Table Of Contents
Should You Lease A Company Car?
Last Updated on: November 7th, 2024
Many business owners find it difficult to choose between buying and leasing a company car.
In some instances, buying new company cars might require business owners to collect loans. This might not be profitable for them in the long run, especially if the car develops a problem.
The other option company owners have apart from buying is leasing. Leasing a company car comes with its advantages. Leasing a company car can cut down the overall costs to a certain extent.
Six Best Benefits Of Lease A Company Car:
Here are some of the advantages leasing a company car has over buying one.
1. Tax Benefits
Tax benefits are one of the reasons why leasing company cars are profitable. Tax deductions are essential to business owners. Individuals can qualify for tax benefits when they lease a company car and can prove the vehicle functions during 50% of the work-related time.
The tax benefits provided by the government help business owners save money in the long run. As long as the leased vehicle is used frequently for a specified time, you are eligible for these benefits, and the money saved can be used on other aspects of the business.
Related Resource: 7 Important Tax Tips for Small Businesses
2. Easy To Upgrade
Change is constant in the business field. Trends change and different brands compete with each other to achieve supremacy. The same goes for company cars. Over time, car models get outdated and require change. When this occurs, owners will find it easier to change leased vehicles.
If the company car were bought, the owner would find it more difficult to upgrade. Upgrading a leased vehicle is cheaper than upgrading an owned vehicle. Automobile companies like Auto Trader lease cars to businesses, and you can even form a collaboration with them.
3. Cheaper
Another advantage of leased company cars is their cost. The cost of purchasing a company car is far higher than the cost of leasing. Many startup businesses may not have enough capital to purchase company cars and may resort to car loans.
However, leasing solves this problem as business owners don?t need to spend too much money buying company cars. They can select the leasing option that is most suitable for them. This helps startup businesses save cash that can be used for other profitable parts of the business.
4. Brief Procedure
Paperwork and processing can take a long amount of time, especially when dealing with things like car loans. Getting a vehicle loan from the bank can be a stressful process. Not only do you have to fill out a lot of forms, but you also have to wait long hours before the loan is processed and approved.
However, the procedure for leasing a car is way less complicated than that. All you need to do is select a vehicle and fill out the necessary papers. Within a maximum of 24 hrs, you can get access to your leased car. This is way shorter compared to buying a company car.
5. Easy Replacement
Another great advantage of leasing a company car is replacing it easily. Leased cars can easily be returned to the rental service they were gotten from. Purchased vehicles, on the other hand, are much harder to sell, and you might not get the appropriate value for the car.
Leasing a company car gives you the option of returning the vehicle to the rental service to dispose of or picking another one. Some rental services provide the option of buying the car at the end of the lease period. Therefore, you can decide whether to purchase the car or upgrade your lease. For example, you can easily change from a gas-combustion vehicle to a KIA EV6.
6. Warranty
Most car rental services provide warranties for leased cars. This is a bonus that might be helpful later. Vehicle leases usually have about three years, and the leased car usually has a warranty around that range. The warranty can be very helpful if the situation ever calls for it.
Deciding whether to lease a company car is dependent on many factors. If you only need the company car for a short duration or do not want to spend much money, then a lease is your best answer. However, if you want a long-term company vehicle, it is better to purchase one directly.
The rate of usage and maintenance costs also need to be considered before deciding to lease a company car. If the company car does not cover a lot of mileage, it is advisable to opt for a lease. Leased cars are also easily replaceable, and it is easier to change models to newer and better ones.
Read Also:
