When it comes to businesses looking to add to their assets, they will always want to find the most cost-effective solution. If looking to add business cars, it is always best to lease the automobiles. Whether your business relies heavily on a large fleet or you simply have one company car, leasing makes the most financial sense and is a great option for both big and small companies.
What is Leasing?
So, what exactly does leasing involve? Instead of purchasing a vehicle outright or paying for it over an extended period of time (hire purchase), a lease involves hiring the automobile for a predetermined period (often 2 or 4 years but this is usually negotiable). During this time you will make monthly payments and then simply hand the keys back at the end of the agreement. There are often annual mileage allowances and a charge is incurred if this is exceeded (the distance is often negotiable).
The Main Benefits
One of the major benefits of leasing a car for business purposes is the fact that you can avoid when you hire a car. This is if the automobile is solely used for business purposes, but even if it is used for personal reasons then you can still avoid a large percentage of VAT. Needless to say, this is a huge financial advantage.
The other benefits of leasing are that you completely avoid vehicle depreciation - this can be as much as . Additionally, leasing allows businesses to add brand new vehicles to their fleet every few years. This can boost morale, but you could also benefit from greater fuel efficiency and other improvements. Driving new cars is also a way of promoting that you are a successful business.
Leasing companies like often include a full maintenance and service package as part of the agreement too. Finally, these hire agreements have much lower monthly payments than hire purchase deals and this makes them more cost-effective.
From a financial standpoint, there are many benefits of hiring a car for your company. You can avoid VAT and depreciation, the monthly payments are manageable and you do not have to pay a huge sum upfront. There are then other benefits, such as getting to drive a new car every few years and not having to worry about selling the car on. Overall, leasing is a smart move to make for any business looking to add to their fleet and much more cost-effective than buying outright or hire purchase deals.