Are There Benefits to Leasing a Vehicle for Business Use?
The idea of a car lease is nothing new, but many people view it as more of a convenience rather than a sound business move. In fact, business owners often find that leasing vehicles for the company provides quite a few benefits. Here are some examples to keep in mind when faced with buying versus leasing a company car.
The Matter of Taxes
There can be specific tax advantages associated with leasing a care for business purposes. The number of deductions associated with the lease will depend on how the car is used and what sort of upkeep and repair is bundled with the lease agreement. An accountant can take a look at what is covered in the lease and identify exactly how current tax laws would allow the business owner to deduct more of the expenses associated with the arrangement.
General Maintenance and Upkeep
It is possible to lock in a leasing arrangement that provides basic maintenance and upkeep. The expense associated with the maintenance is usually included in the monthly leasing fee. When the time comes for the oil to be changed or the tires to be rotated, there is no out-of-pocket expense. Some plans also cover repairs due to breakdowns, provided the vehicle is not subjected to what is commonly considered unusual wear and tear.
When a vehicle is leased, the client knows exactly when the agreement will come to an end. At that point, there is the option of entering into a new agreement and keeping the vehicle for another term. Should the client wish to go with a newer model, it’s easy enough to turn in the aging company car and select a new one. Many business owners find this approach is more practical than going through the process of purchasing a new vehicle.
The only way to know if leasing is a good fit for the company is to talk with an expert. Ask questions about the terms and provisions found in the lease, how much must be paid up front, and what type of monthly payment schedule can be arranged. After leasing for a single term, there is a good chance the business owner will never buy another company car again.