Benefits of Leasing From VPSI
Under the right circumstances, leasing vehicles under VPSI‘s Capital Lease Program can offer public transit agencies significant benefits:
It is possible to acquire a greater number of vehicles through a lease arrangement
than a purchase because the cost of leasing is spread over time. The primary
disadvantage of purchasing outright is the enormous amount of capital that
is tied up, unavailable for use, for other investments. By converting a large
capital expenditure for purchase of vehicles to a smaller periodic expense,
the public transit agency preserves flexibility in the use of its resources.
- Flexible Lease Terms.
We recognizes that in a government funding situation, it may be necessary
to both allow for the avoidance of long-term debt (which usually requires
an involved set of procedures, sometimes including voter approval) and the
possibility that the agreement is limited by the need to appropriate funding
on an annual basis - which may not occur in a subsequent year. Accordingly,
a VPSI Master Lease Agreement is used, which includes a Non-Appropriation
or fiscal funding out clause. This provides for cancellation of the agreement
at the end of one current appropriation period if the public agency fails
to appropriate funds for lease payment obligations.
- Meet Supply Needs.
When leasing the vans, the number of vehicles supplied can increase or decrease
depending upon the actual number of vanpools formed. No vans (purchased) will
sit idle until groups are formed. Further, leasing enables the correct van
to be supplied to match the size of the vanpool group. Groups can, within
reason, be moved into larger or smaller vehicles as needed. Conversely, when
purchasing vans the seating capacity is determined months ahead of the group
formation process which could result in a mismatch of vehicle needs and the
existing vehicle supply.
For more information on leasing from VPSI contact:
Vice President – Government Relations