimate guide to leasing basics by following this link.

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