Car leasing is an increasingly common practice amongst business organisations – why? Because there are quite a few advantages associated with leasing a car for business purposes rather than buying one outright, including the following commonly cited advantages.
- Buying a car requires financial outlay which affects business cash flow
- Leasing enables you to get behind the wheel of a new car which is important for conveying a favourable impression
- The car’s depreciation and financing costs are tax deductible
These are three outstanding benefits of car leasing, though bear in mind that there are quite a few things to consider when deciding whether or not to lease a vehicle for your business, including:
- How much you drive (you might have to pay for additional mileage)
- How much you put the vehicle through (consider wear and tear fees)
- How long you require the car for
However, the pros generally outweigh the cons regarding the decision to lease over buying, though you will need to take into account these important considerations in order to ensure that leasing really is the right option for you and your business interests.
How to lease a car for business purposes
How you go about leasing a car for business purposes is nearly as important as the decision concerning whether to lease or buy.
- Speak with others in your organisation and look online so as to decide upon the vehicles your business is interested in leasing
You should already have a good understanding of the vehicles that you’re interested in, for example, if the car will be used for chauffeuring clients around you’ll be looking at something along the lines of a luxury sedan though if it’s for deliveries then something like a van or pickup.
- Visit car dealerships in your local area after taking a look at websites
It’s generally advantageous to look at websites first so as to have a good understanding of the average rental rates of the cars you’re interested in. However, you could look at websites like www.leasingoptions.co.uk and avoid car dealerships altogether so as to save time, and more often than not, money too.
- Evaluate the leases offered
Lease contracts shouldn’t vary too significantly in price if you’re looking at the one model, though there are a few factors to take into account when evaluating leases, including the down payment and any additional fees – these include extra mileage, wear and tear, damage costs, etc. – applied to the contract, the monthly payment rate, the length of the lease term, the flexibility of the contract and whether there’s a buyout option available.
The vehicle – Which car is right for your business?
In addition to understanding lease contracts and deciding upon a lease agreement that’s right for your business organisation, you will also need to ascertain which vehicle is right for your business.
This not only concerns what was mentioned above concerning suitability, for example luxury sedans for chauffeuring clients and pickups or vans for deliveries, but also the size of the vehicle, its fuel efficiency and similar considerations.
Moreover, consider the impression that the vehicle will make upon your clients and customers. Whilst you mightn’t be chauffeuring them about, you should consider their impressions of you as a business owner or manager because the car you drive in for work purposes can form a positive or negative impression in their minds.
Leasing a car for business purposes can prove highly advantageous, though be sure to weigh the pros and cons of each lease agreement and vehicle before entering into an agreement with a car leasing company.