What is Full-Service Leasing?
Full-service leasing in logistics is a kind of agreement that covers a wide range of services needed to support leased equipment. It includes all the base lease rates and all the additional operating requirements and expenses.
Significance of Full-Service Leasing in Logistics
When a company chooses a full-service leasing arrangement, they save up on a lot of time, money, and resources. This way, the lessee does not have to pay for each service separately, which would otherwise become costlier. Here are some added benefits of full-service leasing:
- Helps focus on the more important tasks of the company. If each of the services is purchased separately, each one of them will require the company’s attention which could otherwise be used in more productive tasks.
- Insurance costs, or repair costs may vary from time to time. Full-service leasing will not require the lessee to pay a different sum of money every month. The payment for the lease is fixed.
- Since all the services related to the vehicle are covered under one single lease, there is only one person or company involved. This helps in the expeditious resolution of problems.
How Does Full-service Leasing Work?
A full-service lease is a two-party agreement in which the lessor, who is the party providing the equipment on lease, provides a variety of services to assist the lessee in operating the leased equipment.
Use Case of A Full-Service Lease
For example, a company gets a tractor on lease from another company that lets out tractors on lease. The lessee is required to pay AU$200 every month for the tractor and the additional services associated with it.
Here is the breakdown of the costs:
Rent of the vehicle- AU$60
Insurance- AU$30
Fuel- AU$70
Maintenance- AU$20
Unprecedented repairs: AU$20
If these services were to be bought separately from different companies, the costs would have increased. Thus a full-service leasing agreement is an excellent option for companies that regularly need vehicles for the smooth functioning of their businesses.