Buy or Operational Lease? A Fleet Cost Comparison

Should a company manage its vehicle fleet by buying or move to operational leasing? This question comes up on finance managers' agendas every year. The right answer depends on fleet size, usage intensity and the company's capital priorities. The comparison below offers a framework with a simplified example.

Example scenario: 10 vehicles, 36 months

Assume a purchase price of 1,800,000 TRY per vehicle, a 50% resale value at the end, monthly financing cost of 2.5% and 120,000 TRY a year in insurance, maintenance and tyres.

• Depreciation: 900,000 TRY
• Financing cost: ≈ 891,000 TRY (on average balance)
• Insurance, maintenance and tyres (3 years): 360,000 TRY
• Total per vehicle: ≈ 2,151,000 TRY

For the same vehicle, an operational lease of 56,000 TRY a month totals 2,016,000 TRY over 36 months. The difference is about 135,000 TRY per vehicle, or 1.35 million TRY across ten vehicles.

Advantages of buying

• The vehicle is a company asset and its resale value stays with you at the end
• Customisation and choice of make are free
• No mileage penalty on high-mileage vehicles

Advantages of operational leasing

• It ties up no capital; cash flow becomes fixed and predictable
• Resale value risk, maintenance surprises and replacement cars are the lessor's job
• Administrative load falls with fleet management, reporting and a single invoice
• The renewal cycle is automatic every 24-48 months, so the fleet always stays new

Checklist for the decision

1. Is annual mileage per vehicle below 40,000? (Leasing is advantageous)
2. Are cash flow or investment priorities elsewhere?
3. Do you want to reduce the administrative burden?
4. Do you plan to keep the vehicle longer than five years? (Buying is advantageous)

Watch for hidden costs

In buying, the resale value estimate is the biggest uncertainty; when the market fluctuates a 50% assumption can fall to 40% and the difference is the company's loss. In leasing, mileage excess, damage excess and early termination terms must be checked in the contract.

A hybrid model

Many companies cover the core fleet with operational leasing and seasonal needs with daily or monthly rental. This lowers fixed cost and keeps flexibility in peak periods.

Clauses to check in the contract

• Mileage limit and excess fee
• Damage excess and replacement-car terms
• Early termination and vehicle swap costs
• Maintenance and tyre scope (summer/winter)

To enter your own numbers use our fleet cost comparison tool, and fill in the corporate form to get a written quote within 24 hours. Tax effects vary with the company's situation; we recommend consulting your accountant.