Cash / bank loan
The fastest route to ownership, since there's no interest with cash. In exchange, you tie up your own capital in an asset that starts losing value from day one. You pre-finance the VAT on the purchase, and the asset's fate, cost tracking, and resale are all your responsibility. A bank loan works the same way, with one difference: instead of tying up your own capital, you pay interest for it.
Closed-end financial leasing
The goal is ownership: once the last lease payment is made, the asset automatically becomes yours. It's a gross-based structure, meaning the lease payment includes VAT, so there's no VAT reclaim. You carry the asset on your own books, and the residual value risk stays with you.
Open-end leasing
A net-based structure, so VAT reclaim is possible for passenger cars. The asset is still on your own books. What matters happens at the end of the term: you're not buying the asset, you're buying the right to decide whether to purchase it, return it, or transfer it to a third party, with no obligation to buy.
Long-term rental (operating lease)
A net-based structure with VAT reclaim. The lessor carries the asset on their own books, and it returns to them at the end of the term. There's no decision about ownership, because it never transfers to you. In exchange, operating and residual-value risk generally stay with the lessor, which is why it costs more per month than the other structures: you're buying two things at once, the use of the vehicle and the transfer of risk.
TCO (Total Cost of Ownership)
The total cost of holding a vehicle: not just the monthly fee or purchase price, but everything that arises across its full lifecycle, from service costs to residual value. A good TCO calculation isn't valuable because it shows exactly what a car costs, but because it helps you make a better business decision: the offer that looks cheapest often ends up costing the most, because the difference doesn't show up in the monthly fee, it shows up at the end of the contract.
Residual value
The most sensitive point in the industry: the asset's estimated value at the end of the term, which has to be forecast 4-5 years in advance. A bad estimate can wipe out the entire benefit generated over the term. Depending on which structure you choose, this risk sits with you or with the financier/lessor.
Car Policy
A company's own policy on who can use which car, and under what conditions. In practice, it's rarely reviewed: sometimes it's not even written down, just habit, and sometimes its structure is already too outdated to serve how the business actually runs today. A good Car Policy doesn't regulate which car to provide. It regulates which mobility solution to provide.
If any of these structures are still unclear for your specific fleet, let's talk it through.
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