Fleet News

Sale and leaseback deals show big rise

SALE and leaseback deals have surged ahead in recent months with a number of major fleets deciding to sell their vehicles to a leasing company and lease them back. Three weeks ago GE Capital Fleet Services announced what is believed to be the largest private sector sale and leaseback arrangement with General Accident for 3,000 cars.

Lease Plan has reported a 546% increase in sale and leaseback business this year, compared to the whole of 1996, with companies such as NCR, Roche Products, and Pitney Bowes switching from outright purchase to leasing. Most recently insurance company ITT London & Edinburgh has outsourced its fleet of 300 cars through a sale and leaseback deal with Lease Plan.

For many fleet decision-makers the beneficial VAT treatment of leasing, introduced in August 1995, is only now being fully appreciated, according to Simon English, commercial director of Jessups. And for those convinced of the merits of this form of fleet funding, sale and leaseback offers an immediate mechanism to switch from outright purchase to leasing in one fell swoop.

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