ARI is revolutionizing vehicle leasing in Germany
Stuttgart (01.12.2017) – With “ARI FlexLease”, ARI Fleet Germany is now offering a leasing model for all types of commercial vehicles. This financing solution with flexible durations and unlimited mileage combined with transparent billing models offers cost advantages of up to 20%.
The open-end finance lease model means a complete system change compared to the already established leasing models, since for the first time the remarketing proceeds of a vehicle at the end of the contract fully benefit the lessee, instead of remaining with the lessor as before. The product also features completely flexible durations and the option of returning the vehicles to the lessor at any time as required, without having to pay additional non-transparent contractual penalties. Additionally, the well-known problem of calculating value shortfalls at the end of the contract is resolved in ARI’s flexible models, as there is no separate value shortfall calculation.
“ARI FlexLease introduces a paradigm shift in vehicle leasing. The prevailing system with off-the-shelf fixed-duration contracts fails to offer this kind of flexibility and transparency,” says Majk Strika, Managing Director of ARI Fleet Germany GmbH. On average, the cost advantage of the possible contractual constellations amounts to around 10% per year.
But that’s not all. ARI FlexLease solely covers the financing component for all vehicle types, which then opens up the possibility of considerable additional savings in services such as repairs, tyre changes or insurance. Because, unlike suggested by the adverts, the customary full-service closed-end leasing contracts (“all-inclusive”) are usually more expensive than purchasing these services separately.
The unbundling of financing and services creates the opportunity for detailed negotiation of conditions, and thus more competition. All in all, the cost advantages can be up to 20%.
“Our offer is aimed at companies that want to operate a fully cost-oriented fleet management with transparent control of all expenses,” says Strika. ARI FlexLease integrates with the various fleet management modules offered by ARI Fleet. The lessee can flexibly use their fleet according to their individual needs, while achieving huge savings. In the USA, this leasing product has been dominating the market for decades.
The changes in detail:
With conventional mileage-based contracts, residual values are often set too low. This means that customers pay rates that are too high right from the start, while the lessor ultimately profits from the remarketing proceeds. With ARI FlexLease however, the lessee only pays the financing costs. After the contract has ended, the proceeds from the sale of the used vehicle are offset against the remaining residual value and the profit is credited to the lessee. The calculation of so-called return damages, which is a considerable irritation for leasing customers, is eliminated. Until now they had to fear a whopping bill for every little scratch when returning the vehicle.
The flexible terms mean that there are no adjustment fees for contract changes. This affects about 3% of commercial leasing contracts, because fleet capacity requirements change regularly. With ARI FlexLease, the following expenses are also eliminated: Cancellation fees for early termination of contract, fees for contract adjustments.