We look at the benefits of car leasing for businesses – from just a single car to a whole fleet – which allow you to run a new car for low initial outlay.
A lot of businesses benefit from leasing their vehicles. It cuts their costs, they can plan their budget and the biggest bonus is they usually end up with a lot more car for their money. When you start a lease contract you can pay as little or as much as you can afford upfront, making it much easier for the cash-flow of business especially compared buying the car outright. Driving around in a lovely new car can say a lot about a business, and if you had the choice to be driving around in a brand new car with the latest technology, against a 5 year old car, you’re going to pick the new car if you can.
Car leasing – you know exactly what your costs are
The biggest benefit of car leasing for a business all comes down to the cost. When you lease a car a typical contract will be between 2 and 4 years long, though certain manufactures do provide 1 year deals, Citroen for one. For the duration of the contract you will know precisely how much that car is going to cost you minus the variation in fuel cost during the contract, especially if you take out a maintenance contract with the lease agreement which includes all servicing, tyres etc. This works really well for all businesses as you can keep costs at a planned affordable level. In addition to this 50% of the VAT which the lease agreement is subject to can be reclaimed, as well as 100% of the VAT on maintenance contracts making it even cheaper.
If it depreciates – lease it
The best part of car leasing in general is that you don’t end up investing your money into an asset which depreciates far more than the outlay. This is another big benefit to businesses as it’s not ideal to be investing large amounts of money in anything that’s going to be worth a lot less within a couple of years. This is because when leasing a car you only pay to rent the car long term not own it forever, so the rentals, i.e. the monthly payments, are worked out against a fraction of the total value of the car.
Business leasing is cheaper than personal leasing
More often than not you get a much better deal on a business lease contract as opposed to a personal contract. A lot of the bigger German brands such as Audi, Mercedes-Benz or BMW will charge more than just the usual 20% VAT on-top for their personal contracts. Simply because they want businesses to lease their cars more than personal users, this means there are some astounding deals out there for businesses. Another benefit to be aware of is you will regularly see cars labelled as a special offer online, these are deals that the manufacturers have put additional financial support against, simply to get more sold and reach their own quarterly targets.
Being aware of this and generally keeping your eye out for the car you want to get some additional support against means you can get an absolute steal of a deal, especially near the end of a quarter. On-top of all of this you get to have the latest cars every 2-4 years with all the latest technology, and with the rate that’s changing at the moment you could well have a car that drives you to work itself in 4-5 years time.