Many small businesses rely on vehicles. It is unreasonable to expect a sales person to provide their own car, especially if they are expected to do a high mileage. You might also need to provide a small van for deliveries and mobile services. Buying company vehicles is one option, but for a lot of small businesses, leasing deals are more cost effective.
Improved Cash Flow
New businesses don’t always have much in the way of cash flow. They probably won’t have enough capital to buy one or two new or nearly new vehicles. In addition, buying a vehicle pushes that acquisition into the balance sheet, where is it listed as an asset, which is not necessarily a good thing.
When the business leases a vehicle, they don’t need to pay a significant sum of money upfront. Instead, car leasing payments are a set monthly fee. This is classed as an expense in the business’s accounts, which is tax deductible. You also don’t need to account for depreciation on an expensive asset.
Talk to your accountant about the tax implications of company cars, as the rules are complex.
Drive Prestige Vehicles
Most cars don’t stay looking nice and shiny for more than a couple of years. New models are introduced all the time, so this year’s hot hatch is next year’s past-it model. If your business image is all-important and you need a car that will impress clients, leasing a vehicle makes sense.
If you want to find a good deal on a car lease, then take a look at Vantage Leasing’s options. They offer a huge range of leasing deals, including prestige cars like Jaguars and BMWs. For a low monthly payment, you can drive a new Range Rover with all the extras. It’s a great deal for an entrepreneur hoping to secure some big clients.
Many car leasing deals offer very low monthly payments. Maintenance costs and road tax are included in the deal, so that’s one less thing to worry about. You may have to pay a fixed fee for excess mileage, though, so do factor this in when doing the maths.
Leasing lets you drive a brand-new, greener vehicle. Instead of buying an older gas guzzler because that’s all the business can afford, lease a new hybrid vehicle with lower running costs. It is a win-win for the environment and your cash flow.
In addition, buying a car means you are at risk of losing a ton of money if the vehicle is involved in an accident not long after purchase. New cars depreciate significantly when they leave the forecourt, some more than others. If the vehicle is written off in accident, the insurance company will pay the book value, which is usually much less than the original purchase cost.
When you lease a car, GAP insurance is usually included in the package, so if the car is stolen or badly damaged, your business won’t take a huge financial hit. Leasing is usually a better deal for businesses but do a cash flow analysis to make sure and talk to your accountant for more specific advice.