Benefits of leasing a car for companies
Leasing a car for your business is a sensible decision. If yours is a small business or start-up, leasing a car would be helpful due to the lower cost, easy availability, and other benefits. This article briefly discusses the benefits of leasing a car for your business.
monthly payments
In the event that you buy a car, new or used, you must pay cash upfront in whole or in part. On the other hand, in the lease you have to pay only a part of the residual value. This leads to a lower monthly payment.
Also, the total cost of leasing a car is lower than buying it because the lease term is short (usually three years). The cost of the lease is the current value of the car minus its value when you return it. You must pay the interest charged and the charges for the services. If the value of the car when you return it is more than you expected, you should pay less.
It’s a better value for your money, since you can pay for the car at a lower price with a flexible payment plan.
Tax deduction
The taxes you pay are reduced because you only have to pay for the value of the car you use. Additionally, the amount of interest is spread over several months, resulting in a lower monthly amount due.
Plus, since you’ll get the benefit of a tax deduction for leasing a car, it helps save a few hundred dollars.
less maintenance
You get the rented car with a full manufacturer’s warranty. This ensures effective corrective maintenance when necessary. Also, since you are leasing the car for a short period of time, you are likely to have fewer maintenance issues.
Guaranteed Asset Protection (GAP) Insurance
When you lease a car, you get the benefit of GAP insurance. GAP insurance is part of the lease. GAP insurance covers the remaining portion of the car’s value that you must pay for in the event it is stolen or totally damaged in a vehicle collision. This value is much less than purchased new/used vehicles. For a small business like yours, it’s important to take note of this.
Purchase option
You rent the car for your business and use it for as long as you want. At the end of the lease period, you must turn the car over to the dealer. You now have the option of buying the car, a new one, or renting another. You don’t need to worry about reselling the car.
As a small business owner, your business is prone to business fluctuations for a number of reasons. Given the circumstances, every dollar you spend is significant. Therefore, when it comes to operating a car for your business, leasing may be an optimal option.