A decision faced by many small but successful businesses is whether they ought to buy or lease company vehicles. Many people immediately seize on the former as the superior option, solely on the basis of the material ownership it entails. However, leasing a vehicle for business purposes is also becoming an increasingly common practice in the UK, and thanks to the many associated benefits it’s no wonder.
Read on to find out more.
Initially, many people are put off by the idea of paying money for something that they’ll never own. However, they forget that this has one major benefit: you’re not buying something that will be worth less than you’ve paid by the time you own it. Cars lose value rapidly, and buying means that by the time you pay off the total amount, you’ve already made a loss.
Lower Monthly Payments
Thanks to the lack of ownership, you’ll also be paying less per month for the car you’re driving around than you would if you had bought it – around 55 per cent less, on average. This not only leaves you with more capital to invest in your business, but also means that you’ll be able to afford cars that would normally be outside of your budget. As your customers don’t know whether you’re buying or leasing the vehicle, this makes your company seem more affluent than it perhaps is, enhancing your image.
The deposit you pay will also be smaller.
As we touched on above, the better the vehicles you and your employees are driving, the better the image your business creates. Successful businesses are affluent businesses, and this is how you want to appear.
As well as being able to afford better cars that will help to convey this image, you and your staff will also be driving new vehicles. As most leases only last for two to three years, you can simply replace them at the end of this period so that the motors you’re driving are always new and shiny. If you want to impress your clients, this is a great way to do it.
Not only will newer vehicles enhance your prestige, but they’re also likely to provide better fuel economy and enhanced performance than their older counterparts.
Monthly lease payments can often be deducted in full or in part from income tax. This means that you’re essentially covering the depreciation in value of the car, which will be worth less by the end of the period than you’re paying, with a little extra on top. You can find out more here.
A further benefit is that many hire companies will also include road tax in your agreement.
As your lease period is likely to be relatively short, the chances are that vehicles will be under warranty for the duration of the hire period, which will help to save you money on maintenance and repair costs. Many leasing companies will also offer a replacement vehicle if yours is taken out of action.
Could business car hire be an option for your enterprise?