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What is 'Sale & Leaseback'?

Submitted by diwakar on Tue, 01/16/2018 - 05:04

‘Sale and Leaseback’ is a way of liquifying the capital you have tied up in your vehicles so you can invest back into your business and generate growth. Undertaking a Sale & Leaseback allows you to access the benefits of leasing by using vehicle assets that you already own.

So how does it work? First, Maxxia purchases your vehicle(s) for an agreed amount (usually market value or book value) and then leases the asset back to you over an agreed period of time.

Some of the important things you need to be aware of when considering a sale and leaseback arrangement are:


Cash injection
The sale of your assets will provide an immediate cash injection to your business. This capital could be used for a wide range of business needs, such as paying off debts, investing in new or upgrading existing plant & equipment, employee development or even a business expansion.

Reduced responsibilities

By selling your vehicles you are transferring ownership and its responsibilities to the lessor. This means that if you enter into an Operating Lease, your business no longer has to worry about the responsibility of trading, selling or disposing of the vehicle. Also, your business does not have to bear the financial burden of those depreciating assets.

Smooth transition
Maxxia will efficiently manage the ‘Sale and Leaseback’ process so you can concentrate on running your business. The expert team at Maxxia can help you with a smooth transition from ownership to leasing.

Contracted kilometers

When you enter into a sale and leaseback agreement, you’ll be asked to provide an estimated annual kilometer usage. It’s important to be as accurate as possible to avoid excess kilometer fees at the end of your lease agreement. If any of your vehicles start to exceed their allocated kilometers during the life of the lease, you and Maxxia may be able to re-calculate your contract (subject to certain requirements and conditions) so that you do not end up with an excess kilometer charge.

Vehicle condition

Under the agreement, the lessor will specify the expected condition the vehicles should be returned in at the end of the lease. Not surprisingly, vehicles need to be returned in good condition. General wear and tear is taken into account according to the age and kilometers travelled, but damage is likely to incur charges in order to rectify the damage. Of course, if you owned the vehicles outright you would have been out of pocket for costs of repairs or loss of value anyway. Maxxia’s ‘Fair Wear & Tear’ guide is published on the website and can be downloaded for review.

‘Sale and Leaseback’ considered

All things considered, the ‘Sale and Leaseback’ option can be a practical way of making the move from outright purchase to an Operating or Finance Lease for business vehicles. It may enable you to receive a cash injection which can be put to use growing your business. ‘Sale and Leaseback’ also enables you to contract out the management of your vehicle fleet freeing up your time to focus on your business, With fixed monthly payments there area also no surprises during the term of your lease.

The above information is general only, and is not tailored to your circumstances. If you would like more information, or to discuss ‘Sale and Leaseback” options in more detail please contact our expert team. We can help you find a vehicle lease agreement that fits your requirements.