Lease, finance, or cycle
Three ways to put the same van on the road for five years, costed line by line. The answer is genuinely different depending on whether you intend to still own the vehicle in year seven.
Five year total cost
Same $42,800 van, same 15,000 mile band, three funding routes. Maintenance figures assume a metro service route and include tyres.
| Line | Finance and keep7.4% APR, 60 months, 10% down | Lease, 60 months39% residual, money factor 0.00175 | Lease, 36 then re-lease54% residual, disposition waived on renewal |
|---|---|---|---|
| Cash up front | $4,165 | $1,435 | $1,529 |
| Monthly payment | $722 | $490 | $584 |
| Payments over 60 months | $43,342 | $29,426 | $35,039 |
| Fees across the period | $150 | $1,440 | $945 |
| Maintenance and tyres | $5,180 | $3,240 | $1,980 |
| Asset value at month 60 | - $16,692 | None | None |
| Net five year cost | $35,995 | $34,106 | $37,964 |
- Finance and keep$35,995Choose this when: You keep the van past month 60 and run it into year seven or eight.
- Lease, 60 months$34,106Choose this when: You want the lowest monthly on a single unit and do not want to own it at the end.
- Lease, 36 then re-lease$37,964Choose this when: Your crews need a vehicle that is always inside warranty, and downtime costs you more than the monthly does.
What the model does not price. Downtime, the cost of a van sitting at a workshop in year five, the working capital tied up in the deposit, and the administrative time of selling a used vehicle yourself. Those all favour leasing and none of them are in the table, because we cannot put an honest number on them for your business. All figures here are samples for a demonstration site.
Ending a lease early
It is priced, not free, and the price changes sharply with how far through the term you are. Worked on the 36 month reference lease: $583.99 a month, 54% residual.
| You exit at | Months left | Remaining depreciation | Remaining rent charge | Adjusted lease balance | Sample auction value | Settlement |
|---|---|---|---|---|---|---|
| Month 6 | 30 | $14,198 | $3,321 | $40,632 | $31,672 (74%) | $9,455 |
| Month 18 | 18 | $8,519 | $1,993 | $33,624 | $26,536 (62%) | $7,583 |
| Month 30 | 6 | $2,840 | $664 | $26,616 | $24,396 (57%) | $2,715 |
How the settlement is built
The adjusted lease balance is the residual plus every remaining depreciation instalment plus every remaining rent charge. We sell the unit at auction and credit you what it makes. The difference, plus the $495 disposition fee, is what you pay. There is no penalty on top of that.
The pattern is the one you would expect: exiting early costs the most, because the vehicle has lost value faster than you have paid the depreciation down. By month 30 the gap has closed to about $2,715.
Cheaper ways out
- Swap the unit. Move the lease onto a different vehicle class and keep the term running. No settlement.
- Change the mileage band. If the problem is that the routes changed, re-band once before the final six months instead of exiting.
- Early renewal. From month 30 we will usually roll you into a new unit and waive the disposition fee, which removes $495 of the settlement.
The argument that is not about cost
Most fleets that move from buying to leasing do it for working capital, not for a lower headline number. Ten owned vans at a 10 percent deposit is $40,150 of capital sitting in the yard. The same ten vans leased is $15,290 at signing, and the rest of that money stays available for stock, wages or a bid bond.
The second argument is age. A fleet on a 36 month cycle never runs a vehicle past its warranty, which is where the unbudgeted repairs and the roadside days live. That is why the middle column in the table above carries the lowest maintenance line by a wide margin.
Model your own unit
Run the model against your fleet
Send us what you run today, owned or leased, and we will build this same table for your actual units and your actual mileage rather than a reference van.