Here’s why second time business car leasing is proving to be such a brilliant solution for clients in these uncertain times…
In the current economic climate, I’ve been having a lot of conversations with business owners who are sitting firmly on the fence when it comes to vehicle decisions.
With Trump’s tariff wars sending ripples through global markets and the increasing number of NZ businesses facing uncertain times, it’s completely understandable.
As the managing director here at Driveline, I’ve seen this play out across businesses of all sizes.
But here’s the thing – your business still needs to operate, and that often means having reliable vehicles on the road.
The question isn’t whether you need vehicles; it’s how to acquire them in the smartest, most capital-preserving way possible.
That’s why I want to talk about second time business car leasing – aka “second-time-around leasing” – which is proving to be a brilliant solution for many of our clients in these uncertain times.
What Exactly Is Second Time Business Car Leasing?
If you haven’t heard of it before, second time business car leasing refers to leasing ex-lease or second-hand vehicles instead of brand new ones.
These are typically late-model vehicles that have been well-maintained, have comprehensive service histories, and still have plenty of life left in them.
Unlike some random second-hand vehicle you might find at auction sites, ex-lease cars offer significant security around condition and reliability.
The fact that they come with extensive service histories provides peace of mind that you simply won’t get with many other second-hand options.
Why Second-Time-Around Leasing Makes Sense Right Now
1. Cash is Absolutely King
When economic times are uncertain, preserving capital becomes critical. During periods like this, cash truly reigns supreme.
You need a cash buffer that allows your business to survive periods of lower demand, giving you staying power if things get tough.
Second time business car leasing helps you achieve this by significantly reducing your monthly outgoings compared to new vehicle leasing or financing.
Our analysis shows that ex-lease vehicles can result in monthly payments that are around 30% less than for new vehicles. That’s capital that stays in your bank account, providing a buffer against economic uncertainty.
2. Reduced FBT Costs
Here’s something many business owners don’t immediately consider – the Fringe Benefit Tax implications. Because second-time-around leasing involves vehicles with a lower capital value, your FBT costs are significantly reduced.
Let me put some real numbers around this…
In a recent analysis I did for a client who needed a ute for a new junior employee, the FBT savings alone on the ex-lease vehicle versus a new one amounted to $2,402 per year. That’s not insignificant.
3. The Stock Availability Challenge
We’re seeing lower levels of new vehicle imports. Many of our clients are finding that their first-choice vehicles are completely out of stock, with a long wait until they arrive!
But we don’t have that problem with second hand and ex-lease vehicles. Not only can you get the vehicle you need now, but you also save money both on the purchase cost and FBT.
If you can’t find what you’re looking for on our Ex-Lease & Used page, we can source just about anything you want, and they can all be leased through our second-time-around leasing package.
4. Perfect for Junior and Mid-Tier Roles
Here’s a scenario I see frequently…
A business needs to provide a vehicle for a new, junior employee. If you put them into a brand-new vehicle, it’s not good optics. It sets a precedent that creates expectations with the rest of your team.
In better economic conditions, you might just lease a new vehicle for your senior person and rotate their old one down to the new person. But when things are tight, second time business car leasing offers the perfect solution.
The Numbers Tell the Story
Let’s look at a real-world example I recently calculated for a client who was on the fence about what to do…
I compared a new Ford Ranger XLT double cab 4×4 ute (including about $6,000 of accessories like a canopy, tow bar, roof racks, etc) against a 3-year old second hand one with only 65k on the clock.
The results were eye-opening…
- New vehicle: $1,069/month on a 4-year lease
- Second-hand vehicle: $744/month on the same term
- Annual savings: $3,900
When you add in the FBT savings of $2,400 per year, the total savings come to $6,300 p.a.
Over the full four-year term, that’s more than $25,000 in total savings!
Beyond the Financial Benefits
While the financial advantages are compelling, second time business car leasing offers some other benefits that aren’t immediately obvious:
Harsh Operating Environments
If your business operates in harsh environments – the back of a farm, construction sites, mines, or forestry – you know vehicles get battered.
A second-hand vehicle often makes more sense in these conditions than a pristine new one that will quickly show signs of wear and tear.
Avoiding Maintenance Risks
One concern I hear from business owners is about maintenance costs on used vehicles. It’s a fair point, but there are ways to mitigate this:
- Many used vehicles still have some factory warranty remaining.
- We can include an after-market warranty in your lease for additional peace of mind.
- You can consider a shorter lease term (say 2 years instead of 4) on second-hand vehicles.
Who’s Taking Advantage of Second-Time-Around Leasing?
In the current economic environment, we’re seeing second time business car leasing gaining favour across many sectors:
- Businesses needing to fulfil short-term contract requirements.
- Companies keeping within tighter budget parameters.
- Operators working in harsh conditions where vehicle wear and tear is significant.
- New start-up companies looking to minimise initial capital outlay.
Practical Examples from Real Clients
Let me share a couple of quick examples of how our clients are using second-time-around leasing…
One construction company was facing the end of term on their current vehicle leases. Rather than commit to new vehicles in the current economic climate, they’ve entered into new “second-time-around leases” on the same vehicles.
This buys them another 1-4 years with the same vehicles while reducing their monthly payments and FBT costs.
Another client, a plumbing business that’s expanding despite the tough times, needed vehicles for two new apprentices.
By using second time business car leasing, they got two well-maintained ex-lease vans at a monthly cost that was 40% less than new vehicles would have been.
Making the Decision
If you’re currently sitting on the fence about vehicle decisions, you’re not alone. It’s understandable given the current economic uncertainty.
However, if your business needs vehicles to operate effectively, second-time-around leasing offers a practical middle ground that lets you…
- Preserve precious capital
- Maintain operational capacity
- Significantly reduce your monthly outgoings
- Minimise your tax burden through reduced FBT
- Avoid lengthy wait times for new vehicles
The advantages of second time business car leasing in the current climate are considerable. It gives you the flexibility to navigate uncertain times while ensuring your business has the vehicles it needs to operate effectively.
We currently have dozens of ex-lease and second-hand vehicles available on our Ex-Lease & Used page, all of which can be leased through our second-time-around leasing package.
The vehicles range from small cars to luxury SUVs and 4×4 utes – there’s something for every business need.
And if you don’t find what you’re looking for on our Ex-Lease & Used page, get in touch and we’ll get it in through out nationwide dealer network relationships.
In times like these, making smart financial decisions is more important than ever. Second time business car leasing lets you drive the vehicle you need, preserve capital, and reduce your overall costs.
It’s about finding that balance between operational requirements & financial prudence.
After all, your energy is best spent working in your business and making a difference, not running around car yards or stressing about excessive vehicle payments.
Our relationships in the automotive industry mean we can find the right ex-lease vehicle for your needs and set you up with an affordable monthly payment plan that makes sense in today’s economic reality.
Because at the end of the day, that’s what smart business is all about – adapting to the conditions while finding ways to keep moving forward.
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