When it comes to managing a fleet of vehicles, the choice between operational and novated leases can make or break a business’s bottom line, especially for small to medium enterprises (SMEs). As Adelaide’s SMEs navigate an ever-changing landscape, operational leases are emerging as the clear frontrunner, offering a range of advantages tailored to the unique needs of local fleets.
Understanding the difference
A novated lease is a three-way agreement between an employer, employee and finance company, where the employee leases a vehicle, and the employer deducts the lease payments from the employee’s pre-tax salary. On the flip side, an operational lease is a traditional rental agreement between the business (lessee) and a leasing company (lessor), with the lessor retaining ownership of the vehicle throughout the lease term.
The flexible, cost-effective solution
For Adelaide’s SMEs with fleets of less than 20 vehicles, operational leases provide a level of flexibility and cost-effectiveness that novated leases simply can’t match.
“Our SMEs often have varying vehicle requirements, and operational leases allow them to scale their fleet up or down as needed without the long-term commitments of ownership or novated leases,” says Sonja Fleming, General Manager at Thyme Fleet, a local leader in fleet management solutions.
Streamlined administration, comprehensive service
Beyond cost savings, operational leases significantly reduce the administrative burden on Adelaide’s SMEs. “With novated leases, businesses must manage individual agreements with each employee, which can be a time-consuming and complex process,” Sonja explains. “Operational leases simplify fleet management by consolidating all vehicles under a single agreement with the leasing company.”
Many local SMEs also appreciate the comprehensive service and maintenance packages included in operational leases. “By bundling services like registration, insurance and scheduled maintenance, operational leases provide our clients with predictable, fixed costs and peace of mind,” she says. “This frees up valuable time and resources that can be better spent on growing their businesses.”
Embracing sustainability and safety
As the world’s commitment to sustainability grows, operational leases offer SMEs the opportunity to regularly upgrade their fleet to newer, more environmentally friendly and safer vehicles. “As technology advances, operational leases allow our clients to embrace the latest fuel-efficient and low-emission vehicles, reducing their carbon footprint and promoting a greener image for their businesses,” Sonja says. “Additionally, newer vehicles often include the latest safety features, protecting employees and minimising liability risks on our roads.”
As Adelaide’s SMEs continue to navigate the complexities of fleet management, operational leases are emerging as the smart choice, offering flexibility, cost-effectiveness, reduced administrative burdens, and a range of environmental and safety benefits tailored to their unique needs.
Don’t let your business fall behind – contact Thyme Fleet today and discover how our operational leases can drive your SME toward success.
