When you are launching a new business, the last thing you want to think about is funding your car. However, a car lease could be the perfect solution if you need to visit clients and suppliers or attend meetings regularly. New vehicles are expensive and can be a financial burden on small businesses. However, with a car lease, you can get behind the wheel of a new car without worrying about the initial costs or depreciation. Many businesses considering car leasing often wonder why it is so much cheaper than taking out a personal lease. We have written this article to answer that. If you are looking to start your own business or you are an established entrepreneur trying to find out how to lease a car for your company, institution, or organization, then read on.
1. Businesses can claim back taxes.
One of the main reasons why business leasing is cheaper than personal leasing is that businesses can claim back taxes. When you take out a personal lease, the full amount of the monthly payments are classed as an expense and is therefore subject to tax. However, business leasing permits you to write off the financing fees and depreciation that are included in each monthly payment.
2. Businesses can benefit from fleet discounts.
As an individual, you will probably need to lease one car at a time. This means that you will be up against other individuals when negotiating the best deal. However, businesses can lease multiple cars at any one time, which gives them more bargaining power when negotiating with suppliers. This means that businesses can get better deals on their car leases, resulting in lower monthly payments.
3. Businesses get better interest rates
When you lease a car, the interest rate you’re offered will be based on a number of factors, including your credit score, the length of the lease, and the type of car you’re leasing. However, businesses generally get better interest rates than individuals because they are considered lower risk. This is because businesses can usually offer a larger down payment, and they have a regular income, which makes it more likely that they will be able to keep up with the monthly payments.
4. You can get a higher mileage allowance with a business lease
If you’re planning to use your car for business purposes, you’re likely to clock up many miles. This is something that’s taken into account when you lease a car for business use, and you can usually get a higher mileage allowance than you would with a personal lease. This means you’re less likely to incur excess mileage charges at the end of your contract, which can save you money. You should note that if you use a leased business car for personal use, you will be required to deduct the accrued mileage from your total entitlement, and you will be liable for any excess mileage charges at the end of your contract.
5.No maintenance or repair expenses
Another benefit of business leasing is that you don’t have to worry about maintenance or repair expenses. This is because these costs are usually included in the monthly payments so that you can budget for them in advance. With a personal lease, you may be responsible for paying for any repairs or maintenance yourself, which can be expensive if something goes wrong.
How to find the right business car lease?
As you have seen, there are many reasons why business leasing is cheaper than personal leasing. However, finding the right lease for your business needs is important if you want the process to be as hustle-free as possible. Here are a few things to consider:
The length of the lease: The length of the lease will affect the monthly payments, so you need to think about how long you need the car. If you only need it for a short period, then a shorter lease may be more suitable. However, if you need it for a longer time, then a longer lease may be better so that you can spread the cost over a longer period.
The type of car: Cars come at different lease price points, so you need to consider what you can afford. If you only have a limited budget, you may need to consider a smaller or less luxurious car. However, you could lease a more expensive car if you have a larger budget.
The mileage allowance: The mileage allowance will affect the monthly payments, so you need to think about how many miles you’re likely to clock up. The standard annual allotment is 12,000 miles, but if you think you’ll need more, you should look for a lease with a higher mileage allowance.
In conclusion, business leasing offers amazing benefits and can save your business a lot of money. If you’re thinking about leasing a car for your business, make sure to keep these factors in mind so that you can find the right lease for your needs.