7 Reasons to Choose Leasing Over Owning a Business Vehicle
If you are running a small growing business, you are dealing with many uncertainties. And if you need a way to deliver your goods or services, mobility may be one of those uncertainties. But it doesn’t have to be.
Many business owners think that leasing is for large corporations running big vehicle fleets. The truth is quite different: any type of business, no matter how big or small it is, can benefit from leasing.
Here are several reasons why leasing a business vehicle maybe your best option, but seriously - check with your small business accountant first:
Lower Monthly Payments
Buying a car straight out of your wallet is too expensive. You’ll always want to keep your working capital. Because of this, most people take out a loan to buy a new vehicle.
If your business takes out a car loan, you will have to pay it back in full even if the vehicle value drops below the borrowed amount. And you can rest assured that the vehicle’s value will fall, especially if it is a brand new one.
Generally, monthly lease payments are lower than monthly loan payments. One of the reasons behind this is those lease payments are based on a vehicle’s depreciation over the period of the lease.
Even if you get a long-term loan and trade in your old vehicle, your monthly payments will be higher. A lease doesn’t come with all the finance charges that a loan does.
Value for Money
Even if you can afford to buy a car without taking out a loan, why sink your savings into something that’ll spend much of its life in a car park?
There is no guarantee that you will save on your bottom line if you buy a vehicle for your business. What is guaranteed is that you will have to make a hefty upfront investment.
Leasing means you get a new, reliable vehicle at a fixed monthly fee, for a set period of time. If you lease a vehicle, its full value won’t sit on your balance sheet.
You’ll only pay for what you use. As you know exactly what you’ll be paying each month, leasing a business vehicle is a great way to control your costs.
By leasing a business vehicle, you will make sure that your working capital isn’t tied to a depreciating asset.
Tailor-made Solutions
Leasing gives you control, scalability, and flexibility whether you simply need the predictability of a fixed monthly fee or you’re growing your business and need more vehicles. In uncertain times, these are invaluable assets.
You can lease just about anything, from motorbikes to large commercial vans, so you won’t have a hard time finding a vehicle that perfectly suits your needs.
There is a myth that leases are not flexible. This is not true—at least not with us. You can negotiate a lease contract that suits your needs and your budget. You can choose the terms and then focus on what’s next for your business.
No Nasty Surprises
It’s possible to get a lease that covers maintenance. For example, if you need to replace a tyre on one of your vehicles, the cost will be covered by your lease.
By discussing the total cost of ownership from the get-go, vehicle leasing eliminates nasty financial surprises.
Many people don’t take into account the total cost of ownership when using capital expenditures to buy company vehicles. Moreover, they often don’t consider how long they will keep a vehicle.
There’s no way of knowing how much a vehicle will cost you if you don’t know for how long you’re going to keep it. Lured by upfront discounts, people forget to ask how much do replacement tyres cost, how much is maintenance, etc. Moreover, there are always some unexpected costs. All of these can amount to quite a lot of money.
Because it’s a fixed cost, leasing allows you to budget how much your new company car will cost you over a certain period of time.
Less Stress
As mentioned, you can choose a leasing contract that covers service and maintenance. If you get a package that includes roadside assistance, repairs, tyre replacements, and the annual NCT check-up, you will have peace of mind.
Leasing keeps your company moving by taking away all the hassle and administration tasks related to your business vehicles.
The administration can be a headache if you are dealing with multiple vehicles, especially commercial ones. Even something that sounds simple, such as road tax, can be quite labour intensive. You can see for yourself.
Instead of simply leasing vehicles, many CEOs and entrepreneurs spend too much time worrying about vehicle maintenance. Leasing frees up your time and lets you focus on your core business.
Since your lessor will deal with the buying, maintenance, and selling of your business vehicles, leasing is undoubtedly less stressful than buying.
Getting a Better Vehicle
Leasing is one of the simplest and most efficient ways to make sure that your business is only using the best vehicles. Leasing allows a business or an individual to get a vehicle that they otherwise may not be able to afford. You can choose from a wide variety of the latest makes and models.
Leasing allows you to benefit from the durability, reliability, and fuel economy of driving a new vehicle. This will make your vehicle less exposed to performance and maintenance issues as it ages.
New vehicles are equipped with the best technology and innovations. Because of this, leasing is usually a greener choice. It’s also a great way to improve your staff’s safety.
Moreover, a new vehicle is always good for your reputation. Your new company car can help you increase business.
Not Having to Deal With Dealerships
You won’t be held captive to dealership finance if you go with a lessor who constantly reviews the market for the best rates.
If you want to work out where you can get the best price on your own, you have to trawl around many car dealerships. And you still may end up feeling like they all want to rip you off.
As independent vehicle brokers, leasing businesses know how to get the best deals from all the major dealerships and finance companies. This is part of the reason why they are able to offer the most competitive market rates available.