Business Car Leasing
In the same way that personal car leasing schemes have come to dominate the way people buy their cars, business car leasing is becoming a favourite option because of the cost-savings, tax benefits and the opportunity to drive a new car every couple of years or so.
Why buy a company car?
Traditionally, companies bought their company cars because it then became a company asset that offered several benefits to the business. Companies could write off several related expenses such as fuel, mileage and running costs.
Also, the interest payments on the car loan as well as the depreciation costs could be counted as eligible business expenses. Additionally, in some cases, businesses were able to secure lower insurance costs on company cars that were owned by the business.
The obvious downside for companies buying their company cars is that it is a large expense on what is ultimately a depreciating asset. Companies can still maintain the residual value on the vehicle as it is paid off. Once the car is owned, it can be run for as long as it is fit to do the job.
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Why lease a company car?
The flexibility and agility of leasing a company car is often more attractive to small and medium sized business. It typically comes down to the company’s cash flow situation. When a company leases a vehicle, they don’t have to stump up a larger deposit and monthly lease payments tend to be lower than car loan payments.
If the driver of the company car does high mileage, leasing allows you to upgrade to a new car on a more regular basis meaning the cars are kept fresher. This has the additional benefit of enabling companies to often avoid costly maintenance and repairs on an ageing vehicle.
Another issue that is often overlooked is ‘company image’. Upgrading your company cars every two to four years means that your customers will be seeing you in much more modern vehicles. This can significantly contribute to the overall impression they form of your company.
As a final note on the financial comparison, in the same way companies who buy their company cars can claim eligible business expenses, companies who choose to lease can write off some of their business-related car expenses as well.
When you choose to lease a business car, you are in total control, which is the perfect position to be in when it comes to negotiating a favourable deal that could save money for your business. If you are looking to lease multiple cars for your business, it is likely that you will be able to secure an even better deal. It also pays to take advantage of an independent, specialist leasing company’s expertise, as they will know the current market, have access to special deals and be aware of the latest models that are due to arrive soon.
Before you commit to buying or leasing a company vehicle, you may want to seek independent advice on which is the best option for your specific situation. CARMERCIAL Leasing can source and fund all makes and models of car, van and pick-up. Both new and used, to lease or purchase outright. Rest assured that we will find the right deal for you.
There has never been a better time to look at Vehicle Financing options so why not give us a call and see if we can find you the perfect car finance option at an affordable monthly repayment. Call us on 0289 131 1292, email us at firstname.lastname@example.org or browse some of our business customers 5-Star reviews on our website and Facebook pages.