Making the choice between leasing a car and buying one can be difficult, especially when you are hoping to finance it through your small business. Leasing is nearly always the best option but for many, this is difficult to justify, given that they won’t own anything tangible at the end of the period. Leasing gives you so much more freedom than purchasing a vehicle, however, and it is also better for your accounts. Take a look at our guide to leasing a car for a small business and see if we can convince you.
What Are the Benefits of Business Leasing?
The main benefit of business leasing is that you won’t have cash tied up in an asset that just depreciates in value. You will be able to enjoy a new car, with lower monthly payments that can show your business off in a positive light. Clients love nothing more than seeing business owners arrive in a new car, it tells them that things are going right with your business. There are so many other advantages to business leasing too, you can read all about those online.
Closed-End Leasing vs Open-End Leasing
A closed-end lease allows you to give the car back at the end of the lease periods with no further financial commitments. There might well be charges to pay for wear and tear or if you have gone over the annual mileage cap but other than that, you can walk away without paying more. An open-ended lease, however, requires you to pay a residual fee once the lease is over. It’s about ensuring that the lease payments cover the value that will have been lost while you have been driving the car. Open-ended lease payments can often be cheaper on a monthly basis, however. Why not have a read through our post on cash flow question solutions and see if you can come to an answer as to which option might be better for you?
What Is the Business Leasing Process?
There are car leasing companies out there ready and willing to guide you through the process. they can help you decide which vehicle is right for you from their fleet of cars and also help you find the perfect plan for financing your agreement. Remember that car leasing helps cash flow, so financing leasing is often very easy to do.
Who is responsible for insuring the leased vehicle?
You are always responsible for insuring any leased vehicle. Remember that, you will need to cover the cost for any damage to a vehicle should the worst happen. To be on the safe side, therefore, you should ensure that you have fully comprehensive insurance. You should perhaps consider gap insurance too, this covers any difference between what is owed on a car and what the insurer will pay out. It could be a lifesaver if you end up in a situation where the car is stolen or written off.
How long is the lease period?
Typical lease periods last for three years. It is always possible to negotiate different periods for lease agreements, however, if you fancy a newer car more often or wish to keep a car that you already have.