The conventional wisdom for most utility companies is to purchase their fleet assets outright.
And there are some advantages to that approach: potentially lower vehicle acquisition costs, no debt added to the balance sheet, and greater control over resale timing and pricing.
But as utilities see their profit margins getting squeezed, their fleet departments are becoming bigger targets for budget cuts.
So, when you’re under mounting pressure to do more with the same money as last year – or even less – how do you manage? How can you work within tighter financial constraints without sacrificing your fleet’s performance and reliability?
One option is leasing at least a portion of your fleet. But how do you decide which assets to lease? When does leasing make financial sense? And when doesn’t it?
UFP recently spoke with Charlie Guthro, vice president of global strategic services at ARI (www.arifleet.com), a fleet management company that works with several utility companies in North America, to get his perspective. Here is an edited version of our conversation.