There is an opportunity cost to everything.
Cash is king.
These two sayings go hand in hand.
Businesses with cash have the power to utilize cash for strategic projects, opportunities, and acquisitions.Picture two companies: both have a fleet of 50 vehicles. Company A has $1.4M cash and leases their 50 vehicles. Company B has very little cash and they own 50 fleet vehicles outright.
Company B tied up their cash literally in their parking lot. Company A used a Fleet Management Company to finance their vehicles through leasing freeing up their cash giving them the ability to take advantage of growth opportunities when presented.
Leasing allows you to preserve capital, use it for strategic reasons, and deploy capital when opportunities present themselves allowing you to capitalize on those opportunities. Leasing also provides sales tax savings in almost every state and dramatically improved income tax benefits.
Watch Adam Berger of Doering Fleet Management discuss this concept.