Review of Car Leasing Advantages for Businesses

Is business car leasing a good financial move for businesses? Car finance experts say there are many advantages to leasing vehicles for your business instead of having them as assets on balance sheet. While many leases are done as Online bad credit uk car finance or bad credit logbook loans, this is not usually the reason businesses benefit from business car leasing.

Business car leasing is advantageous for several reasons. According to Mark Werner, a car dealer in Birmingham, “We lease cars and vans and trucks to many businesses. They appreciate the fact that they are not tying up their money in down payments and depreciating cars. They also appreciate the tax breaks they can get through lease programs”.

 
Werner was interviewed in an automobile industry trade journal. Along with his comments were comments from business owners. Jay Soloman, an importer in Wales, stated “We held off on leasing for years because we thought there had to be some catch. When the process was finally explained to us it made sense. We are a small family business and need to cut corners and save money whenever possible. We try to work with as little overhead as possible so not having to pay huge upfront costs or worry about the vehicle depreciating meets our needs. We currently have 2 trucks and 1 van leased from a local car dealership in Wales. We pay our monthly payment and at the end of the lease we turn the vehicle in and lease another one”.

For Soloman, and many others like him, not having to pay interest on tied up capital is a huge advantage. The tax breaks are also attractive to business owners. VAT registered businesses get great tax breaks with a leased vehicle. The are allowed to list 50 percent of the VAT back on a car lease and 100 percent on a van lease.
The Inland Revenue has allowed these tax breaks to be created in order to help the small business owner. If they do not have a need to show assets on balance they can lease a car, van, or truck and reap the tax breaks that come with the leasing program. Some business owners with bad credit history should consider Online no credit check loans as they would be rejected by many traditional van leasing companies. Visit your local expert for all the information and car leasing tips that you need.

                       
Once the leasing period is up the small business owner has 2 options. He may turn the vehicle in and lease a new vehicle or make a large balloon payment and own the vehicle outright. For Soloman the first option is the best. “We just don’t need to have a number of vehicles sitting around and depreciating on our dime. With a personal vehicle I might consider a different route but with the ones for the business I think leasing and turning the van back in at the end is perfect. We usually set up a lease plan for 3 years. After about that length of time cars tend to go bad, I mean they experience lots of mechanical problems. Most likely the lease is no longer good and you pay out of pocket for repairs. If we lease for 3 years, turn the van in, and lease again we save on expensive repairs”.