Advantage of Car leasing for Business Owners

Car leasing can be an option worth considering for business owners. While the cost of running a business is high, the added expense of buying a new car for company use will greatly add to the expense and can be prohibitive. But by leasing a vehicle it will save you the cost of purchasing the car upfront and is also cheaper than taking out a loan for the purchase.

So is car leasing an option for your business? Before answering that question it is important to dispel the biggest myth surrounding the whole issue of leasing. This myth is that leasing a car is exorbitantly expensive. It is not. It is cheaper than purchasing and those savings should allow you to choose a car most suited to your company’s needs. And in a world where image is becoming increasingly important, the sight of brand new car – that has been leased – will send out the right signals for your company. Also there are many car leasing companies in the market place, so it is a good idea to shop around and find the best deal, at the best price, available for you and your business.

There are also many added extras which make the whole cost of taking this step very economical. Depending on the company you deal with, road tax will be included in the price and renewed during the period of the lease. They should also include servicing and repair in the price and if they don’t than you should look elsewhere as all inclusive deals are now the norm and not the exception. As well as the financial advantage of such a deal, it will save you the time and trouble of trying to book vehicles into a garage, allowing you to concentrate on your business.

Another advantage of leasing a car is that if you are registered for Value Added Tax, you will be able to claim a minimum of 50 per cent on each lease payment if the vehicle is used for both business and personal use, and up to the full amount of VAT paid if it is used solely for business.

Leasing will also help overcome the problem of depreciation in the value of the vehicle over the period of the lease. Once the contract is ended you will not have to deal with the problem of negative equality or disposing of the car which would be the case if you had purchased the vehicle outright.

In summary the savings of leasing over the cost of car purchase, the VAT savings and the removal of the problem of depreciation should make the concept of car leasing an attractive option for your business.

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